Military Benefit: Tax Credit Extended!

Service members who were deployed overseas between Dec. 31, 2008 and May 1, 2009 and for a minimum of 90 days; can still get the $8,000 tax credit on a First Time Homebuyer Purchase! Or you could qualify for the $6,500 tax credit for current homeowners buying a new home! All you have to do to take advantage of this tax credit is sign a purchase contract before April 30, 2011 and close by June 30, 2011! Remember, you must live in the home for at least 3 years to keep the tax credit or you will have to repay the credit to the IRS. Even that has an exception for military families if they must relocate on orders!

A First Time Homebuyer is defined as anyone who has not owned a home in the past 3 years so, even if you have owned a home before, you could qualify under this guideline if it was sold more than 3 years ago!

For current homeowners, there are also special benefits to allow you to sell your current home. The first $250,000 ($500,000 if married filing jointly) of profits on the sale of your current home can be tax free if you have lived in that home for at least two of the preceeding ten years, as long as you were on qualified extended duty and living at least 50 miles from your home or in Government Quarters.

To find out more, contact Valley West Mortgage at (888) 931-0007. We can help you get started on your VA or Active Duty Mortgage Application right now! Detailed information on Military Tax Benefits are also available at the IRS website, www.irs.gov . Just search "Armed Forces Tax Guide".

An Introduction to Mortgage Insurance

Buying your first home can be daunting if you aren’t equipped with the right terms, so today we’re going to introduce to you one of the most widely used terms; Mortgage Insurance or Private Mortgage insurance (MI or PMI)

If your down payment on a home is less than 20 percent of the appraised value or sale price, you need to obtain mortgage insurance.

Mortgage insurance is sometimes referred to as private mortgage insurance, or PMI, in order to differentiate it from FHA and VA insurance types, which are run as government programs. The price of mortgage insurance varies depending on the size of the down payment and the loan, but it typically amounts to nearly 1/2 of 1% of the loan.

When dealing with mortgage insurance the borrower pays the premiums, but the lender is the beneficiary. The coverage protects lenders against the borrower’s default. If a borrower defaults on a mortgage, the insurance company ensures that the lender will be paid in full. Mortgage companies choose insurance providers for their customers, but the borrowers have to pay the bill. Usually, they do so in monthly installments as part of the monthly mortgage payment. But some lenders offer programs whereby the borrower pays the entire insurance premium in a lump sum at closing. This is called “Upfront PMI”.

Prequalify for a Mortgage

Want to prequalify for a mortgage?

Sometimes applying for a mortgage loan can be the most practical way when deciding to purchase a home. However, this experience can soon become a problem when trying to get your application approved. For better chances of getting your mortgage loan approval, we have provided these simple guidelines.

If you have a low credit score, fix it.
The very first thing that a lender will do is review your FICO Score. So if you don’t have a good credit score, you will have less options or a low chance of getting an approval. Make sure, before calling your lender that you have your most recent credit score, from each of the 3 major reporting agencies. If you see any erroneous information, dispute it.

Pay down your credit card balance
It’s always good to start with a clean slate. If you are a First Time Home-Buyer one very important thing to know is how to budget your cards. Keep a very low balance on your cards. This can greatly improve your chances of approval when applying for a home loan.

Prepare your money for the 20% down payment.
The hardest part is the most valuable part, right? And that’s getting the money you need for your down payment. But when you actually start paying on your mortgage, a great chunk of your monthly payments are towards your (PMI) Private Mortgage Insurance if you have less than a 20% down payment. So save until you are ready!

These steps relieve the most important and daunting experiences when attempting to purchase a home. Now when approaching a lender it’s going to feel a bit better.

Here are some documents that will come into play during the pre-qualification process:

Financial statements – this document indicates your monthly payments and other expenses, we can help you prepare these documents. This document creates the best profile for your loan application.
Credit Report – Make sure you have a copy of your credit of your credit report. Double check it and make sure there aren’t any inconsistencies make sure you have impressive assessments.
Pre Qualification Letter – Ask, from your lender for your pre-qualification letter. You’ll need this document as this letter contains all the information about you and your desire to purchase a home. It will also present you with a price range so you will be aware of what type of property you can afford.

The pre qualification letter is an indication that you are serious in purchasing a home or property. The seller will also pay more attention to your application if you have a pre qualification letter.

Once you prequalify and your loan is approved you should make sure that you don’t change anything important in that profile, don’t buy a new car, try not to lose your job, etc. Reportedly, there are many instances where people change things. Work with your loan officer; tell them everything about your financial situation that can impact your credit score.

Now, all your documents are in place, you have a beautiful set of FICO Scores and soon you’ll have your new home!

Mortgage Rates Falling

Now is the time to purchase your new home while mortgage rates stay low.

According to Freddie Mac in an article released by MSN:
Mortgage rates fall to lowest level of the year! In April, mortgage rates were dropping and a month later they're still dropping. So, If you are ready to buy a home, don't wait too long. Rates may be dropping but, realistically that may not last too much longer.

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An Introduction to Mortgage Insurance

Want to prequalify for a mortgage?

Now is the time to purchase your new home while mortgage rates stay low.

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