When you’re a homeowner, you have many tax deductions available to you – but did you know that you might be able to deduct your PMI? It’s true! It’s just another one of those costs that you have to pay for buying a home, and you in most cases will be able to deduct it from your tax return. While at first glance it might notseem like a lot, over the years this really racks up. When you work with one of our Toronto mortgage brokers, you’ll be able to save big on your PMI, even if you still want to deduct.
What is private mortgage insurance?
PMI, or private mortgage insurance, is a special kind of tax levied against those who have bad credit or don’t have enough for their down payment. This way many buyers can find a home for 5% down, helping them by a home faster and easier than ever before. When you have PMI you’ll have to pay 1% of the home’s value on top of your mortgage every month – if you can’t afford this, it may not be the right time for you to buy home.
Can I Get Out Of Paying Private Mortgage Insurance?
You can get out of paying PMI but only if you pay off 30% of your home or more. Since PMI is there for people who don’t have the full 20% down payment just yet, and since it IS tax-deductible, you may be better off paying it for a couple of years. Your PMI, including interest you paid to your mortgage, are all tax-deductible. Sometimes it’s just preferable to take the hit for a couple of years; you’ll want to check with your mortgage lender to find if you can make an early payment – sometimes you can be penalized, and pay extra fees for paying early.
Maximize Your Tax Benefits
Working with one of our Canada mortgage brokers, we can help you figure out how this tax deduction applies to you. Every situation is unique, and you may not get the full benefit of deducting PMI if you could’ve just paid off the whole down payment. We can’t really see what this means for you without talking to you, so give us a call today and see how we can help!
Let Us Help!
If you’re still searching for a mortgage, let us help! There are ways we can use a smaller “piggyback mortgage” to avoid paying PMI altogether. After all, why pay more than you have to get out of it? If your current mortgage lender isn’t offering you the right amount, we can help you find one that might; mortgage interest rates are at near all-time lows, lenders are fighting for your business – it’s time to take advantage of it. Call us today and see how you can save!
Erin Thompson is a mortgage broker and financial blogger for Home base Mortgages. HBM is a Toronto mortgage broker that provides home mortgages, mortgages for the self-employed, home equity loans and lines of credit, debt consolidation, private mortgage lending and second mortgages. You can their private mortgage page at http://www.homebasemortgages.ca/private-mortgages/
Can You Deduct Your Private Mortgage Insurance from Your Taxes?
