Weichert Financial Services Advises Home Buyers On New Tax Break For Private Mortgage Insurance

(Friday, February 02, 2007) - For those planning to purchase a
home this year, Weichert Financial Services has good news.
Beginning with mortgage loans originated on January 1, 2007, private
mortgage insurance is now deductible on federal income tax returns. Private
mortgage insurance, or PMI as it is commonly known, generally is required by
lenders whenever the down payment is less than 20 percent.
According to Fred Watkins, president of Weichert Financial Services,
the new tax break will make the dream of homeownership more attainable. He
said, "We believe this new tax deductibility makes loans with private
mortgage insurance more affordable. In some cases, it will enable buyers to
qualify for a larger loan."
As he explained, those buying with little or no money down typically
weigh the financial pros and cons of a single loan carrying a PMI premium
versus a piggyback or combo loan. The latter consists of a first mortgage
plus a second mortgage at a higher interest rate. Now that PMI is
federally tax deductible for qualified buyers, the single loan with PMI is
now as affordable or, in some cases, even lower in overall cost versus most
combo loans. And unlike the fluctuating interest rates typical of second
mortgage loans, premiums are fixed so that buyers can enjoy the convenience
and peace-of-mind of one stable monthly PMI payment.
In addition, while second mortgages must be paid in full, typically
homeowners may request the cancellation of PMI coverage once their home
appreciates to the point that their new combined loan-to-value ratio is 78
percent.
According to the bill passed by Congress late in 2006, PMI premiums
are fully deductible for buyers with adjusted gross incomes of $100,000 or
less. Deductions are phased out at 10-percent increments for those with
adjusted gross incomes between $100,001 and $110,000. The cost of private
mortgage insurance generally averages one-half of one percent of the loan
amount.
Weichert Financial Services ranks in the "Top 100" of U.S. lenders.
An affiliate of Weichert, Realtors®, Weichert Financial Services offers more
than 360 mortgage products. Its mortgage specialists, called Gold Services
Managers, serve every Weichert office and are available for quick mortgage
credit approvals and free mortgage counseling.
Weichert has more than 18,300 sales associates in nearly 490 company-owned
and franchised sales offices in key markets throughout the U.S. A family of
full-service real estate and financial services companies, Weichert helps
customers buy and sell both residential and commercial real estate, and
streamlines the delivery of mortgages and home and title insurance. For
more information, call Weichert's customer service center at 1-800-USA-SOLD
or visit Weichert's Web site, . Each Weichert franchised
office is independently owned and operated.

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