Intown Atlanta & Decatur Real Estate

Major Mortgage Insurer Tightens Standards

The Associated Press is reporting that, beginning in March 2008, MGIC Investment Corp., the country's biggest mortgage insurer, will require at least 5% down on homes in Atlanta (as well as a number of other "restricted markets"). Condo buyers will have to put at least 10% down. The company will also refuse to insure mortgages with little or no documentation and will not insure investment property. Also, buyers in the restricted markets who put down 10% will have to have FICO scores of at least 620 out of 850 -- buyers putting down less than 10% will need FICO scores of at least 680.

Mortgage insurance is typically required on home loans when the buyer is putting less than 20% down.

Congress Extends Mortgage Insurance Tax Deduction

In December, Congress passed the Mortgage Forgiveness Debt Relief Act of 2007, which, among other things, extended the tax deduction on private mortgage insurance (PMI) through 2010. Private mortgage protects the lender in case of borrower default and is typically required for mortgages when the borrower is putting less than 20% down. These mortgage insurance premiums are now 100% tax deductible for individuals and families with an adjusted gross income (AGI) of less than $100,000, with a partial deduction allowed with an AGI of up to $109,000. According to the Mortgage Insurance Companies of America, an industry group, the deduction will amount to approximately $350/year for the average taxpayer. Only properties purchased between January 1, 2007 and December 2010 qualify for the deduction under the Act. Contact your tax professional for more details.