Mortgage-financing benefit vanishes

Mortgage-financing benefit vanishes

Though its demise drew little attention because of the partisan year-end brawl over the payroll tax-cut extension in Congress, a key mortgage-financing benefit disappeared at the end of December: The ability of large numbers of homebuyers and owners to write off the premiums they pay for mortgage insurance.

The loss of that tax deduction — plus mandatory new fees imposed by Congress on all new conventional and FHA loans — could effectively ratchet up the costs of homeownership this year.

The expiration of mortgage-insurance deductibility will hit many low down payment conventional loans originated since 2007, plus virtually all new mortgages closed this year where the down payment is less than 20 percent.

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