If you are looking to buy a house in the near future, then you probably have heard a few times of the PMI term. PMI stands for Private Mortgage Insurance and represents the added cost for the buyers that have less then 20% as a down payment. It is also referred to as Lenders Mortgage Insurance and basically it’s a policy that helps to compensate the lenders or investors should you fail to make the house payments.
In 2007, the mortgage insurance became tax-deductible and depending on your tax bracket, you could make use of it. Economically speaking, the deductible tax can be actually cheaper than a second loan, so it’s definitely worth calculating. Of course, the recommendation is to make sure that you qualify for PMI Deduction first.
This process can become time consuming and complex, however you can find great tools to prepare and file your taxes, like the H&R Block, which operates in a straight-forward manner.
