Save Money by Deducting Your PMI
Borrowers who are closing loans in 2008 and who have annual combined household incomes of $100,000 or less now qualify to deduct the full cost of their mortgage insurance premiums on their federal tax return, according to a press release from the U.S. government. This legislation was passed by Congress and signed by President Bush in late 2006.
For homebuyers, this law helps to increase their buying power, simplify the mortgage process, create easier refinancing opportunities and broaden their cash-flow options.
"Making the cost of mortgage insurance tax-deductible helps those who need it most: low- and moderate-income Americans, primarily first-time homebuyers, who are financially responsible, but simply don't have the means to amass a 20% down payment," said Steve Smith, President of Mortgage Insurance Companies of America.
Experts say that a mortgage insurance deduction will serve as an option to taking on a "piggyback" loan to cover a 20% down payment. The new law is expected to save nearly 1 million Americans a total of $91 million when they file their tax returns in 2008.
As this article goes to press, the law has one hurdle to cross: The IRS still has to issue regulations that interpret the law. Therefore, it is highly recommended that you always advise your clients to talk to a tax professional before filing their taxes.
Harry Teaford
Branch Manager, Florida Keys
91760 Overseas Highway
Tavernier, FL 33070
305-587-1244
Fax: 866-2749344
hteaford@ftloan.net
Mission Statement:
To provide comprehensive mortgage solutions to my customers with a high degree of trust, knowledge, respect and convenience.
Referral Request:
Do you know anyone with a real estate lending need?
Know and Boost Your FICO Score
A critical factor for all mortgage applicants is their FICO score. To know your score — a Fair Isaac Co. calculation from 350 to 850 — go to myFICO.com or any of the main three credit reporting agencies: Equifax (www.equifax.com), Experian (www.experian.com) or TransUnion (www.transunion.com). Scores are computed from your personal credit report maintained independently at each of the bureaus, which charge about $15 to provide your credit report and score. Rather than averaging the three scores, lenders typically select the middle one.
To improve your score, here are six action steps to pursue:
1) Continue paying your bills on time — your payment history
accounts for 35% of your FICO score.
2) Don’t add to your balance or reach your credit card maximum
since 30% of your score is based on your debt-to-credit limit.
3) Don’t apply for new credit, (causing a “credit inquiry” that can
lower your score) or cancel an old card, since length of credit
helps your score.
4) Pay down high-balances; don’t shuffle debts among several lenders.
5) Settle any collections or past due accounts.
6) Dispute and resolve any inaccurate items in your credit report
Time may be your only remedy for mitigating the damage from
bankruptcies, foreclosures and other judgments. The last two
years of your credit history are the most important.
To get the house you want, first get your financial house in order — and that includes knowing and improving your FICO score.
Harry Teaford
Branch Manager, Florida Keys
91760 Overseas Highway
Tavernier, FL 33070
305-587-1244
Fax: 866-274-9344
hteaford@ftloan.com
Mission Statement:
To provide comprehensive mortgage solutions to my customers with a high degree of trust, knowledge, respect and convenience.
