MCC Tax Credit

Mortgage Credit Certificates Are Not Mortgages
   
 An MCC is a tax
credit which means fewer tax dollars can be withheld from your regular paycheck,
increasing your take-home pay.  The lender can use the credit to help increase
your buying power up to an additional 10%.

MORTGAGE CREDIT CERTIFICATE ELIGIBILITY
REQUIREMENTS

Available With New Purchase Loans

Must Be First Time Home Buyer (Not Owned A
Home In Previous 3 Years) Unless Purchasing In A
Targeted Area

Recapture Tax Applies

Income and Acquisition Limits Based On Family Size

Owner Occupied

WSHFC Home Buyer Education Required

Must Work With WSHFC MCC Participating Lender

Cost is $657.50

Can Be Renewed On A Refinance for $375.00 Fee

FHA Can Be Used As A Deduction From Monthly
Payment Qualifying For More Home

FNMA/VA/USDA Used As Income To Qualify For More
Home

Recapture Tax:

** Applies to the WSHFC Mortgage Credit Certificate program
only

Recapture only applies if all 3 of the following occur:

Your home is sold or disposed of within 9 years of
being purchased, for reasons other than your
death;

There is a capital gain on the sale of your home,
AND

Your household income for the year in which you
sell your home exceeds federal recapture tax
limits. See your lender for current limits.

Happy Investing!

Today's blog courtesy of Cheryl Taylor, American Pacific Mortgage

New Lending Requirement

1. WHO PREPARES THE CLOSING DISCLOSURE?

The new CFPB rule provides that the creditor is ultimately responsible for preparation of the Closing Disclosure.  However, the rule also allows the creditor to delegate some or all of the preparation to the settlement agent.  Determining which system will create the final form is important in establishing workflows for the transfer of information.

2. WHO, WHEN AND HOW MUST THE CLOSING DISCLOSURE BE DELIVERED TO THE CONSUMER?

Generally, the creditor is responsible for delivery of the Closing Disclosure form no later than three business days before consummation.  Creditors may also contract with settlement agents to have the settlement agent provide the Closing Disclosure to consumers on the creditor's behalf.

To ensure the consumer receives the Closing Disclosure on time, creditors must arrange for delivery as follows:

*By providing it to the consumer in person
*By mailing, or by other delivery methods, including email. Creditors may use electronic delivery methods subject to compliance with the consumer consent and other applicable provision of the Electronic Signatures in Global and National Commerce Act.
*Creditors must ensure that the consumer receives the Closing Disclosure at least three business days prior to consummation even if the settlement agent was to deliver the form.

3. WHAT CLOSING DISCLOSURE DELIVERY TIMING PERIOD SHOULD YOU KNOW?

As part of the final rule creating the new forms, the CFPB determined that consumers would be better served by having a short time to review the new Closing Disclosure prior to signing their loan documents.  As a result, in its rule CFPB mandated consumers have three business days after receipt of the Closing Disclosure to review the form and its contents.

However, the three business day review period starts upon "receipt" of the form by the consumer.  Unless some positive confirmation of the receipt of the form (i.e. hand delivery), the form is "deemed received" three business days after the delivery process is started (i.e. mailing).  As a result, the combination of the "delivery time period" and the "review time period" results in six business days from mailing to loan signing.

6 Things To Know Before You Buy

6 Things You Must Know Before Obtaining a Mortgage

Before you commit your hard earned dollars to monthly mortgage payments, consider these 6 issues. Effective consideration of these important areas can make your payments work much harder for you.

❶ You can, and should, get preapproved for a mortgage before you go looking for a home.
Preapproval is easy, and can give you complete peace-of-mind when shopping for your home. Your local lending institution can provide you with written preapproval for you at no cost and no obligation, and it can all be done quite easily over-the-phone. More than just a verbal approval from your lending institution, a written preapproval is as good as money in the bank. It entails a completed credit application, and a certificate which guarantees you a mortgage to the specified
level when you find the home you’re looking for.

❷ Know what monthly dollar amount you feel comfortable committing to.
When you discuss mortgage preapproval with your lending institution, find out what level you qualify for, but also pre-assess for yourself what monthly dollar amount you feel comfortable committing to. Your situation may give you a preapproval amount that is higher (or lower) than the amount of money you would want to pay out each
month. By working back and forth with your lending institution to determine what this monthly amount is, and what value of home this translates into at today’s rates, you won’t waste time looking at homes that are not in your price range.

❸ You should be thinking about your long term goals, and expected situation, to determine the type of mortgage that will best suit your needs.
There are a number of questions you should be asking yourself before you commit to a certain type of mortgage. How long do you think you will own this home? What direction are interest rates going in, and how quickly? Is your income expected to change (up or down) in the near term, impacting how much money you can afford to pay to your mortgage? The answers to these and other questions will help you determine the most appropriate mortgage you should be seeking.

❹ Make sure you understand what prepayment privileges and payment frequency options are available to you.

More frequent payments (for example weekly or biweekly) can literally shave years off your mortgage. Simply by structuring your payments so that they come out more frequently, will significantly lessen the amount of interest that you will be charged over the term.

For the same reason, authorized prepayment of a certain percentage of your mortgage, or an increase in the amount you pay monthly, will have a major impact on the number of years you will have to pay and could shorten your payment term considerably. These two payment options can cut years off your mortgage, and save you thousands of dollars in interest. However, not every mortgage has these prepayment privileges built in, so make sure you ask the proper questions.

❺ Ask if your mortgage is both portable and/or assumable.
A portable mortgage, where available, is one that you can carry with you when you buy your next home and avoid paying any discharge penalties. This means that you will not have to go through the entire mortgage process again unless you are making a
move up to a much more expensive home.

An assumable mortgage is one that the buyer for your home can take over when you move to your next home. This can be a very powerful tool at the negotiating table making it much easier and more desirable for a buyer to buy your home, and again saves you any discharge penalties.

❻ You should seriously consider dealing with a Mortgage Expert.
Consider dealing only with a professional who specializes in mortgages. Enlisting their services can make a significant difference in the cost and effectivness of the mortgage you obtain. For example they can make the process faster thereby avoiding
costly delays. Typically there is no cost or obligation to enquire.