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Crystal Said:

Is FHA Upfront Mortgage Insurance Tax Deductible?

We Answered:

Under code section 163(h)(3)(E), FHA mortgage insurance premiums are deductible. The premium has to have been paid in conjunction with the purchase of your principle residence. It has to be paid on a mortgage issued after December 31, 2006. The deduction only applies for 2007 through 2010. If your adjusted gross income exceeds $100,000 the deductible premium is reduced by 10% of each $1,000 of AGI above the $100,000.

Louise Said:

does fha mortgage insurance cover your mortgage if you cant make a payment?

We Answered:

No, Ryan, not at all.

FHA mortgage insurance is for the lender. Should you default on your mortgage, FHA will cover the lender for the default. But it's not for just a payment or two. The insurance is for the entire mortgage balance.

If you want "mortgage protection" insurance, the borrower must buy that on their own.

Good luck.

Eric Said:

Is FHA mortgage insurance tax deductible?

We Answered:

That is deductible. However you may only deduct the portion that applied to 2007 so you must pro-rate the premium. If it's a 30 year mortgage, divide the total premium by 360 and multiply that by the number of months remaining in the year from the closing date going forward. If the MIP deduction is extended into future years you'll be able to deduct 12/360ths of the premium each year for as long as you hold the mortgage.

Also, you must have closed the loan in 2007 AND it must have been a purchase money mortgage, NOT a re-fi.