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Mortgage insurance (MI) has always been an easy, safe and affordable way for your Members to purchase a home with less than a 20% down payment. Now MI premiums are tax-deductible through 2010, thanks to a new law that has extended the original 1-year deduction for three years.
All purchase and refinancing (up to the original loan amount) transactions with MI closed between now and 2010 are eligible for the tax deduction.*
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Members with adjusted gross incomes of $100,000 or less may deduct 100% of their 2007-2010 MI premiums** |
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Deductions are phased out at 10% increments for each $1,000 a homeowner’s adjusted gross income exceeds $100,000, with a cutoff of any deduction at $109,000** |
*Congress has the option to renew the deduction or make it permanent.
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According to Brian Shepherd, Senior Vice President and General Manager of CMG MI, “By extending the tax deduction, the government has made it possible for more low- and moderate-income Members to qualify for homeownership.” |
Members who find it difficult to accumulate the usual 20% down payment may find that MI is often the best way for them to finance their home purchase. Now that MI is tax-deductible, it’s an option that sweetens the homebuying process for everyone concerned.
Get the Latest Scoop on Tax-Deductible MI!
Let Your Members know that Tax-Deductible MI is:
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Simple: With MI, there’s just one loan, one set of approvals, one closing. Piggybacks are more complicated and may require more time and extra fees. |
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Safe: Members can cancel their MI when their equity reaches a certain percentage of the original purchase price†. A piggyback’s first and second loans have to be paid off |
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Secure: Unlike adjustable-rate or interest-only loans, a home loan with MI is not exposed to variable interest rates. Your members won’t experience any “payment shock” with a fixed-rate loan insured with MI. |
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And it’s a Sweet Deal too – because it’s tax-deductible through 2010! For qualified Members who can deduct all or part of their MI from their federal income taxes, MI is a competitive alternative to piggybacks and more exotic types of loans. |
| †Under certain circumstances and according to the Homeowners Protection Act of 1999. |
Click here to watch a video on the value of Tax-Deductible MI (available through Mortgage Insurance Companies of America).
Tax-Deductible MI – A Treat for Credit Unions, Too
Now you have a smart alternative to offer Members who want to buy a home but only have a small down payment. MI protects your credit union, so you can grow your real estate lending business and reach out to many underserved groups, including:
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Low- and moderate-income Members |
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First-time homebuyers |
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Immigrants |
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Rural residents |
Help your Members get a Sweet Deal -- Tax-Deductible MI on their mortgage loans!
Questions? Read our Tax-Deductible MI FAQ.
Keep checking back!
We'll be updating this page as more information becomes available. |
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**Based on transactions closed in 2007-2010, and Member-paid MI premiums allocable to those years.
CMG MI cannot provide tax advice. Taxpayers should consult their own tax advisors concerning the applicability of this new deduction to their particular circumstances under the Internal Revenue Code and the laws of any other taxing jurisdiction. This information was not intended or written to be used, and it cannot be used, for the purpose of avoiding U.S. federal, state or local tax penalties. | |