New Deduction For Mortgage Insurance

Home owners will benefit from a new tax deduction for private and government mortgage insurance premiums. Mortgage insurance is charged to borrowers with less than a 20 percent down payment on their home mortgage and are typically one-half of 1 percent of the mortgage amount.

Over the past few years, piggyback loans or second mortgages have become popular to avoid paying mortgage insurance. But with the new tax deduction, borrowers may want to crunch some numbers, taking a second look at this option.

Starting in 2007, mortgage insurance premiums will be handled the same as your interest deduction on your mortgage. Full story...