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Robin D.
Robin D., Senior Tax Advisor 4
Category: Tax
Satisfied Customers: 13339
Experience:  15years with H & R Block. Divisional leader, Instructor
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If a senior has an FHA reverse mortgage and would like to pay

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If a senior has an FHA reverse mortgage and would like to pay some of it down, is the Mortgage Insurance Premium deductable? Does it have to be amortized over 84 months?
HelloCustomer
You did not ask about this portion, perhaps you know already, but let me adise first that any interest you pay when you pay down some of that Reverse Mortgage can be used as a deduction on your Schedule A as mortgage interest.
PMI – extended through 2010. Late in 2007, Congress extended the tax deduction for homeowners paying private mortgage insurance through 2010. This one has some restrictions – you must have bought or refinanced the home after January 1, 2007 and have an adjusted gross income under $110,000.
If you paid the PMI at the closing then you will need to amortize the amount over the life of the loan.
Federal law requires PMI to be cancelled under certain circumstances; for example, when you have paid off a certain percentage of your mortgage or your home's property value has increased to a certain percentage above the value of the mortgage. Check with your Reverse Mortgage Issuer for complete information.
I sincerely XXXXX XXXXX information is helpful,
Customer: replied 7 years ago.
Robin: Reverse Mortgages do not have Private Mortgage Insurance; they have a FHA Mortgage Insurance Premium (MIP). My client wants to pre-pay the MIP; can she deduct it and will she get a 1098 from the lender?
The FHA just has a different name for it but it is still insurance to secure the mortgage. She can and it will be amortized if she pays down the mortgage. In other words only when payments are made to FHA can a deduction be used since the Reverse Mortgage money is not taxable to your client no deduction is allowed until the mortgage is paid back to FHA (this usually occurs at the death of the homeowner but lately many people are wanting to get out of the Reverse Mortgage).
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