REAL TipS: BUYING

Homeownership may be more affordable than you know

Mortgage Insurance Companies of America (MICA) recently released good news for Texas homeowners. A new tax deduction will make homes more affordable next year by allowing homebuyers to write off premiums for private and government mortgage insurance.

Buyers, primarily first-time homebuyers, who cannot afford to amass a 20% downpayment are required to carry mortgage insurance as a means of protecting the loan. In the past, this premium was not tax deductible. Lawmakers have determined that mortgage insurance is simply a cost of financing, just like mortgage interest, and passed legislation that will allow homeowners who carry mortgage insurance to write it off their federal taxes.

Borrowers who purchase homes in 2007 and have an annual income of $100,000 or less will be able to receive a low downpayment mortgage and deduct the full cost of their mortgage insurance premiums from their federal tax return.

Texas Association of Realtors®