Did you know that if you are paying PMI (Private Mortgage Insurance) you can deduct it on your taxes? The Protecting Americans from Tax Hikes Act of 2015 allows homeowners that pay PMI to deduct the premiums as interest on their tax returns for the 2015 and 2016 tax years. If you purchased a home in recent years and your down payment was less than 20% there is a good chance you are paying PMI. If so, make sure to discuss with your tax preparer your PMI premiums and take advantage of this benefit.
If you have a conventional loan and you pay PMI, at some point, after paying down your mortgage balance, you will reach a point where your loan-to-value ratio is 80% or less. This means you’ll have 20% equity in your home and you should no longer be required to pay the PMI. If you think this is true in your case speak to your mortgage company to determine if you qualify for eliminating the PMI. That would put some extra money in your pocket each month!