What is the mortgage insurance deduction?
It’s a deduction that allows you to deduct:
- The premiums paid for private mortgage insurance (PMI).
- The mortgage insurance premiums (MIPs) you paid to the Veterans Administration, the Federal Housing Administration, or the Rural Housing Administration.
Mortgage insurance protects your lender in the event that you are unable to make your mortgage payments. It’s also known as funding fee or guarantee fee. If you default on your loan, mortgage insurance reduces or eliminates losses to lenders.
Your qualified mortgage insurance is usually reported on Form 1098, Mortgage Interest Statement, Box 5 or on a year-end statement from your mortgage company.
If you're not sure what you paid on mortgage insurance, check your lender or mortgage insurer's website. (Homeowner’s insurance and hazard insurance aren’t deductible.)