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Caveat No. 1
The tax deduction applies only to mortgages that are closed in 2007. If you have a loan with mortgage insurance in 2006, you won’t be able to deduct the premiums in the 2007 tax year unless you refinances in 2007.

Caveat No. 2
There are income limits. You get the full deduction if your adjusted gross income is $100,000 or less. The amount you can deduct phases out rapidly after that and no mortgage insurance deduction is available if you make more than $110,000.

Caveat #3
This is a one-year deal and Congress would have to review the deduction to make it apply for the 2008 tax year and beyond. Congress probably will extend the deduction, but you can’t know for sure.

Caveat #4
If you take the standard deduction instead of itemizing deductions, the new law makes no difference to you. “You need to have a mortgage of about $130,000 or so to even pay enough interest to hurdle the standard deduction,” says Bob Walters, chief economist for Quicken Loans. In practice, he says, this means that the deduction is available to households with income between $50,000 and $100,000.

For more information contact:
Mark Deitsch
Life Tree Lending, LLC
Mount Pleasant, SC 29466
Phone: 843-971-7075
mark@lifetreelending.com
www.lifetreelending.com