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Why Your Asset Statements Matter to Mortgage Lenders in 2021

Applying for a loan can feel like an invasion of your privacy. As if lenders want to pull back the curtain on your life and analyze every detail, including your job, your income from that job, your tax returns, and, worst of all, copies of your asset statements. You want to ask them what they're looking for and why! Well, many borrowers do ask that question and with good reason. When strangers dig around in your personal life, it feels invasive. When they dig even deeper, asking questions about the documents you've provided,…
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First Time Homebuyer Tax Credit: Everything You Need to Know

On April 26th, The House of Representatives introduced new legislation that would provide the first time homebuyer tax credit of up to 10% of the purchase price, or $15,000. The move comes as a step forward in President Joe Biden’s proposal which he first announced back on the campaign trail in 2020. If the bill is passed, buyers will immediately have access to funds as they close.  To be eligible for the first time homebuyer tax credit, prospective buyers must not have owned or purchased a home within the last three years. They…
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How to Qualify for a Mortgage with an IRS Repayment Plan in 2021

  Whether you filed your completed taxes this April or an extension, you should already know your tax liability for the past year. If, despite your withholding or quarterly payments, you owe more than you can pay all at once, don’t panic. It’s not the end of the world even if you’re planning on applying for a mortgage right now. It’s always been possible to obtain a mortgage while you’re on a repayment plan for past tax liability by getting an FHA mortgage. FHA loans, insured by the Federal Government, require borrowers to…
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Understanding Prepaids & Impounds on Closing Disclosure

Two of the most confusing sections are Prepaids and Impounds on the Closing Disclosure (CD) -  Prepaids (Section F) and Initial Escrow Payment at Closing (Section G). Both these sections are under "Other Costs".   Understanding Prepaids in Section F on the Closing Disclosure: 01 - Homeowner's Insurance Premium - You will need to pay 12 months premium at the time of closing if the mortgage is for purchasing a home. If you are refinancing and your insurance is good for more than 60-days at the time of closing, you will not need…
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How to Get a Mortgage If You’re Self-Employed

  If you think being self-employed will limit your ability to get a mortgage, you're wrong. Qualifying guidelines are the same for anyone applying for a mortgage whether they receive a W-2 every year or they're self-employed. Borrowers qualify based on a minimum level of income, credit, and savings. Each category requires documentation to prove, aside from your assurances, that you do in fact: Earn enough of a steady income Have built and maintained a good credit history Have adequate savings for a down payment and all closing costs It's The Documentation Documenting…
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Low Housing Inventory: Why Is It Happening?

The housing market has recently seen startlingly low housing inventory. According to data from Altos Research, the number of homes currently on sale has dropped by about half from last winter. The drop is seen most prominently in metropolitan areas such as Atlanta, New York, Austin, and Chicago. Data from the National Association of Realtors shows that total housing inventory fell 29.5% from February 2020. The ongoing COVID-19 pandemic is to blame for much of the low housing inventory - low interest rates and the generalized need for larger housing and the subsequent…
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How to Calculate Your Profit in 2022 When Selling Your Rental Property

If your rental property investment goal is to reap a big profit when you sell, then understanding your potential taxes upfront is critical. Just knowing you'll pay a tax on any gain you earn and the general tax rate is not enough preparation. You need to look at capital gains, depreciation recapture, net investment income tax, and short versus long-term gain tax rates to get to your real net profit number. The details can be found in the Internal Revenue Service (IRS) Publication 550, Section 4. For starters - if you sell a…
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Mortgage Rates Climb to Highest Levels in Almost a Year; 30-Year Fixed Above 3%

Mortgage rates have now increased in six of the last eight weeks. According to Mortgage Bankers Association (MBA) latest weekly survey, average 30 Year Fixed mortgage rates climbed above 3%. The higher rates resulted in refinance activity falling 11% to its lowest levels since December 2020. The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($548,250 or less) increased to 3.08 percent, with points increasing to 0.46. The average contract interest rate for 30-year fixed-rate mortgages with jumbo loan balances (greater than $548,250) increased to 3.23 percent with points…
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Mortgage Loans for Dreamers (DACA)

Options for mortgage loans for Dreamers have increased. When the Federal Housing Administration (FHA) announced that it would permit individuals protected under the DACA (Deferred Action for Childhood Arrivals) program to apply for FHA mortgages, the dream of homeownership became that much more accessible to countless around the country.  FHA-backed mortgages join the list of mortgage loans for Dreamers, as they are commonly known. Dreamers are also eligible for conventional loans, or mortgages acquired by Fannie Mae and Freddie Mac. Conventional loans bring the benefit of being widespread - almost all lenders offer…
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FHA Loans for DACA Recipients Now Available

In a new move, the Federal Housing Administration (FHA) announced that it will permit individuals protected under the DACA (Deferred Action for Childhood Arrivals) program to apply for mortgages backed by the FHA, effective January 19th, 2021. The FHA permits DACA recipients to apply in a move that reverses the previous stipulation that barred “non-US citizens without lawful residency” from applying for FHA-insured mortgages.  DACA recipients, or “Dreamers” as they are commonly known, will now be able to realize their dreams of homeownership. FHA-backed loans are hugely popular because they carry a multitude…
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