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This is a new tax break for homeowners who bought homes in 2007 and needed private mortgage insurance to make the purchase.
It lets you deduct any mortgage insurance premiums paid during the year.
Lenders often require buyers to buy mortgage insurance if they are unable to put down 20% on their homes. The mortgage insurance policy insures the lender in case your house goes into foreclosure and the property is sold.
Hundreds of thousands of homeowners will save a total of $91 million when they file their tax returns in 2008, according to Bankrate.com.
A homeowner with a $180,000 mortgage would save about $351 in taxes per year because of the law, Bankrate says. That assumes that the borrower has good credit and is in the 25 percent tax bracket.
This break applies to 2007 only, although there is talk in Congress that the break will be extended.
For more on this break, see Publication 936, Home Mortgage Interest Deduction.
Published Dec. 6, 2007
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