Mortgage and Insurance In the U.S.A.

As you probably know, Private Mortgage Insurance (PMI) is required any time a loan is taken out with a higher "loan to value" ratio of 80%, as the loan is riskier to the lender. Mortgage Insurance allows a consumer to purchase a home with little or no down payment, or refinance at higher loan to values than 80%...but the beneficiary of the Mortgage Insurance is the lender, as it only provides coverage to the lender to protect against financial loss should the homeowner default on the loan.
And historically, these Mortgage Insurance premiums have never been tax deductible, so many consumers turned to the "piggyback" loan strategy. A "piggyback" means the first mortgage is placed at 80% of the value of the home - therefore not requiring mortgage insurance - and the additional funds needed to finance the home were placed on a second home loan, "piggybacked" behind the first mortgage...and providing more tax-deductible interest.
But these second home loan rates have risen dramatically higher in recent years, since most are tied to the Fed Funds Rate...and the Fed has made seventeen .25% rate hikes since June 2004 - a total increase of 4.25%! And although the Fed is currently in a "paused" mode...there is debate as to whether or not the Fed is done hiking rates just yet.
But in the final session hours of 2006 - Congress passed a law with a change to the tax code which will allow Mortgage Insurance Premiums to be claimed as tax deductions for households earning less than $100k annually.
What does this mean?
Primarily, it means that mortgage options that include standard Private Mortgage Insurance will now become much more competitive and attractive, especially as the Mortgage Insurance premium payment can often be later removed with sufficient property appreciation or declining loan balance, assuming timely payments. In fact, hundreds of thousands of 2007 home buyers or home refinances will save an estimated total of $91,000,000 when they file their tax returns in 2008.
Brad Kauffman has many years experience regarding Mortgages, insurance and other issues pertaining to buying property, and as such provide out clients with a comprehensive package

Source - Brad Kauffman