Mortgage Insurance loses tax deduction benefit in 2014

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mortgageporterraiseOver the past few years, home owners have enjoyed deducting private mortgage insurance (pmi) premiums from their income tax. This is also true for government forms of mortgage insurance (aka funding fee or guarantee fee) with FHA, VA and USDA mortgage loans. This benefit is coming to an end effective on 2014 tax returns.

If you are currently paying private mortgage insurance and your neighborhood is enjoying appreciating home values, like we are in the greater Seattle area, this could be a good reason to contact your local licensed mortgage professional to see if it makes sense to refinance.

If you have a conventional mortgage, you can try contacting your mortgage servicer to see if they are willing to remove your pmi from your mortgage payment. They may require an appraisal (contact them before initiating an appraisal to avoid potentially unnecessary cost) and have other requirements. Even if they are willing to remove your pmi, it’s still worth getting a second opinion on how much you could save refinancing with today’s lower mortgage rates.

If you have an FHA mortgage with more expensive mortgage insurance premiums, this may be a good opportunity to see if it can be refinanced to a conventional mortgage.

So if you’re currently paying private mortgage insurance (pmi) or have an FHA or USDA mortgage, and you’ve been deducting the mortgage insurance premiums from your income tax, it may make more sense than ever to look at refinancing.  Click here if I can provide you with a free mortgage rate quote so you can review your options, for your home located anywhere in Washington state (where I’m licensed).

Trackbacks

  1. […] So why refinance out of an  FHA mortgage? A majority of FHA mortgages have monthly mortgage insurance premiums and in most cases, the mortgage insurance (especially if the loan closed within the last couple years) is expensive. FHA mortgage insurance is even more costly since it can no longer be claimed as a tax deduction. […]

  2. […] eliminate private mortgage insurance or FHA mortgage insurance (neither are tax deductible); […]

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