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Tis the Season…for Dreaded Taxes!
(But Here’s Some Help)
2012 Tax Transcripts
When 2012 income is used to qualify borrowers and tax returns are required, the following documentation must be provided:
- 2012 Tax Transcripts (if not available the following documentation is required)
- 2012 Tax Returns and
- 2012 Transcripts must be ordered and if not available a copy of IRS Notice Showing “No Record of Return Filed” must be provided and
- Documented Acknowledgement Receipt (e.g. IRS Officially Stamped Tax Returns or evidence the return was electronically received) from the IRS
- Previous Years Tax Transcripts
- If payment is owed for the 2012 tax year, proof the taxes were paid or evidence borrower has sufficient assets to pay liability.
An up to 20% Variance from current calendar year and transcripts from prior year are acceptable; anything over 20% will be at the underwriter’s discretion.
First-Time Home Buyer’s Tax Credit
Did you know First Time Home Buyer Tax Credits are still available? They are alive and well, but only when using an approved mortgage lender. This program is called Mortgage Credit Certificate Tax Credit Program (MMC) which we are an eligible lender for. All of Butte County Properties are eligible for this program. When a client participates in this program they will receive a 20% dollar for dollar credit on all the mortgage interest they pay in a year.
The MCC Tax Credit is a federal credit which can reduce potential federal income tax liability, creating additional net spendable income which borrowers may use toward their monthly mortgage payment. This MCC Tax Credit program may enable first-time homebuyers to convert a portion of their annual mortgage interest into a direct dollar for dollar tax credit on their U.S. individual income tax returns.
- Twenty Percent MCC tax credit rate
- Open to all areas within the state of California that is not currently covered by a partnering county or locality
- Income and sales price limits apply
- May be combined with a California Homebuyer’s Downpayment Assistance Program (CHDAP)
- Available with all Government or conventional first mortgage programs, including adjustable rate mortgages
- The term of the CalFHA MCC Tax Credit matches the term of the first mortgage; however, the tax credit will expire on the date the first mortgage loan is paid in full or refinanced
To apply, you must contact your participating Loan Officer. You may call Daniel Salas or Becke Reid at our office 530.897.4090
These documents will be needed:
- Pay stubs
- Bank statements
- Employment history
- Previous tax returns
Many Rules and Restrictions Apply. For More Information, check out CAL HFA’s website
If you are not a First-Time Buyer, you may still apply for the loan program depending on your location in California.
Looking for a Home?
Are you or someone you know currently trying to buy a new home? We have Property Listing Flyers for houses on the Market all over Northern California, complete with housing financial information on our Pinterest Page! New listings are added all the time, so make sure to “Follow” us.
Current Housing Industry News
Rates have managed to creep up a little recently. Rates go up a little, down a little – we could easily see this for all of 2013. (But gfee increases and loan level price adjustment changes will definitely impact borrower’s rates.) Inflation is well under control – and when was the last time we actually had economy-wide inflation – and the housing market is doing pretty well. But the big focus yesterday was on minutes from the Fed meeting. You’ll all recall the knee-jerk reaction last month to the release of those minutes, which for some reason put the fear of the end of QE# (the Fed buying securities) into the market. Prices went down, rates shot up, reminding us of the eventual exit of the Fed buying. Falling MBS prices result in higher mortgage rates. Rising MBS prices result in lower mortgage rates. Daily mortgage rates are based on real-time mortgage market pricing and are where mortgage rates come from. Inflation is currently not an issue.
Thursday the 10-yr was yielding 1.98% and MBS prices were marked higher (better) by about .125 than Wednesday’s closed by nearly .250 in price.
Redfin conducted an analysis of new property listings in the first five weeks of 2013 (January 1 to February 11) compared to the same period in 2012. Short sale listings decreased 54 percent from 2012, while REO listings are down by 46 percent. Overall, new listings declined 18 percent from 2012.
“Prices have gone up enough to stem the tide of short sales and bank-owned homes, but not enough to bring out the pent-up supply of would-be home sellers who have been sitting out the declining market” Redfin explained.
In addition, expansions to the Home Affordable Refinance Program (HARP) have allowed more underwater borrowers to stay in their home by broadening eligibility for refinancing, according to Redfin
Just how much HARP business is being originated? “Lots” probably isn’t a solid answer. The FHFA released Home Affordable Refinance Program (HARP) data for November 2012 and (drum roll please) the data show that HARP volume was strong in November, increasing 42% month over month (October was down 11%) and hitting 129,746 loans, while non-HARP GSE refis were up a more moderate 27%. The release also included moderate upward historical revisions for Fannie Mae HARP data based on a revised program definition, in line with Freddie Mac’s definition. (If you want more numbers, HARP volume as a percentage of total GSE refi increased to 23% from 21% in October, and high LTV loans – to borrowers with LTVs above 125 – increased 43% month over month to 30,670 loans.) Fannie Mae’s HARP data now includes second homes and investment property refinances with LTVs over 80, consistent with Freddie Mac.
But where does HARP go from there? Most expect the absolute level of HARP volume to remain elevated over the coming quarters, which will certainly help gain-on-sale margins in 2013, if not longer. Find out more about NEW Elite HARP 2.0 and Other Options for Underwater Home Owners.
Why NOW is the Time to get Your Home Loan
Mortgage Rates and Home Prices are on the rise while home inventory is decreasing, especially in California. Read why these events are taking place as well as why these factors mean now is the time to buy a home or refinance a current one in our article here.
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