This from Wendy Paulus, Cherry Creek Mortgage, one of our great lenders in Summit County. In the past year, our buyers have done loans with her for properties in Breckenridge, Dillon, Silverthorne, Keystone and Frisco. --------------------------- Congress has passed a bill making mortgage insurance premiums deductible for homeowners. The homeowners must have an AGI (Adjusted Gross Income) of $100,000 or less to be able to fully deduct the premiums each year. Owners with income over $110,000 will have no deduction. Those with income from $100,000 - $110,000 will be phased out of the deduction according to the income above $100,000. This is for NEW loans only and does not include existing loans. Mortgage insurance providers have been lobbying for this reform for many years. The argument by them has always been that simply shifting part of the loan to a second mortgage is not equitable. Mortgage insurance, like mortgage interest, should be deductible. And now the legislative powers have concurred.
In the past, we as lenders have often chosen to do a second mortgage which was often in the best interests of the client. Freguently the payment of a first mortgage with mortgage insurance and a split first/second combination was very close. But given the tax benefit of deductible interest, the split mortgages usually proved to be more beneficial financially, even when there were some closing costs for the second mortgage. Now there will most likely prove to be a better benefit to the homeowner by utilizing mortgage insurance. AND mortgage insurance can be removed with appreciation, improving a payment in 2-3 years without a refinance. | 
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