US Congress Says Homeowners Can Keep Mortgage Interest Deduction

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Broadview Mortgage Corporation, a California based mortgage bank, dissects how The American Taxpayer Relief Act will affect current and future homeowners. The bill, which includes provisions for extending certain mortgage related tax benefits, was released for circulation by the U.S. Government Printing Office.

Mortgage Insurance Tax Deduction Reinstated

Mortgage Insurance Tax Deduction Reinstated

This is a pleasant, and unexpected surprise for home buyers and home owners alike says Scott Schang, Branch Manager of Broadview Mortgage Katella Branch, Orange California.

According to Bloomberg BNA, a news reporting agency, in an 11th hour move to avoid sending the United States economy over a “fiscal cliff”, House Resolution 8 was passed by the United States Senate.

The Government Printing Office, which releases and circulates official government publications, states on page one of the bill that its purpose is to, "extend certain tax relief provisions enacted in 2001 and 2003, and to provide for expedited consideration of a bill providing for comprehensive tax reform, and for other purposes."

Buried in the list of extensions is Section 204, which specifically addresses the ability of current residential property owners to write off their mortgage insurance. This provision had previously expired on January 1st, 2011 and has been retroactively revived.

Chris Apodaca, a licensed mortgage banker, states that, "This provision of H.R. 8 is getting almost no news coverage due to the enormity of tax extensions and other issues it is trying to address. Given the size of the bill and the swiftness in which it was passed, I wouldn't be surprised if some of our elected officials on the Hill didn't know about Section 204."

The mortgage insurance premium deduction dates to legislation enacted in 2006 which allowed a residential homeowner to write off their mortgage insurance.

According to H.R. 8, borrowers can potentially write off 100% of their annual mortgage insurance premiums. Married homeowners filing singly can write off 50% of premium. Borrowers with incomes above $100,000 may qualify for partial deductions on a sliding scale.

When asked about how H.R. 8 would affect those looking to purchase a home in 2013, Apodaca replied, "As mortgage insurance rates continue to increase and rates begin to follow suit, it is important for homeowners to be aware of any deductions available. The ability to write off mortgage insurance is going to be a huge relief for many families as they see their taxes increase in other areas."

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