RALEIGH, N.C., Dec. 9 /PRNewswire/ -- Home affordability and the housing industry received a big boost today from Congress, which approved a measure that would for the first time allow lower- and moderate-income homebuyers to deduct the full cost of mortgage insurance from their federal taxes in 2007. The provision was included in the omnibus tax bill approved by Congress early Sunday morning.
"Many homeowners who used adjustable and exotic loans to buy houses during the housing boom of the last few years are now feeling the pinch as their interest rates reset," said Kevin Schneider, president of the U.S. mortgage insurance business for Genworth Financial, Inc. . "This new legislation gives homebuyers the option of choosing a low down payment mortgage that offers both tax deductibility and fixed monthly payments. This is an important step forward for U.S. housing."
The legislation passed today makes all mortgage insurance premium payments deductible for homeowners with adjusted gross household incomes of $100,000 or less. It applies to all new mortgage originations beginning January 1, 2007.
"This tax relief will aid nearly one million Americans looking to buy a home with an affordable mortgage in the coming year," Schneider said. "In today's volatile housing market, a 30-year fixed rate mortgage with mortgage insurance is a more secure option for homebuyers, and it can cost less each month than a combination of two loans."
Private mortgage insurance enables people to realize their dreams of homeownership sooner by making mortgages with low down payments possible. With it, homebuyers can purchase or refinance a house with as little as five percent, three percent or even no money down. Mortgage insurance generally is cancelable after the owner's equity in the home reaches 20 percent.
About Genworth Financial
Genworth is a leading insurance holding company, serving the lifestyle protection, retirement income, investment and mortgage insurance needs of more than 15 million customers, and has operations in 24 countries. For more information, visit http://www.genworth.com/.
