Is FHA mortgage insurance tax deductible?
Please note that I am not talking about private mortgage insurance; I am talking about mutual mortgage insurance provided by an FHA loan.
- Bostonian In MOLv 71 decade agoFavorite Answer
That is deductible. However you may only deduct the portion that applied to 2007 so you must pro-rate the premium. If it's a 30 year mortgage, divide the total premium by 360 and multiply that by the number of months remaining in the year from the closing date going forward. If the MIP deduction is extended into future years you'll be able to deduct 12/360ths of the premium each year for as long as you hold the mortgage.
Also, you must have closed the loan in 2007 AND it must have been a purchase money mortgage, NOT a re-fi.