Update on the Mortgage Insurance Deduction

Earlier I mentioned that there is now an itemized deduction for Mortgage Insurance premiums paid on mortgages financed during 2007. Since writing that paragraph, Congress has extended the mortgage insurance deduction for two more years, through 2009.

If you are a first time home buyer, or a home buyer with little or no down payment, you may now have a choice of either paying for mortgage insurance on one loan, or taking out two mortgage loans, one for the downpayment. Both the interest expense AND the mortgage insurance are deductible now, but only for new mortgages entered into in 2007, 2008 and 2009 at this time.