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Mortgage Speak

Documents you need and what to do with them to file your taxes after you purchase a home Purchasing a home affects many areas of your life. From your commute to work, where your kids go to school, to where you shop for groceries. Along with those things, there are tax benefits you need to be aware of. Depending on where you live, you may be eligible to deduct your mortgage insurance and property taxes from your income taxes each year. Tax Documents to Expect from Your Mortgage Lender Every year by January 31, you can expect a Form 1098 from your mortgage lender/servicer. Form 1098 is a Mortgage Interest Statement that lists the amount of interest you have paid on a mortgage during the tax year. The totals listed on the form can be used to lower your taxable income thus lowering your overall tax bill for the year. Tax Form 1098 that you receive also includes the outstanding principal balance owed on your loan as well as the real estate taxes you paid throughout the year. How to Determine How Much Interest You Can Deduct from Your Taxes Form 1098 lists all the mortgage interest you paid on your home loan for the taxable year on line 5. The form is not required to be submitted to the IRS (Internal Revenue Service) when you file your taxes. Only in the event of an audit may you need to present it to the IRS because the mortgage lender sends a copy to the IRS at the same time you are mailed a copy. Why You Need Your Closing Disclosure to File Your Taxes There are additional items listed on your closing disclosure that you received before you closed on your home that may be tax deductible. Items such as interim interest, real estate ...

Mortgage Speak

Don’t Make These Mistakes During the Holidays or You’ll Jeopardize Your Mortgage Loan! Your holiday to-do list is long enough without adding buying a house on top of everything else. There is decorating, shopping, wrapping, and multiple gatherings to attend. To knock one small thing off your list that makes a BIG impact, it’s keeping your credit in shape while you’re moving through the mortgage loan process. To keep your credit sparkling like the Macy’s tree in Times Square, consider adding some of these do’s and don’ts to your to-do or not-to-do lists. Don’t: Open any new credit accounts. Retailers will try to entice you to open a new credit account so you can save 10% or more. Don’t give in! This will cost you big while Underwriters are reviewing your loan application. If you think it won’t show up on your credit report immediately, think again. When you apply for any new credit account, it shows almost as soon as when you’re standing at the cash register checking out. Run up your credit card balances. You may have that credit balance to use to purchase presents, but if you run up your credit limits, this affects your Debt-to-Income Ratio. When your debt-to-income ratio reaches a certain point, Underwriters may question your affordability of the mortgage you are applying for. Put off paying bills. Be sure to pay all of your bills on time while you are applying for a mortgage . Even one missed payment can affect the determination of your mortgage being approved or not. Miss out on your annual free credit report . This is a no-brainer! The federal government gives you the ...

Mortgage Speak

Are you active or retired military, or even a military spouse? Good news! You may qualify for a VA loan! A VA loan is a type of loan that is guaranteed by the U.S. government to help active or retired military and their spouses obtain the dream of homeownership. The are several advantages to getting a VA-backed loan . Up to 100% financing, no monthly mortgage insurance, fixed and adjustable rates are available, among other perks. Explore other highlights as well as the 8 simple steps to a VA loan at BankSouth Mortgage. VA Loan Highlights: • Up to 100% financing • No monthly mortgage insurance • Available to active or retired military personnel, and spouses of the military • Fixed and adjustable rates are available • Conventional and Jumbo loan options available • Thin or alternate credit is allowed • 580 minimum credit score is required   Step 1: Get pre-qualified When you begin thinking about buying a home, contact BankSouth Mortgage to get pre-qualified. A pre-qualification gives you an estimate of the size of mortgage loan you qualify for based on your credit history, income, and assets. Step 2: Apply for your VA loan Once you get under contract, we will provide you with an initial list of documents that are needed to begin processing your loan. Quickly providing all of the requested documentation is essential to moving through the loan process without delays. Step 3: Disclosures Once we have a complete application, we will prepare a packet of disclosures for you to sign. Included in these disclosures is the Loan Estimate. It is very ...

Mortgage Speak

5 VA Loan Questions Answered

Nov 4
9:00
AM
Category | Mortgage Speak
November is National Military Family month, and it also includes Veterans Day on Monday, November 11. One of the many benefits the US Government provides to past and present members of our armed forces, and qualifying surviving spouses, is backing their home loans. A VA loan is a mortgage product offered by many private mortgage lenders that gives borrowers a zero-down payment mortgage option. The Department of Veterans Affairs (VA) guarantees part of the loan which allows the private mortgage lender to provide the veteran with more welcoming mortgage terms which make homeownership for veterans more attainable. The process of applying for and closing on a VA loan closely resembles that of other mortgage types. There are five main steps in the process of how a VA loan works: 1. Get prequalified 2. Provide loan documentation to your Mortgage Banker 3. Appraisal is ordered 4. Processing and Underwriting 5. Close on your loan Frequently Asked VA Loan Questions and their Answers Why should veterans choose a VA loan instead of a conventional loan? To start, VA mortgage loans give veterans the option of 100% financing, low loan fees, and typically lower than market interest rates. If the price for the home is equal to or lower than the appraised value, there is no money down required. A traditional conventional mortgage requires private mortgage insurance to be paid monthly and/or annually, whereas the VA loan fee, called the Funding Fee, is a one-time fee between 1.25% and 3.3% (as of October 2019) potentially saving the borrower thousands of dollars. What makes this Funding Fee different than conventional mortgage ...

Mortgage Speak

How Homeownership Builds Wealth The 4th of July is more than just a day for celebrating the freedom we gained as a nation nearly 250 years ago. It's a day for celebrating the individual freedom and opportunity afforded to each American — freedom that lets you reach for the stars and create the life you've always dreamed of. A part of that freedom means having the financial stability you need to pursue your life goals, and the earlier you secure financial freedom in life, the more opportunity you'll have to make your dreams a reality. If there's anything history has taught us, it's that homeownership is one of the best ways to build wealth and secure your financial future. Here are five primary ways being a homeowner can help you accomplish this: Homeownership can help create a forced savings . Most people aren't very good at putting money aside each month, but every financial expert would agree that having a savings cushion is essential for financial freedom. For homeowners, a monthly mortgage payment can act as a forced savings. As you pay down your principal, you build equity, which helps to increase your net worth. Homes usually appreciate in value. While there's no guarantee that the home you buy will appreciate, there's a pretty good chance. According to the Federal Housing Finance Agency's House Price Index , home values have appreciated an average of 3.33% each year since 1991. Based on this information, if you ...

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