The premiums are deductible for qualified borrowers who purchase a residence in the 2007 tax year or thereafter.

Particularly for first time home buyers, the twenty percent down payment has been the single largest barrier to home ownership. Borrowers with less than the requisite twenty percent down payment are required to have a special insurance called Private Mortgage Insurance or PMI. Until now, these PMI payments have not been tax deductible.

For homes refinanced or purchased in 2007 or thereafter, borrowers with annual incomes of less than $100,000 may deduct the full amount of the private mortgage insurance. Families with annual incomes of up to $109,000, qualify for a partial deduction. In any case, check with your tax preparer for advice relative to your scenario.

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