• Ask about our bank statement program which eliminates the use of tax returns and we just use the deposits in your bank account to calculate income.
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Home Equity Refinance

Home Equity Refinance

The mortgage professionals at MortgageDepot don’t want homeowners to be shocked when the time comes to file 2018 federal income tax returns. The interest deduction people routinely take each year could be a thing of the past. The new tax law could end up hurting homeowners who don’t prepare now by refinancing existing home equity loans into existing first mortgages. As the premier mortgage brokers, we can help homeowners preserve the interest deduction, but homeowners need to act quickly.

How does the tax law affect the mortgage interest deduction?

The new tax law made two changes affecting the ability of a homeowner to deduct mortgage interest. The first is a $750,000 limitation on how much mortgage debt is eligible for the interest deduction. The second change is limiting interest deductions to mortgage loans where the money borrowed is used to purchase or improve the home.

Using home equity loans to pay credit card debt, buy a new car or finance a child’s college tuition continues to be possible, but the tax law now prevents a borrower from claiming a tax write off for the interest paid on the loan. The deduction is preserved for money borrowed and used to improve the home or to purchase the home on which the equity loan is a lien.

MortgageDepot offers a solution for people with home equity loans

A possible solution to the loss of the home equity interest deduction is to refinance an existing first mortgage loan in an amount sufficient to incorporate the satisfaction of the home equity loan. We work with lenders throughout the country, so finding the right refinancing terms for a borrower is not a problem.

Contact us today

We help borrowers find solutions to their mortgage financing challenges. Call us today to learn more about how a mortgage broker from MortgageDepot can help.

Contact us today at (800) 535-0270 or email us by clicking here.

MortgageDepot lowers the cost of financing a home

MortgageDepot lowers the cost of financing a home

The closing costs associated with purchasing or refinancing a home can really add up, but we don’t believe it has to be that way. At MortgageDepot.com, we’ve reduced our underwriting fee to only $399 instead of the $1,500 charged by some lenders and brokers offering mortgage financing.

Closing costs, those expenses borrowers pay to obtain mortgage financing, include:

  • Points: A point is usually 1 percent of the principal balance paid at closing to reduce the rate of interest on the loan.
  • Appraisal fee: Payment to a professional who does an appraisal to determine a property’s current value, so the lender will know how much it can lend.
  • Document preparation: Lenders charge a fee for the preparation of the promissory note, mortgage and other documents required to close on the loan.

There are other closing costs charged by lenders, so borrowers need to be careful when shopping for a mortgage.

Reducing the underwriting fee to $399 is only one of the ways we are working to make mortgage financing affordable. Find out more about what MortgageDepot is doing for our borrowers by calling us today at (800) 535-0720 to speak with a mortgage broker.

Contact us for more info today at (800) 535-0270 or email us by clicking here.

Fix and Flip

Fix and Flip

Flipping an investment property? Here’s what you need to know.

So, you’ve been inspired by Chip and Joanna and have decided to find your very own fixer upper to flip as an investment. You’re not alone. The boom in home makeover shows has inspired a new wave of budding real estate investors to get into the business of flipping houses.

What they don’t show you is what happens behind the scenes. Before the fabulous new granite countertops, shiplap ceilings, or rainfall showerheads, there’s one small detail you can’t overlook – securing the funding to make it all happen. It’s important to take a step back and consider the cost of flipping a home with the purpose of resale in mind. On average, you should expect to add about 20-30% (sometimes more!) to the initial purchase price of the home. Here’s a couple things you need to know about funding your investment before diving headfirst into the world of house flipping.

You probably won’t be able to get a traditional home loan
And that’s okay — you probably won’t want to go through a bank anyway, especially when time is of the essence. Traditional mortgages can take well over a couple of months to close, meaning the prime property you had your eyes on will probably be long gone before you can secure funding.

However, time constraints aside, the biggest issue most flippers face with requesting a traditional mortgage loan from a bank is this; banks usually don’t lend on an investment property whose purchase price or requested mortgage amount is more than the appraised value. This means the amount of money you’d need to “fix” your investment property wouldn’t be covered, which defeats the point.

More problems arise if you’re a novice flipper. Banks are looking for very strong credit and want proof (think W-2s and pay stubs) that you’re good for the money they’re lending you. But don’t be discouraged! The majority of fix and flip/rehab loans are funded by private loaners, often by way of hard money loans. Which brings us to our next point…

Hard money loans are your best bet
Hard money loans (also known as rehab loans or “fix and flip” loans) are short-term, interest-only loans. While traditional lenders (read: banks) are looking for strong credit scores, income availability, and overall debt to income ratio, hard money lenders have a different approach: collateral-based lending.

Unlike traditional mortgage loans, these types of loans come from private lenders who take into consideration the “big picture”—the property’s purchase price, the scope and price of the work that needs to be done, and the projected resale value of your property post-flip. It also means if something goes wrong and you’re not able to repay the loan, the lender can take the property as collateral and make their money back.

Another key differentiator is that rehab/fix and flip loans typically don’t have early repayment penalties, meaning you don’t have to worry about getting dinged by a lender should you be able to pay off your loan in advance.

Contact us for more info today at (800) 535-0270 or email us by clicking here.

MortgageDepot Helping Borrowers Avoid Consequences Of Tax Lien Gap

MortgageDepot Helping Borrowers Avoid Consequences Of Tax Lien Gap

An agreement by the three major credit reporting agencies about the information included in credit reports could result in an increase in credit scores. At MortgageDepot, we want borrowers to understand how this could affect them.

Removing some judgments and liens

Under an agreement reached with state attorneys throughout the country, the bureaus agreed not to include credit information that could be inaccurate. As a result, some people will see fines for traffic tickets, tax liens and some judgments removed from their credit reports.

Effect of credit bureau action

The immediate effect of removal of tax liens and other credit items from credit reports will be an increase in credit scores. This could make some borrowers eligible for loans they might not have previously been able to obtain, which could lead some lenders to increase the cost of financing to cover the higher risk of default they might face.

How can MortgageDepot help?

We work with many reputable lenders to help our borrowers find a loan with terms that are right for them. MortgageDepot is committed to making certain any gap in tax lien information available to lenders does not adversely affect our borrowers. Find out how we can help you obtain financing for a purchase or for refinancing by call us at (800) 535-0720.

Contact us today at (800) 535-0270 or email us by clicking here.

Mortgage refinance program using Airbnb income

Mortgage refinance program using Airbnb income

The sources of income available to people has expanded in dramatic fashion over the years. More people are relying on unconventional sources of income as a primary means of support as opposed to drawing a salary or earning an hourly wage. At Mortgage Depot, providing superior service to our borrowers means finding loan programs with underwriting guidelines that accommodate how our borrowers earn a living. An example of this is a Fannie Mae program that is perfect for people earning income from Airbnb rentals.

Fannie Mae Airbnb program

Airbnb provides homeowners with a website on which they can list their homes for rent to people desiring an alternative to hotels, motels and resorts when vacationing. The entire transaction, from finding a property by looking at photos and descriptions posted by the property owner to paying the rental cost, is handled through the Airbnb website.

Traditionally, homeowners applying for loans to refinance their homes could run into underwriting problems if all or part of the reported income came from Airbnb rentals, but a new loan program has brought a change. A Fannie Mae pilot program now permits homeowners to use the rental income derived from a primary residence listed and rented on Airbnb to supplement a primary source of income when applying to refinance an existing residence.

Highlights of the Airbnb income program

The eligibility guidelines for the Fannie Mae program are relatively straightforward, including the following:

  • Refinancing a primary residence
  • A rental history with Airbnb of at least 12 months
  • Rental income must be documented by Airbnb

Borrowers with at least a 12-month history with Airbnb may use up to 75 percent of the rental income to qualify for financing. If a borrower has a long-term history with Airbnb, lenders will average 24 months of income as reflected on an income statement from Airbnb.

A benefit of the program is borrowers can save money with lower interest rates. Even though a borrower is using rental income to qualify for the loan, the property does not lose its status as a primary residence. The loan-to-value ratios and interest rates for loans to refinance a primary residence are more favorable than on homes classified as investment properties.

Mortgage Depot offers borrowers financing options

Borrowers concerned about qualifying for the Airbnb loan program through Fannie Mae or other types of financing should speak to one of our mortgage consultants at Mortgage Depot. For example, the Fannie Mae program requires documentation to prove a history of hosting on Airbnb. Renting all or part of a home through other methods might not offer the documentation needed to meet underwriting guidelines, but it could make a borrower eligible under other loan programs backed by Fannie Mae.

Contact us today

The mortgage professionals at Mortgage Depot put our experience in the mortgage industry to work finding the right loan program to meet the needs of each borrower. Contact us today at (800) 535-0720 to find out more about our services.

Contact us today at (800) 535-0270 or email us by clicking here.

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