Posts

$120 For A Piece of Fruit? Capital Gains Changes Could Spark MORE Selling; Why You Can’t Catch An Uber

BIDDING WAR FOR AN APPLE This very short TikTok video went viral last week, as it well should have b/c it is both so illustrative and entertaining. I had to share it again just in case any readers have not seen it. The best line: “I’ll take it for $100 – I’m from California and […]Read More

Please Don’t File Your Taxes – If…

TAX DEADLINE = MAY 17th B/c of COVID, the filing deadline for income taxes was extended from April 15th to May 17th this year, as most everyone knows. We typically send out this reminder in March, but I waited this year until now b/c of the deadline extension. WHEN BUYERS SHOULD NOT FILE TAXES We […]Read More

Tax Implications From Refinancing; Cash Out ≠ Income

Borrowers are often far too worried about tax implications from refinancing – b/c they are usually negligible.  APPRAISALS & PROPERTY TAXES No matter how high someone’s appraisal comes in (over the original purchase price), it will not affect their property taxes. This is b/c appraisals performed for purposes of obtaining financing are for lenders only […]Read More

Six Home Loan Tips For The Self-Employed

Applying For a Home Loan as a Self-Employed Business Owner There was a time when lenders would accept whatever income you put on your application as accurate and true. These were called “stated income” loans; for many obvious reasons, they no longer exist. There were also loan programs where the lender would accept a record […]Read More

Interest Rates/Mortgage Industry Update; When NOT to File Taxes

Interest rates have come back down but they are still about 1/4% to 3/8% higher than where they were when they bottomed out on March 9th. This is because the mortgage industry is still trying to fend off excess volume brought on by low rates and a surge of refis. And – it is also […]Read More

Capital Gains Taxes On Real Estate

CAPITAL GAINS 101 The IRS and many states collect capital gains taxes on the difference between what someone pays for an asset (their “basis”) vs what they sell it for. This tax applies to most assets such as stocks, cars, boats and of course real estate. EXCLUSION AMOUNTS The IRS allows property-sellers to ignore capital […]Read More

Three Important Tax Filing Tips for Homebuyers

With Tax Season upon us, I want to share a few reminders: If income is lower this year, self-employed borrowers might want to file an extension instead of filing tax returns. This is b/c lenders will often correlate to the most recent year only if income is declining, and that will of course adversely impact […]Read More

What Does “PITI” Mean for California Borrowers

What does “PITI” mean? Lots of borrowers are unsure what “PITI” means when it comes to their home loan. PITI is a common term used within the mortgage industry to describe the four factors that impact a loan. PITI (pronounced “pity”) stands for: Principal Interest Taxes Insurance Principal Principal refers to the actual amount of […]Read More

If You Owe Income Taxes, Can You Get a Mortgage? Yes!

INCOME TAXES OWED Income tax liabilities are a frequent issue during tax season, and worthy of addressing again. Borrowers can get mortgage financing if they owe income taxes, in most cases. This is important b/c borrowers often have limited funds for a down payment and cannot afford to pay their taxes without depleting those funds. […]Read More

Must Prove Taxes Are Paid; Payment Plan

We collect the last two years of filed tax returns from almost every borrower, as required for almost every loan program. If the tax returns indicate that income taxes are owed, we must show proof that the taxes have been paid. Proof can be in the form of a canceled check, a receipt from the […]Read More

Tax Transcripts; Proof Taxes Were Filed; 4506-T; How It Works

Every lender is required to get the last two years of tax returns from every borrower for almost every loan. We then have to prove that the tax returns are authentic and that they were actually filed with the IRS. This is why every borrower has to sign an IRS Form 4506-T as part of […]Read More

Income Taxes Owed Is OK; Tax Liens Must Be Paid Though

This is a quick reminder that borrowers can still obtain mortgage financing even if they owe income taxes.  But, a payment plan with the IRS must be in place. For FHA, we need proof of three payments, and for conventional, we need proof of one payment (and it can be made in escrow). Borrowers cannot obtain […]Read More

Self-employed Income Down in 2012? Don’t File Taxes Until Necessary

We recently had a self-employed borrower in contract to buy a house with very tight debt ratios. Her income was down in 2012 and she wanted to file taxes. But if she had, her debt ratios would have ended up too high and she would have no longer qualified for her purchase. This is a […]Read More