In my housing loan application it gives the breakdown of the principal mortgage payment, taxes, hazard insurance and mortgage insurance. What is the mortgage insurance? It’s an additional $70 per month.

Mortgage insurance, is PMI – if you put down less than 20%, YOU pay for the insurance that covers the bank, if you default on the loan. You pay this, until you have 20% equity in your house.

Hazard insurance is mortgage talk, for insurance that covers your house if something happens to it. Homeowners insurance, is insurance talk, for the cheapest kind of policy, that covers your house if something happens to it.

So. Mortgage insurance is PMI, and hazard and homeowners insurance are sort of the same thing.

This up-front mortgage insurance premium (MIP) was rolled/financed into my loan.
And if they are tax deductible, do I deduct all of it on the tax year I closed on my home? Or do I have to spread out the deductions over the lifetime of the loan?
Also, please provide a reference with your answer. I’ve done plenty of online searches and there is an abundance of conflicting information.

yes they are

This up-front mortgage insurance premium (MIP) was rolled/financed into my loan.
And if they are tax deductible, do I deduct all of it on the tax year I closed on my home? Or do I have to spread out the deductions over the lifetime of the loan?
Also, please provide a reference with your answer. I’ve done plenty of online searches and there is an abundance of conflicting information.

yes they are

I may not have a clear understanding of how mortgage insurance works. can anyone clarify?

You don’t! While you do pay, it is to protect the lenders position not yours! If they have to file bankruptcy. The insurance helps them not you! Now to address the real issues. If you can’t pay and have a good reason…you should contact the lender and talk to them about your situation. The phone number is on the monthly statement. Don’t speak to the collection department that is just an exercize in futility they get paid to COLLECT! See the problem? Find a way to speak to the loss mitigation department. Find a local REALTOR who specializes in Loss mitigation. You may e-mail me and I can refer you to someone who can help who doesn’t charge you anything up front. You never pay a loss mit consultant who comes to your house! Never! You only pay the bank and they pay us. Watch what you do there are scams out there! Good Luck.

I may not have a clear understanding of how mortgage insurance works. can anyone clarify?

You don’t! While you do pay, it is to protect the lenders position not yours! If they have to file bankruptcy. The insurance helps them not you! Now to address the real issues. If you can’t pay and have a good reason…you should contact the lender and talk to them about your situation. The phone number is on the monthly statement. Don’t speak to the collection department that is just an exercize in futility they get paid to COLLECT! See the problem? Find a way to speak to the loss mitigation department. Find a local REALTOR who specializes in Loss mitigation. You may e-mail me and I can refer you to someone who can help who doesn’t charge you anything up front. You never pay a loss mit consultant who comes to your house! Never! You only pay the bank and they pay us. Watch what you do there are scams out there! Good Luck.

I have created a simple mortgage calculator which will work out the mortgage payments for a specific loan to value (5%, 10%, 15% down etc) and it will add mortgage insurance and calculate the income required. How do i add a formula which will work out the mortgage insurance for any down payment amount. i’m looking for something like :

if down payment is X then mortgage insurance is Y

in canada the mortgage insurance will change with longer amortization as well
thanks for any help

In the us mortgage insurance will change with the amount financed and how much above the 80% the loan is. The tricky part in putting this in a calculator though is that it will also change some with different loan programs. Basically what I am trying to say is there is no set formula that can be applied to everyone. You can give people an idea, about $80/mo for a $150,000 95% loan but like I said its just going to be an idea since you dont want to give people a % from one program and have them use another and get a different figure.