Write – Offs to Remember!
Deductions in the Loan Process!

Write-Offs! They’re the government’s way of rewarding you when you’ve done something they like! And, to judge by the write-offs, the government likes it when you borrow money to buy a house!

There are write-offs aplenty, many of which people often forget.

Make the most of it! Take every break the IRS says you’ve got coming. Here are a few deductions that people often forget:

Loan Fees (aka Points). If you are paying points, there is good news! They’re deductible! They are a total write-off. Whether you are buying a new home or refinancing the one you already own, or just borrowing to do some home improvement, you can take your “points” right off the top. Score one for the borrower!

Pre-Payment Penalties: Just when you were doing so well, and have managed to pay that loan off early, they slap you. Remember you may have a pre-payment penalty on your mortgage. Ouch! Well, if it’s any consolation, you can itemize that away! That will ease your pain.

Pro-Rated Real Estate Taxes: Even if the seller was the one who sent the municipality the check, chances are you paid a pro-rated portion of the taxes for the year at closing. Be sure to take the deduction for your fair share!

Pre-Paid Interest (Pro-Rated Mortgage Interest): Depending on when in the month you closed on your home, you paid either a significant or very small amount of Pre-Rated or Pre-Paid Interest for that month. Big or small, it is tax-deductible! The final closing statement (HUD Statement) will show you that exact amount, listed under the line item “Pre-Paid” Interest. Additionally, the lender will send you a form at year-end, showing your total interest-paid deduction for the year.

Home Construction Loan Interest:  As long as the construction period does not last more than 2 (two) years before you make the new place your principle residence, you can write-off the interest for that construction loan. And really, if it takes more than 2 years, you most likely got bigger problems!

Mortgage Insurance (PMI) Tax Deductible in 2007

Mortgage Insurance, also known as PMI, will be fully tax-deductible in 2007.

The 109 th Congress, passed the new tax law in it’s final hours in December 2006.

“This is really going to help a million Americans who will buy a home next year using Mortgage Insurance,” says Kevin Schneider, President of U.S. mortgage insurance business for Genworth Financial.

Bottom line for high “Loan To Value” borrowers; now, in addition to traditional :piggy Back” first and seconds to secure that high “Loan to Value” purchase, there will also be the opportunity to use a single loan, with Mortgage Insurance as an alternative.

I will be glad to review all your potential alternatives and recommend the right product option for you!

It pays to pay attention! All these write-offs can add up to some serious savings at tax time!