Many people who finance the purchase of a home have to pay Private Mortgage Insurance (PMI). This is often the case if they finance over 80% of the property's value, and/or are using an FHA or VA loan. The cost of this insurance is not inconsequential, especially when you consider that our property taxes and insurance premiums are on the rise.
In several trade publications and on some real estate websites, I have recently read that, starting in 2007, the PMI costs will become tax deductible on federal tax returns for some people, depending on their adjusted gross income. I have no other details other than these basics and can find nothing on the Internal Revenue site so far. Just telling you what I have seen and heard. You should see your own tax preparer or accountant for more information and confirmation of this. They are the experts and will be the best persons to tell you if this information is accurate and whether or not you will qualify for any deduction.
In Florida we have no state income tax. So if this deduction is valid, it would only apply to a federal tax returns for people living in our state.
Let me state again VERY clearly that I am not an account or income tax expert, so you definitely need to confirm this with your personal financial advisor or tax preparer. However, it is worth investigating to see if you can save some of your hard-earned money.