Mortgage Insurance Premium Deductions

Every lender should have mortgage insurance against the non-repayment of mortgages. The need for lender protection will grow as our economy weakens. The insurance provides the needed adequate protection for lender operations. Mortgage insurance is `tax deductible.`

Many qualify for a tax deductible premium on a FHA or HUD mortgage. If you had an insured mortgage you may be eligible for a refund from HUD/FHA. Mortgage insurance premiums are also tax deductible. You may qualify for upfront mortgage insurance premium refunds.

FHA mortgage insurance premiums are tax deductible if you fall within the State and Federal income requirements. For most States if your income is below $100,000 you can get an upfront mortgage insurance premium refund. The amounts of FHA mortgage insurance premiums you may deduct is limited depending on your adjusted gross income. If you paid a lump-sum premium in 2008 you can divide your total premium by the number of months of your mortgage for use in deductions years after.

If a mortgage company submits a claim to HUD for insurance benefits then no refund would benefit the homeowner. HUD will not be liable for distributive shares that remain unclaimed for 6 years. Timely claims must be submitted to ensure due refunds are given. If loans are terminated the FHA Commissioner determines how much of the up-front premium is to refunded.