Tag Archive for: Taxes

What Does PITI Mean? A Mortgage Payment Guide

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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:Read More

4 Things Financial Guru Dave Ramsey Gets Horribly Wrong

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Dave Ramsey is a famous financial guru, author, and podcast host with an enormous following. His basic tenets include living 100% debt-free, maintaining a healthy emergency fund, living below your means, and investing in index funds. Read More

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

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I received many emails in response to my above-referenced blog on Friday, many of them pointing out that the potential changes in capital gains tax rates may actually spur more selling in the short run – which would increase inventory. The thought is that property holders may want to sell now before capital gains taxes go even higher. And, an additional point had to do with reforming Step-Up in Basis rules that allow investors to pass assets like real estate on to their heirs at current market values, and thus eliminate potential capital gains.Read More

Please Don’t File Your Taxes – If…

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We like to remind borrowers who are currently making offers or who have just made an offer to NOT file their tax returns. Borrowers should file taxes by all means, but we recommend filing an extension now (if making offers) and then filing taxes when the next deadline hits. Filing taxes shortly before a transaction is slated to close can either delay a transaction and/or kill it altogether.Read More

Tax Implications From Refinancing; Cash Out ≠ Income

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No matter how high someone’s appraisal comes in (over the original purchase price), it will not affect their property taxes. This is because appraisals performed for purposes of obtaining financing are for lenders only and are not public record (so local tax authorities do not see them). In California, the final purchase price is public record. The city can see real estate purchase prices when reassessing values for the new tax bill. Texas, however, is a nondisclosure state. This means that the purchase price of a home is not required to be publicly disclosed.Read More

Six Home Loan Tips For The Self-Employed

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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 of your bank deposits as documentation of income.Read More

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

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Fannie Mae recently announced guidelines to buy recently funded loans even if they are in forbearance, but the fees are substantial and they will not buy certain types of loans at all, such as cash-out refinances, some investment property loans or any and all jumbo loans.Read More

Capital Gains Taxes On Real Estate

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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.Read More

Three Important Tax Filing Tips for Homebuyers

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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 […]Read More

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

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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 […]Read More

Must Prove Taxes Are Paid; Payment Plan

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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 […]Read More

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

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Borrowers often wonder why lenders need IRS Form 4506-T and tax transcripts. These transcripts confirm returns were filed and match what’s in the loan file. While the process can be slow, it’s required for nearly every mortgage and ensures accuracy and compliance.Read More

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

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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, […]Read More