Detour-Tax Time Tips

In the past few weeks we have seen more and more tax returns that either have errors on them or that what was filed was not the copy given to the client. When having your taxes done, make sure that what is filed with the IRS is the copy you get from your tax preparer. Also, as you sign your taxes, go through them. Make sure your address is correct, that deductions taken are accurate. Once you sign them, you are telling the IRS that they are right.
Also, some times family, friends, or preparers will give us ideas for write-offs that will help us this year, but could effect us in future years. A great example is when you live with a family member and help pay the mortgage. If you take any part of the interest write off on your taxes, then you will not qualify for any first time home-buyer assistance that may be available for the next three years.
Another example is when you take large 2106 expense deductions. 2106 deductions automatically reduce your income when trying to qualify for a mortgage. If you write-off $6000 per year that is $500 per month we have to reduce your income by. That could make or break a purchase transaction.
I hope these tips are helpful, please feel free to email or call me if you have any comments or questions.

Step Three: How much is a down payment?

When purchasing a home you will need to have some money for a down payment. There are all types of loans even 0% down, but no matter which loan, you will need to have assets in the bank or someone able to give you assets to purchase your home. When making an offer on a home the seller will want a good faith deposit. This is money that you give to the escrow company to be held until the property is ready to be transferred to you at sale. The seller wants to know you are serious and can ask for as little as .5% to 10%. Most commonly we see a minimum of $1000. That $1000 will be credited to you and will reduce the amount of money you need for your down payment and/or closing costs.
Typically if you do not receive or qualify for 0% down or any second mortgage or grant programs and you are a first time home buyer, you will need 3.5% of the purchase price plus closing costs to purchase your home. If you are purchasing a home for $150,000 you will need $5,250. This can be in your bank account, your 401k or retirement account, or can be gifted to you by an immediate family member. But that is not all you will need, there are the fees to pay the bank/lender, the title/escrow company, the notary, appraiser, pest inspector, etc...also, you will need to set up your impound account, the account that holds the funds to pay your taxes and insurance when due. These costs can reach 4-4.5% of the sales price (depending on time of year and current rates). That could be an additioanl $6750. Now, you can ask the seller to help you with closing costs, but there is no law stating that they have to.
Don't let these figures scare you, there are programs and loans available to help, but if you can start saving some of the money today, getting your loan in the future will be much easier. Contact me for more information and to get onto the road of home ownerhsip

Time for New Resolutions!

I believe I am going to take a new turn with my blog. Instead of just posting opinions and ideas about the mortgage industry, I am going to make it an online educational course. For those of you who are looking to purchase your first home, move into a bigger home, downsize into something smaller, invest in real estate, or buy that second home you have always wanted, I am going to put the how to on this website. If you want to know about a particular topic, comment or email me. I will address it in my next blog.
This will be the blog for the do it yourself, Internet savvy, real estate driven person. I hope that my knowledge will help you grow and achieve your dreams.

Tomorrow's Blog: Where Do I Begin?