Living in Portland

If you have mortgage insurance on your home loan, there are two very important things you should know:

First, the reason you were required to have mortgage insurance in the first place was because the ‘Loan to Value’ was greater than 80%.  Loan to Value is the difference between the market value of your home and the loan balance.  What most people forget is that the value of your home is going up every year.  (In Portland it went up 14% in 2006).  Once you hit the 20% equity position, you can contact your lender and ask to have the mortgage insurance payment dropped (most payments are over $100/per month).  They may require you to have an appraisal to document the value, but this is money well spent (usually $350.).  By law, after you have had your loan for two years, and you can document the value, the bank is required to remove the payment.  But remember, Banks don’t want to give up that money.  They will never contact you regarding the payment removal and may even argue about the two year law.

Second, for the tax years2007 thru 2010, mortgage insurance payments will be a tax deduction just like interest.  This is a one time thing, so be sure to look and your monthly statement to determine whether or not you are paying monthly mortgage insurance.