Making Your Low Down Payment Work For You

(ARA) – As spring home buying season begins, financing options remain available for borrowers who do not have the traditional 20 percent down payment.  

The tax deduction was first approved by Congress in late 2006 and applied to loans with mortgage insurance that closed in 2007. In an important move to further assist borrowers, Congress voted in December of last year to extend the mortgage insurance tax deduction through 2010 as part of the Mortgage Forgiveness Debt Relief Act of 2007.

The deduction allows households with an adjusted gross income of $100,000 or less to deduct the full cost of their government or private mortgage insurance premiums on their federal tax returns. Families with incomes between $100,000 and $109,000 are eligible for a reduced deduction. On average, the tax break could be worth $350 per taxpayer.

Approval of the tax deduction by Congress — and extending it through 2010 — was strongly supported by a number of consumer, civic, African American and Hispanic groups.

“Making the cost of mortgage insurance tax deductible helps those who need it most: low- and moderate-income Americans, primarily first-time home buyers, who are financially responsible but simply don’t have the means to amass a 20 percent down payment,” Hutchinson says.

Buying a home is usually the biggest financial decision for any family. With riskier mortgage financing options, such as interest-only loans and piggyback mortgages, quickly fading from the marketplace, low down payment loans with mortgage insurance remain readily available for qualified borrowers.

An added benefit is that private mortgage insurance can be canceled when the home owner builds up sufficient equity in the home, with nine in 10 borrowers canceling private mortgage insurance within 60 months.

For more information on tax deduction and home loans with low down payments visit

About Luke Ford

Raised a Seventh-Day Adventist at Avondale College in Australia, Luke Ford moved to California in 1977. He graduated from Placer High School in 1984, reported the news at KAHI/KHYL radio for three years, attended Sierra College and UCLA, was largely bedridden by Chronic Fatigue Syndrome for six years, and converted to Judaism in 1993. From 1997-2007, Luke made his living from blogging. Living by Beverly Hills (, he now teaches the Alexander Technique (moving the way the body likes to move). Lessons cost $100 each and last about 45 minutes. In 2011, Luke completed a three-year teaching course at the Alexander Training Institute of Los Angeles. His personal Alexander Technique website is Luke is the author of five books, including: » The Producers: Profiles in Frustration » Yesterday’s News Tomorrow: Inside American Jewish Journalism
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