Mortgage Insurance Still Tax Deductable for 2011

Posted by Mike Harrison | Posted in Uncategorized | Posted on 06-01-2011

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The mortgage insurance tax deduction was extended for another year when Obama signed the  2010 tax relief act. This deduction allows you to deduct all of your mortgage insurance premiums for the year of 2011. You are probably paying for private mortgage insurance if you purchased your home recently with less than 20% down. Private Mortgage Insurance (PMI) is insurance payable to a lender or trustee for a pool of securities that may be required when taking out a mortgage loan. (Wikipedia)

There are several restrictions. For example, you must have secured a mortgage after Jan 1st 2007 and have an income below $100,000 to receive the full tax deduction. If you refinanced after Jan 1st 2007 you may only be able to deduct a portion of the mortgage insurance. It can get a bit tricky figuring out exactly if and how much your deduction can be. Make sure you speak with a licensed tax preparer as this article should not be considered tax advice.

Is it Freddie or Fannie?

Posted by Mike Harrison | Posted in Mortgage Programs | Posted on 04-08-2010

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If you have a Utah Mortgage your loan is probably owned by Freddie Mac or Fannie Mae. No, Freddie Mac and Fannie Mae aren’t your aunt and uncle.  They both are government sponsored enterprises (GSE) and they make it possible for millions to get a home mortgage.

Both GSE’s buy Utah mortgages on the secondary market, put them in a group and then sell the mortgages to investors as mortgage backed securities (MBS). You might not even be aware they exist. Freddie and Fannie loaned the money behind the scenes and earned the return or took the loss net of the servicing fees of the bank. They usually don’t deal with the general public on a  day to day basis even if they are the ones who are backing your loan.

It might be important to find out who owns your loan when you refinancing your mortgage. There may be options you are not aware of,  for instance, some Freddie to Freddie loans allow you to be upside down on your home and still refinance.

Does Fannie Mae Own Your Mortgage? Loan Lookup Tool

Avoiding Foreclosure – Does Freddie Mac Own Your Mortgage?

If you don’t show up in either system call your lender and ask. It is possible to be in the system and not show up on either list.

Utah mortgages get $40 Million more for home loans

Posted by Mike Harrison | Posted in USDA Financing | Posted on 30-07-2010

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If you are looking for a Utah mortgage  you may be in luck. Utah just received an additional $40 million in Recovery Act funds for direct home loans through USDA Rural Development.
These loans are for Utah qualifying families considered to have low and very low incomes to purchase or build a home in a rural area.
The funds will not be available after September 30, 2010, so those interested are encouraged to act quickly, according to Janice Kocher, director of single family housing for USDA Rural Development in Utah.
The loans can be used to build a new home or purchase an existing one. So far, Utah has serviced 175 rural families through the direct home loan program, obligating over $27.9 million to help families achieve homeownership. The Recovery Act has funded 215 home loans for almost $37.8 million.
USDA Rural Development’s direct loan program features 100 percent financing and low interest rates. House payments are based on household income. The program also has built in provisions, for example, so that if someone loses his/her job, mortgage payments can be deferred and rolled into the end of the loan. This provision is only available to Rural Development borrowers after the loan has closed and isn’t available to families that have homes from other lenders.
To qualify, Utahans must have low or very low dependable income, good credit and debt level to show repayment of the loan. The houses must be in eligible rural areas, generally with population less than 20,000.
The low and very low designation is based on Median Household Income for each county, as well as how many people are living in the house.

Do we need stated income loans?

Posted by Mike Harrison | Posted in Mortgage Programs | Posted on 28-07-2010

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I get a request for a stated income loan at least once a week. Most are from self employed borrowers who are taking the full benefits of the tax codes and all the tax deductions available. (AKA they have a great accountant!) Most do not qualify for a traditional mortgage because their adjusted gross income (AGI) has been hammered too low from the tax deductions. Should it be “too bad, so sad ” for these borrowers even if they have 50% down?

I think stated income loans have their place in the mortgage loan pools. There are very low risk borrowers out there that cannot prove income or have a difficult time proving income for one reason or another. The ability to pay is only one part of the approval process, there are plenty of others ways to lessen the risk of a stated income loan. For example, requiring higher credit scores, larger down payments, more time on the job and/or larger reserves. The Phoenix Real Estate Guy shows an example of a stated loan in today’s market.

Now I admit that it got kind of crazy with the NINJA (No income, No Jobs, No Assets) loans that were taking place a few years ago. An investor cannot accurately determine risk with just a credit score. I have personally seen credit less then a year old with only two credit references above 750 (A 750 fico is considered a great score.) The rating agencies should have known better than to rate these stated loans as low risk loans even if they were performing.

Saratoga Springs gets $70,112 from Feds

Posted by Mike Harrison | Posted in Grant Money | Posted on 21-07-2010

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In an effort to assist the homeless, Saratoga Springs gets $70,112 along with four other local projects. The Department of Housing and Urban Development (HUD)  has issued a total of $1,333,721 to assist in services such as substance-abuse, mental-health counseling and job training.

City / County Amount Received
Tooele County $458,000
West Valley $415,800
Salt Lake County $374,220
Saratoga Springs $70,112
Springville $15,069

I am not buying without a tax credit!

Posted by Mike Harrison | Posted in Grant Money | Posted on 14-07-2010

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I am not buying without a tax credit! That is what I heard from at least a dozen homebuyers at the end of last month.

I have the opportunity to speak with many homebuyers every month because of my blogging. I had at least a  dozen homebuyers call me at the 11th hour to ask if I could get their loan funded before the final closing  date of the tax credit deadline.  Every one of the homebuyers I spoke with stated that they would walk from the contract if they couldn’t get the $8,000 tax credit. I can personally say that every one of my clients met the deadline.

For a homebuyer to qualify for the tax credit you had to sign a purchase contract on or before April 31st, however you had until June 30th to finalize, fund, and record your transaction. An estimated 200,000 homebuyers across the nation were going to miss that deadline. They were up against the wall because the lender of their choice was not able to fund on time. The $8,000 was too big of an incentive to lose so the majority of homebuyers were going to walk away from the contract leaving 200,000 homesellers trying to find another buyer and without the help of a tax credit.

You are probably aware congress did extend the recording deadline for the homebuyers until Sept 30th 2010. I wonder how many homebuyers will miss that date.

Homes sales in Utah best since 2007

Posted by Mike Harrison | Posted in Home Sales | Posted on 12-07-2010

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With the help of tax credits and Utah grant money homes sales have had their best quarter since 2007.

Home sales seem to be fairly steady in Utah however, the stabilization has a lot to do with the most recent $8,000 federal tax credit that ended in April of this year. Skeptics think that the U.S. will see a continued decrease in home values now that the tax credit has expired. We may see 200,000 more transactions close nationally in the next two month with the tax credit included. That should give a slight boost to home sales and prices, but what is going to happen once the credits are all gone?

Utah Mortgage Rates sink to lowest levels EVER!

Posted by Mike Harrison | Posted in Mortgage Rates | Posted on 29-06-2010

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Utah Mortgage Rates have reached historic levels. Freddie Mac has kept track of the national average mortgage rates since 1971 and Freddie just issued a national average mortgage rate of 4.69%. Which is the lowest Freddie has ever recorded. Remember that is a national average. In Utah, Mortgage rates have reached as low as 4.25% (4.421%) in the last few days.

 Many investors are apprehensive about the stock market and have flooded Treasury Bonds with their funds. This transfer has caused  mortgage rates to plummet to the levels they are at now. Across the board it is expected to see mortgage refinance applications rise which will hopefully free up more money for our struggling economy.

Utah Homes in Provo Get $10,000 DPA / Grant!

Posted by Mike Harrison | Posted in Grant Money | Posted on 28-06-2010

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Provo Utah has always been aggressive with housing, offering several down payment assistant programs (DPA). A short while ago they opened up two new grants / DPA programs.

The first new  Provo grant is area restricted and is limited to the Pioneer Neighborhoods and Central Business District Neighborhoods. The grant is aimed towards anyone who makes above the maximum HUD income limits.

The DPA / Grant will come in the form of a 0% interest, deffered payment loan. No payment is due as long as the applicant continues to own and live in the home as their primary residence.

The property must be a single family home, a home with a legal accessory apartment, one half of a twin home or town home.

  • To qualify you will have to provide the city your complete tax returns for the past three years.
  • Paystubs for the last three months for all working household members over 18.
  • You will also need to complete  “Pre-Home Ownership Counseling”.
  • There are some other forms and documentation required.

For complete information and to see if you qualify click here Utah Grant Money

The first grant is area restricted. You can find out more about the area here.  Provo Utah Grant Map

It is targeting anyone who doesn’t already qualify for the $20,000 Provo Home Grant.

Mike Harrison
801-404-3540

Provo Utah adds new DPA Grant for Homebuyers

Posted by Mike Harrison | Posted in Grant Money | Posted on 28-06-2010

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Provo River

Provo Utah Homes are getting another boost from the city in the form of a $10,000 Down Payment Assistance (DPA). Provo is offering up to $10,000 of DPA for the entire city of Provo. Unlike the previous Provo Grants that have been offered for Utah Homes, this grant is not restricted to the “Pioneer Area”. This is exciting news especially since the Federal Tax credit is no longer available.

You can even get a portion of the DPA forgiven if you make “Exterior Improvements”. Up to $5,000 will be completely forgiven if these improvements are made within the first two years of occupancy. Although an official list of approved “Exterior Improvements” has not been released we were told most items that improve the curb appeal of the home will be acceptable.

Provo has mimicked its previous grants making the structure very similar to the already popular Pioneer Neighbor Hood Grant of $20,000. The grant does not need to be repaid unless the home ceases to be your primary residence. The property must also be a single-family home, a home with a legal accessory apartment, one half of a twin home or town home.

Need More information?
Help Me with My Grant!
Provo $10,000 grant for those over the income limits

Mike Harrison
801-404-3540