10 Tips for Finding the Best Deal on Your Mortgage #loan #mortgage


#best mortgage company

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10 Tips for Finding the Best Deal on Your Mortgage

Your situation will dictate whether going to directly to a bank, a mortgage lender or a broker is best. (Getty Images)

Most people will need a mortgage to buy a home. That means that not only do you need to shop for a home. you need to shop for a home loan. But a survey of 2013 borrowers by the U.S. Consumer Financial Protection Bureau found that almost half of borrowers didn’t shop around before settling on a mortgage.

They should. In fact, you may find more loans to choose from than you do houses.

“Definitely shop around,” says Valentin Saportas, CEO and co-founder of MortgageHippo, a Chicago-based online mortgage application service that links buyers with mortgage brokers. “Don’t just go with the first option that you get. Being able to save even a little bit of money in your monthly payment definitely adds up.”

You should start looking for a mortgage professional before searching for a house. You want to make sure your credit is in order because mistakes can take months to correct. You also want to know how much house you can afford. You can run calculations online, but a good mortgage professional will better help you determine which loan is the best fit for you.

Finding the best deal on a mortgage can be a challenge because fees and rates change daily, sometimes more than once a day.

Whether you’ll get the best deal from going directly to a bank, a mortgage lender or a mortgage broker often depends on your situation, the mortgage pro handling your case and what’s being offered at the time. That means talking to actual people on the phone or in person, not just filling out an online form.

“There’s way too many variables in mortgage lending today to automate or streamline,” says Casey Fleming, author of “The Loan Guide: How to Get the Best Possible Mortgage” and a mortgage broker in the San Francisco Bay Area. “The online piece is nothing but a lead generation tool, and they hand it off to a real mortgage lender. The money comes from the exact same place, and the same people are involved.”

You can buy a home with as little as 3 percent down – and nothing down if you’re a veteran. But if you put less than 20 percent down. you’ll need private mortgage insurance (or the Federal Housing Administration equivalent) in most cases, which can add roughly $100 to a monthly payment on a $100,000 home.

To find a mortgage professional, start by asking friends, colleagues, relatives and your real estate agent. You might also ask any finance professionals you work with, such as accountants or financial advisors. If you’re a member of a credit union, ask there. Some credit unions and local banks do their own mortgage lending and others contract with brokers. Call the banks where you have accounts.

In general, banks have the fewest options available because they offer only their own products, but they may be more flexible if they’re lending their own money – and they may make a deal if you have substantial assets. “You could get a really good offer, but you have to dangle the assets,” Fleming says.

Mortgage brokers offer the largest number of options, since they can shop your loan among many lenders. “If your loan can be done, a broker can find a place to do it,” Fleming says. “My opinion is to go to a really honest broker. Without doubt, they are going to have access to better pricing than anyone else.”

While the rates and fees offered by lenders are usually comparable, lenders that see a slowdown in business may offer better pricing, and a good broker will grab those deals.

The difficulty of the mortgage process, including the need to gather reams of paper documents, is one of the reasons for the growth of lending that occurs at least partly online. “Customer service doesn’t just happen on the phone or in person,” Saportas says. Once MortgageHippo links the borrower with a broker, the parties can decide how they want to communicate.

SoFi, a lender based in San Francisco, bills itself as the first lender to provide prequalification with any device. including a smartphone. “We believe that we are the only one able to offer a personalized quote within one minute on any device,” says Dan Macklin, co-founder and vice president of business development. “That’s proving popular with the younger generation.” Humans in California also are available if you prefer a phone consultation. “We like to think it’s automated but with a human touch when you need it,” he says.

Here are 10 tips for getting the best mortgage deal:

Compare apples to apples. When you get quotes from companies, don’t look at just the interest rate. Look at the rate and all the fees, including points, origination fees and any other fees charged by the lender. A “no-fee” loan just means the fees are included in the rates.

Ask to see the Good Faith Estimate worksheet, not just the GFE. Many people consider the current Good Faith Estimate, required by law, to be confusing, and it is being replaced August 1 with what consumer advocates hope will be a more useful document. Until then, ask for the complete worksheet, and make sure it itemizes all the fees.

Interview the actual person who will handle your loan. That could be a mortgage broker, a bank employee or a loan officer. Ask about experience and qualifications. Is the person licensed (required for brokers but not bank employees)? Does he or she belong to the National Association of Mortgage Professionals or your state’s mortgage professional association? Ask for references and look at reviews online. “The company does not matter as much as the originator,” Fleming says. “Even good companies hire really bad people.”

Plan for costs that are not charged by the lender. Additional costs include title insurance, real estate transfer taxes and required escrows for property taxes and homeowner insurance. In some states, shopping for closing agents can save several thousand dollars, while escrow or closing costs are minimal in other states.

Make sure the lender offers the program that is best for you. Not all lenders offer FHA, VA or USDA Rural Development loans. Down payment requirements, loan-to-value ratios and credit requirements also vary by lender.

Get your free credit report before you start. This will not allow you to put your feet up on the desk and demand the best terms, as one commercial suggests, but it will let you know where you stand. “Just because you have a 700 credit score doesn’t put the ball in your court,” says Donald Frommeyer, chief executive officer of the National Association of Mortgage Professionals and a loan originator at American Midwest Bank in Indianapolis.

Give the loan officer all details about your situation when asking for quotes. People who are self-employed, have suffered a foreclosure or recently changed careers especially need a good loan officer. “One of the toughest things for me is to tell a customer, ‘Hey, I really can’t help you,’ but I always have a potential solution,” Frommeyer says. “I don’t like to pull credit on somebody until I talk to them about what I can do.”

Do you want to pay more upfront or get a lower interest rate. If you’re planning to keep the loan for 30 years, it may make sense for you to pay more upfront to get a lower rate. If you plan to sell or are going to refinance in a few years, it may not.

Ask about what documents will be required. All mortgages require significantly more documentation these days. Find out what’s required, and be prepared to provide it.

Know who you’re dealing with when you fill out an online form asking for rates. Will you get phone calls from mortgage brokers trying to gain your business? Will you get quotes online or via email? Most online forms require you to provide significant personal information before giving you quotes (and no one can provide an accurate quote without knowing your credit store). Will the service pull your credit once you fill in the form or wait until after you have talked to someone? Both MortgageHippo’s and SoFi’s automated systems rejected our freelance writer with good credit with no explanation, while a human broker would likely have suggested making a larger down payment or choosing a less expensive home.


Figuring the monthly payment on a house #mortgage #marketing


#house payment calculator with taxes

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How to Buy a House

Figuring the monthly payment on a mortgage

Your monthly payment includes more than just the repayment on the loan! It also includes property taxes and insurance, and if your down payment was less than 20%, then it also includes private mortgage insurance. Many mortgage calculators don’t include these amounts, which makes them kind of useless. My calculator (at right) gives you a more realistic picture of your real total monthly obligation.

For the down payment , enter the largest that you’re able to afford.

To show how much the interest rate and the down payment affect the monthly payment, here are some examples of monthly payments on a $180,000 home with a 30-year mortgage:

  1. 4% interest, 20% down: $987/month
  2. 4% interest, 5% down: $1230/month
  3. 8% interest, 20% down: $1357/month
  4. 8% interest, 5% down: $1669/month

Taxes, Insurance, and Maintenance

When you own a house, you have three new expenses that you didn’t have when renting:

  1. Property Tax (collected by your local government).
  2. Fire/Hazard Insurance (with insurance premiums payable to your insurance agent).
  3. Maintenance on your home.

To make it easier to pay for the first two, your lender provides a service called escrow . Your monthly mortgage payment includes amounts for taxes and insurance, which the bank holds for you, and then once a year they send the taxes to the tax assessor, and the insurance premium to your insurance agent. This service is free. It’s convenient because it spreads the big annual cost over twelve monthly payments, and because the bank takes care of the transactions for you.

But you don’t have to use the escrow service if you don’t want to. If you prefer to pay your taxes and insurance separately from your mortgage payment, you’re certainly welcome to do so. Just let your bank know that’s what you want to do.

Property taxes

Property tax rates vary widely from county to county It’s worth finding the actual amount on the home you want to buy, so you can better estimate your total monthly payments. Most local governments let you see the tax amount for a given property on their website, and here’s a county-by-county list of U.S. property tax rates. If you can’t find the tax for the house yourself, your lender or real estate agent can look it up for you.

Property taxes are generally paid at the end of the year, for the previous year. So in Dec. 2013 or Jan. 2014 you’ll pay taxes for 2013.

Property taxes are a little tricky at closing, and we’ll cover that when you get to the closing costs lesson. You can wait until then to learn about that.

Insurance

If you’ve never purchased insurance before, it’s not hard. Get quotes from two or three agents and compare. If you already have insurance for a car, one of your quotes should come from the same agent, since you usually get a discount by having both car and homeowners insurance with the same company. To find other agents, just do an web search for “homeowners insurance”.

Thankfully, states have mandated that insurance policies be standardized because there’s so much fine print you could never compare them easily otherwise. The main variables you’ll choose are:

  1. The amount of coverage. Typically, this should be the amount it would cost to replace your house if it burned to the ground. This amount is often less than you paid for your home, because you also bought the land the home is on. Naturally, you typically don’t insure the land, since it can’t burn down.

Insurance Deductible vs. Premium

  • The deductible. This is how much you have to pay out-of-pocket before your insurance kicks in. The lower the deductible, the higher your insurance premium. (“Premium” is just a fancy word for the amount you pay for insurance.) For example, at right is the deductible vs. premium for a policy covering $163,000 of replacement value. Personally, I carry a 5% deductible on my own home, and am prepared to be on the hook for the first 5% of losses if something happens to my home.

  • The perils you want covered. In insurance terms, a “peril” is something that costs you money, such as fire, a tree falling on your house, or burglary. All policies cover those, but most don’t cover floods, unless you pay for a flood insurance add-on.

    Maintenance

    While maintenance is a very real expense, it’s not included in your monthly payment, so you’ll need to prepared to pay for maintenance separately. Long-term maintenance often runs around 1% of the home value per year, so on a $175,000 home, figure $1750 per year (going up each year with inflation). If that sounds like a lot, consider that every 15 years or so you’ll need to replace your roof, which will cost several thousand dollars. (You could get a metal roof which will last your lifetime, like I did, but metal roofs cost more up front.) And every several years you’ll have to have a wood home repainted, which will run a few thousand dollars. Central heat/air systems don’t last forever, either.

    If you have decent savings, you don’t have to budget for maintenance. But if buying the home is going to be a stretch for you and you’re not good at saving, then try to put some money away each month in a separate account so you’ll be able to pay for maintenance as needed. A good amount is the value of your home divided by 1200. (e.g. on a $180,000 home, that would be $150/mo.)

    The rest of this page shows you how to calculate the mortgage payment manually with spreadsheet software (Excel, Numbers, etc.). If this doesn’t interest you, feel free to skip to the Down Payments page.

    Figuring the payments on a loan

    Here’s how to use a spreadsheet program to figure out the payments on a loan. Open up your trusty spreadsheet software and type the following into any cell:

    But instead of typing the letters A, B, and C, use these figures instead:

    A = Enter the interest rate of the loan. Note that the formula divides it by 12 because you want the monthly interest rate, not the yearly interest rate.

    B = Enter the number of months you’ll be making mortgage payments. That’s 180 for a 15-year loan, or 360 for a 30-year loan.

    C = Enter the amount of the loan. This is the price of the house, minus the down payment, plus closing costs (if you’re rolling the closing costs into the loan).

    Note that the result is a negative number. Don’t worry about that. If it bothers you, put a minus sign between the = sign and “PMT”.

    Here’s an example. Let’s say our home costs $140,000. We’re putting 5% down ($7,000), so we’ll only need to borrow $133,000. But we’re rolling the closing costs ($6,000) into the mortgage, which takes it back up to $139,000. Our interest rate is 8% and it’s a 30-year loan. So we’ve got:

    And our answer is $1020 a month. Don’t forget that your mortgage payment also includes taxes and insurance. (See that section above.) Let’s say that taxes are $2500/year and insurance is $1100/year. That’s $3600/year together, or $300/month. So your total monthly mortgage payment is $1320 ($1020 from what we figured earlier, plus $300 for taxes and insurance.)

    One more thing: If you put less than 20% down, you’ll probably have to pay for Private Mortgage Insurance (PMI). PMI generally costs about 1/3700th to 1/1500th the price of the home. (On a $120,000 home, you’ll pay $32 to $80/mo. for PMI).

    Using this formula to pay off a loan early

    You can use this formula to figure out how much you have to pay in order to pay your loan off early. For example, let’s say you’re five years into a 30-year mortgage, and you want to pay the loan off in another 13 years instead of another 25. Just enter in the principal remaining on your loan (should be listed in your coupon book or on your mortgage statement), and use the number of months you want to pay it off in (in this case, 13 years x 12 months/year = 156 months).

    If you liked this site then you might like some of my other sites:

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  • What Happens If You Default on a Second Mortgage? #mortgage #interest


    #2nd mortgage

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    What Happens If You Default on a Second Mortgage?

    If you have a second mortgage on your home and fall behind in payments, the second mortgage lender may or may not foreclose, depending on the value of your home. Read on to find out what happens if you stop making payments on a second mortgage and when that lender may decide to initiate a foreclosure.

    (To learn the ins and outs of the foreclosure process, and foreclosure procedures in your state, visit our Foreclosure Center .)

    Second Mortgages and Lien Priority

    A second mortgage is a loan you take out using your house as security that is junior to another mortgage (a first mortgage). A few common examples of second mortgages are home equity loans and home equity lines of credit (HELOCs).

    A senior lien, such as a first mortgage, takes priority over a junior lien, such as a second mortgage. Priority determines which lender gets paid before other lenders.

    Priority Is Determined by the Recording Date

    Generally, priority is determined by the date the mortgage or other lien is recorded in the county land records (though some liens, such as property tax liens, have automatic superiority over essentially all prior liens). First mortgages are, as the name suggests, typically recorded first and are then in first lien position. Second mortgages are usually recorded next and are therefore in second position. Judgment liens, if there are any, are often junior to a first mortgage and possibly a second mortgage, as well as perhaps other judgment liens previously filed by other creditors. (Learn more about when a creditor is allowed to place a lien on your property .)

    What Happens to a Second Mortgage’s Priority if You Refinance the First Mortgage?

    If you refinance your first mortgage, that lender will require the second mortgage lender to execute a subordination agreement. In a subordination agreement, the second mortgage holder consents to subordinating its loan to the refinanced loan. The subordination agreement allows the refinanced loan (the newest loan), which would be junior based on the recording date, to jump ahead in line and take the place of the first lender in terms of priority.

    What Happens When You Default on a Second Mortgage?

    A lender can choose to foreclose when a borrower becomes delinquent on its mortgage, whether the mortgage is a first or a second mortgage. If you default on your first mortgage, that lender will very likely begin foreclosure proceedings. If, on the other hand, you default on a second mortgage, whether or not that lender initiates a foreclosure will depend mainly on the current value of your home.

    (To learn about the foreclosure process in your state, check our Summary of State Foreclosure Laws .)

    Homes With Equity

    If you have equity in your home (this happens when the value of your home is greater than the amount you owe on your first mortgage), your second mortgage is at least partially secured. When you fall behind in payments on the second mortgage, the second mortgage holder will probably initiate a foreclosure because it will recover part or all of the money it loaned to you once the property is sold at a foreclosure sale. The more equity there is in the property, the greater the likelihood that the second mortgage holder will foreclose.

    Underwater Homes

    If your home is underwater (this happens when the value of your home is less than the amount you owe on your first mortgage), your second mortgage is effectively unsecured. This means that if the second mortgage holder were to foreclose, there wouldn’t be enough proceeds from the foreclosure sale to pay anything to that lender.

    In most cases, if you’re underwater and fall behind on payments for your second mortgage, the holder of the second mortgage will probably not start a foreclosure since all the proceeds from the foreclosure sale would go to the senior lender. However, the junior lender could still sue you personally for repayment of the loan.

    Lawsuits From Lenders on Second Mortgages, HELOCs, and Other Junior Lienholders

    Even if the second mortgage holder decides not to foreclose, that lender can sue you to recover the money it loaned you. This commonly happens after the first mortgage holder forecloses (though it could happen sooner). In a first-mortgage foreclosure, any junior liens (these would include second mortgages and HELOCs, among others) are also foreclosed and those junior lienholders lose their security interest in the real estate. This is referred to as a “sold-out junior lienholder.”

    Sold-out junior lienholders. When a junior mortgage holder has been sold-out in a first-mortgage foreclosure, that junior mortgage holder usually can, depending on state law, sue you personally on the promissory note to recover the money. (Learn more in Nolo’s article What Happens to Liens and Second Mortgages in Foreclosure? )

    How second mortgage holders collect from you. If the junior lender wins the lawsuit and gets a money judgment against you, generally the lender may collect this amount by doing such things as garnishing your wages or levying your bank account. (Learn about methods that creditors can use to collect judgments .)

    Filing for bankruptcy may provide some relief. A bankruptcy can reduce or eliminate this type of debt. (For more articles on bankruptcy, including bankruptcy basics, bankruptcy procedures, and specific information about filing bankruptcy in your state, visit our Bankruptcy topic area.)

    Options to Avoid to Foreclosure

    If you are struggling to make your first and/or second mortgage payments, your home is underwater, or foreclosure is imminent, visit our Alternatives to Foreclosure area.


    How to Avoid Taxes on Canceled Mortgage Debt – TurboTax Tax Tips & Videos #liberty


    #mortgage relief act

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    How to Avoid Taxes on Canceled Mortgage Debt

    The Internal Revenue Service considers most cancelled debts as income for the recipient. The amount of a loan or mortgage forgiven by a lender is taxed as though the borrower earned that amount as income, says Cappy Pearson, tax preparation specialist. However, the Mortgage Debt Relief Act does allow an exemption for certain mortgage or foreclosure situations.

    Adding forgiven debts to income

    If your forgiven debt is subject to taxation, you will usually receive a form 1099-C, Cancellation of Debt, from the lender, showing the amount of canceled debt. You ll file the 1099-C with your federal tax return, and the amount of canceled debt is added to your gross income.

    There are, however, exceptions and exclusions that may save you from the requirement to report canceled debt as part of your income.

    Exceptions and exclusions

    Not all canceled debt is subject to income tax. The IRS recognizes both exceptions to canceled debt rules as well as amounts that are excluded from gross income due to their origin.
    Exceptions include:

    • Gifts, bequests or inheritances
    • Some qualified student loans
    • Any debt that, had it been paid, would have been a deductible item for the borrower
    • A qualified reduction in price offered by a seller
    • Certain payments on the balance of a mortgage under the Home Affordable Modification Program

    When a loan is secured by property, such as a mortgage where the home and land stand as collateral, and the lender takes the property as full or partial settlement of the debt, it is considered a sale for tax purposes, not a forgiven debt. In that case, you may need to report capital gains or losses on the sale of the property, but you will not need to add forgiven debt to your income.
    Exclusions include:

    • Debt canceled in a Title 11 bankruptcy or during insolvency
    • Canceled qualified farm debt
    • Canceled qualified real property business debt
    • Principal residence indebtedness under terms of the Mortgage Debt Relief Act (2007 through 2016). This can also apply to debt that is discharged in 2017 provided that there was a written agreement entered into in 2016.

    If you claim an exclusion, you can t claim tax credits or capital losses or otherwise improve your tax situation using the excluded property.

    The Mortgage Debt Relief Act of 2007

    Applying only to your principal residence, the Mortgage Debt Relief Act excluded as income any debt discharge up to $2 million. Provisions of the Act applied to most homeowners, and it included partial debt relief gained through mortgage restructuring as well as full foreclosure. Refinancing was also allowed, but only up to the amount of principal balance of the original mortgage.

    The Act also covered loans and subsequent debt forgiveness for amounts borrowed to substantially improve a principal residence. You cannot use provisions of the Act for other canceled debts, and the relieved debt must be secured by the principal residence property. The Act covered debt forgiven within the calendar years of 2007 to 2016. This can also apply to debt that is discharged in 2017 provided that there was a written agreement entered into in 2016.

    Extension of the Mortgage Debt Relief Act

    The Act initially covered a three-year period between 2007 and 2010, but was extended four times, to 2012, 2013, 2014 and then to 2016. This can also apply to debt that is discharged in 2017 provided that there was a written agreement entered into in 2016.

    Another way around the tax bite

    If you re not covered by the special tax break for principal residences described above, there are two very important exceptions to the cancelled debt = taxable income rule.

    The cancelled debt is not income, even if you receive a Form 1099-C, if

    1. You received the cancelled debt due to bankruptcy filing, or
    2. To the extent you are insolvent immediately before the cancellation of the debt.

    Insolvency means your debts exceed the value of all your assets. You can exclude cancelled debt from income up to the amount that you are insolvent. For example, if you had assets of $80,000 and debt of $100,000, you are considered to insolvent by $20,000. If you had $30,000 in debt cancelled at this time of insolvency, you would have to include only $10,000 ($30,000 minus $20,000) in your income.

    Cancelled debt can be a challenging tax situation especially during hard financial times. TurboTax will guide you through the cancelled debt maze, including the new legislation, and help minimize the pain from in these tough situations.

    Get every deduction
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    IRS Announces Guidance on the Principal Reduction Alternative Offered in the Home Affordable Modification Program


    #mortgage reduction

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    IRS Announces Guidance on the Principal Reduction Alternative Offered in the Home Affordable Modification Program (HAMP)

    IR-2013-8, Jan. 24, 2013

    WASHINGTON — The Internal Revenue Service today announced guidance to borrowers, mortgage loan holders and loan servicers who are participating in the Principal Reduction Alternative SM offered through the Department of the Treasury’s and Department of Housing and Urban Development’s Home Affordable Modification Program ® (HAMP-PRA ® ).

    To help financially distressed homeowners lower their monthly mortgage payments, Treasury and HUD established HAMP, which is described at www.makinghomeaffordable.gov. Under HAMP-PRA, the principal of the borrower’s mortgage may be reduced by a predetermined amount called the PRA Forbearance Amount if the borrower satisfies certain conditions during a trial period. The principal reduction occurs over three years.

    More specifically, if the loan is in good standing on the first, second and third annual anniversaries of the effective date of the trial period, the loan servicer reduces the unpaid principal balance of the loan by one-third of the initial PRA Forbearance Amount on each anniversary date. This means that if the borrower continues to make timely payments on the loan for three years, the entire PRA Forbearance Amount is forgiven. To encourage mortgage loan holders to participate in HAMP–PRA, the HAMP program administrator will make an incentive payment to the loan holder (called a PRA investor incentive payment) for each of the three years in which the loan principal balance is reduced.

    Guidance on Tax Consequences to Borrowers

    The guidance issued today provides that PRA investor incentive payments made by the HAMP program administrator to mortgage loan holders are treated as payments on the mortgage loans by the United States government on behalf of the borrowers. These payments are generally not taxable to the borrowers under the general welfare doctrine.

    If the principal amount of a mortgage loan is reduced by an amount that exceeds the total amount of the PRA investor incentive payments made to the mortgage loan holder, the borrower may be required to include the excess amount in gross income as income from the discharge of indebtedness. However, many borrowers will qualify for an exclusion from gross income.

    For example, a borrower may be eligible to exclude the discharge of indebtedness income from gross income if (1) the discharge of indebtedness occurs (in other words, the loan is modified) before Jan. 1, 2014, and the mortgage loan is qualified principal residence indebtedness, or (2) the discharge of indebtedness occurs when the borrower is insolvent. For additional exclusions that may apply, see Publication 4681. Canceled Debts, Foreclosures, Repossessions, and Abandonments (for Individuals).

    Borrowers receiving aid under the HAMP–PRA program may report any discharge of indebtedness income — whether included in, or excluded from, gross income — either in the year of the permanent modification of the mortgage loan or ratably over the three years in which the mortgage loan principal is reduced on the servicer’s books. Borrowers who exclude the discharge of indebtedness income must report both the amount of the income and any resulting reduction in basis or tax attributes on Form 982. Reduction of Tax Attributes Due to Discharge of Indebtedness (and Section 1082 Basis Adjustment).

    Guidance on Tax Consequences to Mortgage Loan Holders

    The guidance issued today explains that mortgage loan holders are required to file a Form 1099-C with respect to a borrower who realizes discharge of indebtedness income of $600 or more for the year in which the permanent modification of the mortgage loan occurs. This rule applies regardless of when the borrower chooses to report the income (that is, in the year of the permanent modification or one-third each year as the mortgage loan principal is reduced) and regardless of whether the borrower excludes some or all of the amount from gross income.

    Penalty relief is provided for mortgage loan holders that fail to timely file and furnish required Forms 1099-C, as long as certain requirements described in the guidance are satisfied.

    Details are in Revenue Procedure 2013-16 available on IRS.gov.

    Page Last Reviewed or Updated: 03-Nov-2015


    Get the FAQs on VA Home Loans #mortgage #brokers


    #can i get a home loan

    #

    Money

    Get the FAQs on VA Home Loans

    Why get a VA loan over other types?

    Simply put, a VA Home loan allows qualified buyers the opportunity to purchase a home with no down payment. Also, there are no monthly mortgage insurance premiums to pay, limitations on buyer’s closing costs, and an appraisal that informs the buyer of the property value. For most loans on new houses, construction is inspected at appropriate stages and a one year warranty is required from the builder. VA also performs personal loan servicing and offers financial counseling to help veterans having temporary financial difficulties.

    What if I’ve used a VA Home Loan Before?

    You can have previously-used entitlement restored one time only in order to purchase another home with a VA loan if the borrower has paid off the prior loan but still owns the property, and wants to use his entitlement to purchase a second home. This often occurs with active duty borrowers who PCS to a new station but want to keep their existing home for retirement. However, if the prior loan has been paid off and the property is no longer owned, they can have their entitlement restored as many times as they want. They can re-use their VA eligibility for every home purchase from the first to the last.

    Also, veterans who have used a VA loan before may still have remaining entitlement (see chart) to use for another VA loan. A veteran’s maximum entitlement is $89,912, and lenders will generally loan up to four times your available entitlement without a down payment, provided your income and credit qualifications are fine, and the property appraises for the asking price. Lenders may require that a combination of the guaranty entitlement and any cash down payment must equal at least 25 percent of the reasonable value or sales price of the property, whichever is less.

    *Lenders operate under their own regulations and guidelines in these matters

    For Alaska, Hawaii, Guam, and U.S. Virgin Islands residents, note that maximum original loan amounts have now been increased 50% higher for first mortgages.

    Remaining entitlement and restoration of entitlement is not automatic. It can be requested through the nearest VA office by completing VA Form 26-1880. The entitlement may also be restored one time only if the veteran has repaid the prior VA loan in full but has not disposed of the property purchased with the prior VA loan.

    What service is not eligible for a VA Home Loan?

    You are not eligible for VA financing solely based upon Active Duty for Training in the Reserves or National Guard.

    Note: Guard and Reservists are eligible if they were activated under the authority of title 10 U.S. Code as was the case for the Iraq/Afghanistan.

    Do all local lenders offer VA Loans?

    Not necessarily. Choose a VA-approved lending institution that can handle your home loan. A lender can help you review your credit history and determine how much of a loan you can qualify for. Be aware that different lenders have different closing costs and other fees, so it pays to shop around.

    What types of repayment options are available?

    The guarantees thirty-year loans with a choice of repayment plans: Traditional fixed payment (constant principal and interest); Graduated Payment Mortgage, or GPM (low initial payments which gradually rise to a level payment starting in the sixth year); and in some areas, Growing Equity Mortgages, or GEMs (gradually increasing payments with all of the increase applied to principal, resulting in an early payoff of the loan). There is no prepayment penalty.

    What is the maximum VA loan?

    Although there is no maximum VA loan (limited only by the reasonable value or the purchase price), lenders generally limit the maximum VA loan to $417,000.

    If I was discharged years ago and want to qualify for a VA loan, what forms or other documents will I need?

    Everyone is required to obtain a Certificate of Eligibility. If you do not have this Certificate, you will need to apply using VA Form 26-1880 and this will require a copy of DD-214 (Certificate of Release or Discharge from Active Duty) showing character of service. Along with the Certificate of Eligibility, loan applicants will need to document their credit, savings and employment information.

    Does a veteran’s home loan entitlement expire?

    No. Home loan entitlement is generally good until used if a person is on active duty. Once discharged or released from active duty before using an entitlement, a new determination of their eligibility must be made based on the length of service and the type of discharge received.

    Reservists are eligible for VA Loans, too. Who qualifies?

    Eligibility extends to members who have completed a total of 6 years in the Selected Reserves or National Guard (member of an active unit, attended required weekend drills and 2-week active duty for training) and received an honorable discharge; continue to serve in the Selected Reserves. Individuals who completed less than 6 years may be eligible if discharged for a service-connected disability. In addition, reservists and National Guard members who were activated on or after August 2, 1990, served at least 90 days and were discharged honorably are eligible.

    Can I build a home with a VA Home Loan?

    Yes. But there are several clauses that may make this difficult to accomplish. Many veterans use their VA Home Loan Certificate of Eligibility to negotiate in good faith a private home construction loan and then refinance the completed home using VA Home Loans.

    Download afree VA Loan Guidetoday.

    Can you take out a VA loan for a second home or vacation cabin?

    The law requires that you certify that you intend to occupy the property as your home. But it specifically provides that occupancy by the veteran’s spouse satisfies the personal occupancy requirement. However, there are no provisions for other family members. VA Home Loans are available for a variety of purposes including building, altering, or repairing a home; refinancing an existing home loan; buying a manufactured home with or without a lot; buying and improving a manufactured home lot; and installing a solar heating or cooling system or other weatherization improvements. You are also allowed to buy income property consisting of up to four units, provided you occupy one of the units.

    Can a veteran obtain a VA loan for the purchase of property in a foreign country?

    No. The property must be located in the United States, its territories, or possessions. The latter consist of Puerto Rico, Guam, Virgin Islands, American Samoa and Northern Mariana Islands.

    What is a VA-guaranteed manufactured home loan?

    A private lender makes a VA-guaranteed manufactured home loan. The VA will protect the lender against loss if the veteran or a later owner fails to repay the loan. The amount VA will guarantee is 40 percent of the loan amount or the veteran’s available entitlement, up to a maximum amount of $20,000. The guaranty amount is not the same as the amount a veteran can borrow.

    If a borrower has used a VA loan in the past, can that person be eligible again?

    Veterans who had a VA loan before may still have remaining entitlement to use for another VA loan. The current amount of entitlement available to each eligible veteran is $36,000. Veterans can have previously-used entitlement restored to purchase another home with a VA loan if: the property purchased with the prior VA loan has been sold and the loan paid in full, or if a qualified veteran buyer agrees to assume the VA loan and substitute his or her entitlement for the same amount of entitlement originally used by the veteran seller. The entitlement may also be restored one time only if the veteran has repaid the prior VA loan in full, but has not disposed of the property purchased with the prior VA loan.

    I am a Veteran who purchased a home with my spouse utilizing my VA eligibility. I am now divorced and my spouse was awarded the home. How do I get my eligibility back?

    When the property is awarded to the Veteran’s spouse as a result of the divorce, entitlement cannot be restored unless the spouse refinances the property and / or pays off the VA loan in full or the ex-spouse is a veteran who substitutes their entitlement.

    I heard the VA has an inventory of foreclosed homes. How can I find out more about this?

    The Department of Veterans Affairs (VA) acquires properties as a result of foreclosures on VA guaranteed loans. These acquired properties are marketed through a property management services contract with Ocwen Federal Bank FSB, West Palm Beach, Florida. Local listing agents through local Multi Listing Systems (MLS) list the properties. A list of properties for sale may also be obtained from Ocwen’s website at http://www.ocwen.com/ .

    NEXT STEP: Get started using your VA Home Loan, Download a free VA Loan Guide today.


    Current Interest Rates on Home Loans, Savings, Car loans – CD Rates #mortgage #caluculator


    #mortgage rate charts

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    Today’s Interest Rates and Financial Advice:

    Financial Advice

    • 7 ways to measure your financial success

    Just as blood pressure and cholesterol are valuable measures of your physical well-being, we’ve come up with the critical numbers you need to track the state of your financial health.

    September 17th 2016

  • What kind of return can we expect from a 401(k)?

    Something like 5% or 6% a year is reasonable, and long-term returns from 10 big mutual funds often found in 401(k) retirement plans show you could make even more than that.

    September 16th 2016

    • Is now the right time to refinance?

    For most homeowners, the answer is “yes.” By any historical measure, home loans remain incredibly cheap, and it’s possible to land a new, cheaper mortgage even if you have below-average credit and little equity in your home.

    September 16th 2016

  • Selling a car: How to limit your risk

    Selling a car on your own almost always means getting more money for it than if you had traded it in. Use these tips to limit your risk during the sale.

    September 15th 2016

  • 7 big questions your Closing Disclosure can answer

    Borrowers applying for a mortgage after Oct. 3, 2015, get a five-page form designed to make home loans easier to understand before the deal is finalized.

    September 15th 2016

  • Turn your investments over to a robo-adviser

    Websites using the same algorithm-based asset management strategies employed by human financial advisers are the hot new thing in investing. They provide a wide range of automated services at a fraction of the cost.

    September 14th 2016


  • Refinancing Your Mortgage – On Q Financial Mortgage Consultants #house #mortgage #calculator


    #refinancing your mortgage

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    Refinancing Your Mortgage

    Options for Refinancing your Home

    Due to the costs involved, refinancing is typically a benefit only if a borrower plans to stay in their home for a minimum of two to five years.

    What are the benefits of refinancing?

    Get a lower interest rate and lower payments.

    A lower interest rate may be available due to changes in market conditions. A lower rate could lower the monthly principal and interest mortgage payment.

    Get cash from the equity in your home.

    Cash-Out Refinances may allow a borrower with sufficient equity in their property to refinance their mortgage for more than is currently owed and pocket the difference.

    Change the mortgage length.

    A decrease in the length of a mortgage term (say from a 30 yr loan to a 15 year) may increase the monthly P I payment, but the loan may be paid off sooner. Refinancing to a lower interest rate, with a longer term mortgage will likely provide a homeowner a lower monthly payment; however the total amount of interest paid in the longer term could be more.

    Build equity more quickly.

    With lower monthly payments, it may be feasible to make additional payments and build up equity in the property more quickly.

    Convert an Adjustable-Rate Mortgage (ARM) to a Fixed-Rate Mortgage

    Interest rates for an ARM can increase or decrease. Some people are more comfortable switching to a Fixed-Rate Mortgage that has a steady interest rate and a steady principal interest monthly payment.

    If you’re a homeowner and are thinking about refinancing your loan reach out to an On Q Financial Mortgage Consultant to find out if you benefit from a refinance.


    Figuring the monthly payment on a house #mortgage #rates #comparison


    #house payment calculator with taxes

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    How to Buy a House

    Figuring the monthly payment on a mortgage

    Your monthly payment includes more than just the repayment on the loan! It also includes property taxes and insurance, and if your down payment was less than 20%, then it also includes private mortgage insurance. Many mortgage calculators don’t include these amounts, which makes them kind of useless. My calculator (at right) gives you a more realistic picture of your real total monthly obligation.

    For the down payment , enter the largest that you’re able to afford.

    To show how much the interest rate and the down payment affect the monthly payment, here are some examples of monthly payments on a $180,000 home with a 30-year mortgage:

    1. 4% interest, 20% down: $987/month
    2. 4% interest, 5% down: $1230/month
    3. 8% interest, 20% down: $1357/month
    4. 8% interest, 5% down: $1669/month

    Taxes, Insurance, and Maintenance

    When you own a house, you have three new expenses that you didn’t have when renting:

    1. Property Tax (collected by your local government).
    2. Fire/Hazard Insurance (with insurance premiums payable to your insurance agent).
    3. Maintenance on your home.

    To make it easier to pay for the first two, your lender provides a service called escrow . Your monthly mortgage payment includes amounts for taxes and insurance, which the bank holds for you, and then once a year they send the taxes to the tax assessor, and the insurance premium to your insurance agent. This service is free. It’s convenient because it spreads the big annual cost over twelve monthly payments, and because the bank takes care of the transactions for you.

    But you don’t have to use the escrow service if you don’t want to. If you prefer to pay your taxes and insurance separately from your mortgage payment, you’re certainly welcome to do so. Just let your bank know that’s what you want to do.

    Property taxes

    Property tax rates vary widely from county to county It’s worth finding the actual amount on the home you want to buy, so you can better estimate your total monthly payments. Most local governments let you see the tax amount for a given property on their website, and here’s a county-by-county list of U.S. property tax rates. If you can’t find the tax for the house yourself, your lender or real estate agent can look it up for you.

    Property taxes are generally paid at the end of the year, for the previous year. So in Dec. 2013 or Jan. 2014 you’ll pay taxes for 2013.

    Property taxes are a little tricky at closing, and we’ll cover that when you get to the closing costs lesson. You can wait until then to learn about that.

    Insurance

    If you’ve never purchased insurance before, it’s not hard. Get quotes from two or three agents and compare. If you already have insurance for a car, one of your quotes should come from the same agent, since you usually get a discount by having both car and homeowners insurance with the same company. To find other agents, just do an web search for “homeowners insurance”.

    Thankfully, states have mandated that insurance policies be standardized because there’s so much fine print you could never compare them easily otherwise. The main variables you’ll choose are:

    1. The amount of coverage. Typically, this should be the amount it would cost to replace your house if it burned to the ground. This amount is often less than you paid for your home, because you also bought the land the home is on. Naturally, you typically don’t insure the land, since it can’t burn down.

    Insurance Deductible vs. Premium

  • The deductible. This is how much you have to pay out-of-pocket before your insurance kicks in. The lower the deductible, the higher your insurance premium. (“Premium” is just a fancy word for the amount you pay for insurance.) For example, at right is the deductible vs. premium for a policy covering $163,000 of replacement value. Personally, I carry a 5% deductible on my own home, and am prepared to be on the hook for the first 5% of losses if something happens to my home.

  • The perils you want covered. In insurance terms, a “peril” is something that costs you money, such as fire, a tree falling on your house, or burglary. All policies cover those, but most don’t cover floods, unless you pay for a flood insurance add-on.

    Maintenance

    While maintenance is a very real expense, it’s not included in your monthly payment, so you’ll need to prepared to pay for maintenance separately. Long-term maintenance often runs around 1% of the home value per year, so on a $175,000 home, figure $1750 per year (going up each year with inflation). If that sounds like a lot, consider that every 15 years or so you’ll need to replace your roof, which will cost several thousand dollars. (You could get a metal roof which will last your lifetime, like I did, but metal roofs cost more up front.) And every several years you’ll have to have a wood home repainted, which will run a few thousand dollars. Central heat/air systems don’t last forever, either.

    If you have decent savings, you don’t have to budget for maintenance. But if buying the home is going to be a stretch for you and you’re not good at saving, then try to put some money away each month in a separate account so you’ll be able to pay for maintenance as needed. A good amount is the value of your home divided by 1200. (e.g. on a $180,000 home, that would be $150/mo.)

    The rest of this page shows you how to calculate the mortgage payment manually with spreadsheet software (Excel, Numbers, etc.). If this doesn’t interest you, feel free to skip to the Down Payments page.

    Figuring the payments on a loan

    Here’s how to use a spreadsheet program to figure out the payments on a loan. Open up your trusty spreadsheet software and type the following into any cell:

    But instead of typing the letters A, B, and C, use these figures instead:

    A = Enter the interest rate of the loan. Note that the formula divides it by 12 because you want the monthly interest rate, not the yearly interest rate.

    B = Enter the number of months you’ll be making mortgage payments. That’s 180 for a 15-year loan, or 360 for a 30-year loan.

    C = Enter the amount of the loan. This is the price of the house, minus the down payment, plus closing costs (if you’re rolling the closing costs into the loan).

    Note that the result is a negative number. Don’t worry about that. If it bothers you, put a minus sign between the = sign and “PMT”.

    Here’s an example. Let’s say our home costs $140,000. We’re putting 5% down ($7,000), so we’ll only need to borrow $133,000. But we’re rolling the closing costs ($6,000) into the mortgage, which takes it back up to $139,000. Our interest rate is 8% and it’s a 30-year loan. So we’ve got:

    And our answer is $1020 a month. Don’t forget that your mortgage payment also includes taxes and insurance. (See that section above.) Let’s say that taxes are $2500/year and insurance is $1100/year. That’s $3600/year together, or $300/month. So your total monthly mortgage payment is $1320 ($1020 from what we figured earlier, plus $300 for taxes and insurance.)

    One more thing: If you put less than 20% down, you’ll probably have to pay for Private Mortgage Insurance (PMI). PMI generally costs about 1/3700th to 1/1500th the price of the home. (On a $120,000 home, you’ll pay $32 to $80/mo. for PMI).

    Using this formula to pay off a loan early

    You can use this formula to figure out how much you have to pay in order to pay your loan off early. For example, let’s say you’re five years into a 30-year mortgage, and you want to pay the loan off in another 13 years instead of another 25. Just enter in the principal remaining on your loan (should be listed in your coupon book or on your mortgage statement), and use the number of months you want to pay it off in (in this case, 13 years x 12 months/year = 156 months).

    If you liked this site then you might like some of my other sites:

    How to Find Cheap AirfareHow to Save ElectricityHow to get listed ranked well in Google

    Entire site 1999-2016 Michael Bluejay Inc. All information is “use at your own risk” Contact


  • Reverse Mortgage Foreclosures On The Rise, Seniors Targeted For Scams #home #mortgage


    #reverse mortgage scam

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    Reverse Mortgage Foreclosures On The Rise, Seniors Targeted For Scams

    Reverse mortgages, a lifeline for seniors struggling to pay bills in allowing them to turn home equity into cash, are entering into foreclosure at an “alarming” rate, Consumer Financial Protection Bureau Director Richard Cordray said Wednesday.

    One out of every 10 seniors with a reverse mortgage is in default or foreclosure, Cordray said in a conference call with reporters on Wednesday timed to coincide with the release of a reverse mortgages report prepared for Congress.

    The agency also found that seniors often don’t really understand the terms of the loan, a problem exacerbated by deceptive mailings and other advertisements, Cordray said.

    “We will work with our partners at the federal, state and local level to root out these kinds of scams,” Cordray said. He described one flier that portrayed a reverse mortgage as a “government benefit,” which is wrong, and that contained “blatantly false information about loan repayment options.” He did not go into further detail about who sends out these notices but said that the agency has authority to ensure that the reverse mortgage market works well for consumers.

    Reverse mortgages let homeowners older than 62 borrow against the equity of their home without their having, in turn, to make any loan payments, provided that they stay in the house. This type of mortgage is traditionally structured so that the loan balance will gradually increase over time. Lenders, such as MetLife bank, which is currently the biggest issuer of these loans, then own a greater and greater stake in the property. Borrowers can stay in their home even if the loan balance exceeds the home’s value, but they are still responsible for taxes and insurance payments throughout the process. When a borrower dies, the heir of the estate sells off the home and repays the federally insured loan and keeps what is left over.

    The loans, however, have been controversial. Historically, reverse mortgages have had high costs and fees relative to traditional loans and consumer advocates have said the benefits may not outweigh the cost. As the CFPB notes in its report, senior citizens are often confused about the terms of the loans, even though a borrower wishing to obtain one of these loans, which are typically federally insured, must first see a qualified housing counselor.

    The original purpose envisioned for reverse mortgages was to provide a steady income stream for retirement. But in 2011, 73 percent of such borrowers took a lump sum payment instead. This may be a poor financial decision, according to the CFPB. That’s because seniors often don’t consider how the interest on this debt will cause their home equity to evaporate more quickly. In other cases, borrowers may be saving or investing the lump-sum proceeds and might be earning less than they are paying in interest, the CFPB said.

    More 60-somethings are also taking out reverse mortgages, the CFPB found. This can prove a problem should one of these seniors, who took a lump sum, decide to move elsewhere but learn that he or she is essentially stuck.

    The two largest reverse mortgage originators, Wells Fargo and Bank of America, exited the market in 2011. Wells Fargo cited concerns about the reputational risks of foreclosing on seniors as a result of tax and insurance defaults.

    New reverse mortgage issues hit a peak in 2008 and 2009, rising to more than 100,000 a year, but have since fallen rapidly to about 70,000 a year. About 582,000 reverse mortgages were outstanding as of November 2011.

    But with 32 million baby boomers poised to enter retirement, the market for these mortgages could rapidly grow, Cordray said.

    More: