Is PMI Tax Deductible in 2017
This is certainly not a take-it-for-granted deduction.
Is PMI a tax-deductible expense? The 2016 IRS guide states the following: If your adjusted gross income on Form 1040 line 38, is more than $100,000 ($50,000 if your filing status is married filing separately), the amount of your mortgage insurance premiums that are otherwise deductible is reduced and may be eliminated. If your adjusted gross income is more than $109,000 (54,500 if married filing separately) you cannot deduct your mortgage insurance premiums.
2017 Expanded County Loan Limits
These programs all can allow up to 95% financing with or without PMI payments.
Check out this stimulus package available immediately:
Essex County: Purchase for $629,400 with 5% down
Middlesex, Norfolk, Plymouth, Rockingham (NH) , Strafford (NH) follow suit.
Nantucket and Dukes County $669,600 purchase price with 5% down.
These limits per Fannie Mae and Freddie Mac. Also referred to as Agency Jumbo.
Available for First Time Home Buyers for use as purchase. Also for Refinance.
Jumbo Financing to 90%
10% Down-payment Jumbo financing is available through GoldCoast
Our programs have both MI (Mortgage Insurance) and No-MI options meeting. As with any higher Loan-to-Value products these programs represent higher risks and consequently higher costs (rate). Pros and cons should be analyzed and considered. We are always grateful for the opportunity to consult with our clients on potential financing for their new home. We are (typically) available outside of normal business hours to assist with your knowledge seeking and interest to learn more about how these programs operate.
We arrange jumbo mortgages in the great Boston area as well as all counties in Massachusetts, New Hampshire and Maine, including Nantucket and Martha's Vineyard. We specialize in working with Family Offices, Wealth Managers, Accountants, CPA's, and Attorney's on behalf of their clients needs.
67 year Journey to Homeownership
A True Story of Endurance towards a Lifetime Goal
The first time I met Lou he arrived at my office out-of-breath having run from the car to avoid being late for our meeting. I sensed the passion in his goal of owning a home. He talked, I listened, and together we plotted a course.
Without much cash on hand a VA mortgage was a very logical product; decades prior Lou had been told he was ineligible for a Veteran's Admiration (VA) mortgage and he shared that burden with me. Lou passed me a copy of his DD Form 214 (DD214).
We examined credit, employment and income, all of which were factors that led later into of dozens of hours of discussion, research and project management. We wrapped up our meeting. By the time Lou drove home there was a “Certificate of Eligibility” in the Federal Mail to his apartment. This entitled him for 100% financing, subject to income and credit and property criteria.
What I learned about Lou was that he was a ruthless executor of tasks and his follow through was bullet-proof. I assigned credit tasks and he came completed. I asked for documentation and paper work and he delivered it, in hand, often the same day.
It was a full year plus journey for Lou to become a homeowner. Paths became obscured and we were met with seemingly insurmountable problems. Lou called me distraught when he received an eviction notice. The rent he had been paying was going to a landlord who had been foreclosed upon and no longer owned the 3 family. The Big American Bank wanted Lou’s apartment back and they had set a court date. This most likely meant Game-Over as first, last, and security deposit for a short term rental had not been budgeted for. Attorney Sean Keough stepped forward to represent Lou “pro bono” and the judge granted Atty. Keough and Lou 60 days of continued residency which gave us the reprieve necessary to complete all the pre-buying tasks.
Time to shop. With a VA Prequalification in hand Lou engaged a Realtor and began house shopping. The dream house came into focus on the 3rd stop. We won’t get into the first two houses, but let’s just say they weren’t “homes”. But we know that this house fulfilled every dream of home ownership that Lou ever had. Congratulations Lou and thank you for your service to our Nation.
Dangers of FSBO (For Sale by Owner)
A True Story of Financial Calamity Avoided
Buying and financing real estate is not always the best move. A faulty decision can delay retirement and cause significant erosion of personal and household net worth.
The success of a home purchase and the performance of that asset is directly related to the team that you hire to provide professional services. How confident are you that they have your back? Please read this emotionally charged client note. I’ve removed identifying info but left intact the text and syntax.
We officially withdrew from XX ____ St. in Wenham. We were extremely upset to find out that we were basically hoodwinked by this guy... Less upset now than furious actually. The DEP called me back yesterday and the file has not even been reviewed yet. So we could have unknowingly purchased the property and been liable if they find a problem when they review it in two years. This is 100% not how it was presented to us and I am embarrassed we didn't see through this.
So thank you very much for the advice, you could have saved us hundreds of thousands of dollars.
The depressing this is that we still have nowhere to live and no viable options. Have seen seven properties in the last two days.
Praying for the strong September market. Thanks, ____
As an epilogue I note that this property is still FSBO. Our client family nestled into the home of their dreams with the aid of a well-respected Realtor team.
Pros and Cons of a Piggy Back mortgage, AKA Hybrid
Every offering has strengths and weaknesses
80 / 10 / 10 mortgage applications refer to the Loan-to-value / Combined Loan-to-Value / and required equity down-payment. These mortgage applications may be used to circumvent the need for monthly PMI or to achieve higher borrowed amounts than county Conforming Loan Limits will allow. On face value a lower monthly payment may seem alluring, but please proceed with caution as Hybrid mortgages may have other long terms costs. While we offer these programs we always thoroughly consult with out clients on the options and detail the potentials.
South Boston, MA
Commercial Construction Financing
Our sibling company, GoldCoast Commercial Mortgage, LLC (www.GoldCoastCM.com) recently arranged financing on a 32 unit condominium construction project at 30 B Street in South Boston, MA with gross projected sales exceeding $20 million.
The project includes the demolition of three existing structures and the construction of a five story building what will house 32 contemporary condominium units and 33 parking spaces.
GoldCoast Commercial Mortgage, LLC was co-founded by Stephen Smeke and John Donlon with the purpose of bringing a more efficient process to clients seeking competitive financing in the small balance and middle markets.
Bi-Weekly Payment Plan
V a l u a b l e F i n a n c i a l T o o l o r S c a m?
Before I answer that question it is useful to know how a Bi-Weekly Payment Plan (BWPP) works. The program base is contained in the difference between “Every-other-week” and “Twice-a-month”. Half payments made every other week add up to 13 full payments (26pays/2). If you paid your mortgage twice a month it would be a traditional 12 full payments (24pays/2).
The BWPP misconception is that the principal is applied with each half payment, it isn’t.
The BWPP now becomes a basic tool for overpaying your mortgage. Overpaying your mortgage is a complicated irreversible action that should NOT be done to the detriment of: rising credit card balances; ballooning HELOC’s, underfunded retirement planning, or educational goals. Seek competent guidance on this topic through your CPA and wealth manager.
Leading up to my answer please consider the following: BWPP does NOT magically re-amortize you mortgage every fortnight. It does not and CANNOT alter the terms of your mortgage contract.
Conditions of BWPP could include:
・ A setup fee (in the hundreds of dollars)
・ A transaction fee (cumulatively in the thousands of dollars)
・ The 3rd party servicer will need access to your check book
・ Payments will inevitable draft (now AHEAD of your typical schedule) on esoteric dates like the 5th of May, Friday the 13th, Superbowl Sunday,
and Leap Day.
・ Consider the “Blue Moon Effect”: If your first payment is drafted on the 1st, 2nd or 3rd of the month it is very likely that you will have 3 mortgage
payments drafted that month.
So is it a scam?
If a product or service is designed solely for the benefit of the vendor and nothing is done to dispel “perceived benefits” which are false (re-applying principal every two weeks) and the ENTIRE service can be performed by the consumer free of charge, is that a scam? You decide.
New Loan Limits and Fannie Mae Guidelines for Massachusetts
Written by Jeff Rolke - January 25, 2016
The next 30 days will contain some major changes for Massachusetts real estate, particularly for clients who are in the $500,000+ price range.
The loan limits for a high balance mortgages in Essex, Middlesex, Norfolk, Plymouth, Rockingham and Strafford Counties will increase from $517,500 to $523,250. This will benefit clients who are shopping along the line of Agency High Balance and Jumbo mortgage products.
Compounding this change, on December 12, 2015 Fannie Mae will raise the Loan-to-Value Standards on a High Balance Mortgage to 95% LTV (up from 90%).
What this means to you and your clients: Starting in January, with a purchase price of up to $549,000, the client can put as little as 5% down and enjoy the more desirable terms of a High Balance loan. Currently this loan would require 10% down payment and is subject to the lower loan limits.
Agency Jumbo AKA FNMA and FHLMC High Balance mortgages offer lower interest rates than a traditional jumbo.
(old limits - Before 12/2015)
Observe these often overlooked county limits:
County Single Family Duplex 3Unit 4unit
Dukes County $625,000 $800,775 $967,950 $1,202,925
Essex County $517,500 $662,500 $800,800 $995,200
Middlesex County $517,500 $662,500 $800,800 $995,200
Nantucket County $625,000 $800,775 $967,950 $1,202,925
Norfolk County $517,500 $662,500 $800,800 $995,200
Suffolk County $517,500 $662,500 $800,800 $995,200
Plymouth County $517,500 $662,500 $800,800 $995,200
This small seemingly innocent action can jeopardize your home buying experience.
Buyers wielding a 800+ FICO, twenty-percent down-payment, and powerful incomes are still vulnerable to this small initiative that's worked its way into the most utilized mortgage decision making algorithm in the world.
Most brokers, lenders, banks and credit unions utilize the services of either Fannie Mae's Desktop Underwriter or Freddie Mac's Loan Prospector for their guidance on backing or securing a mortgage application.
These systems known by their trade acronyms as DU and LP are statistically accurate and very finely tuned meters in assessing the likelihood of how a mortgage will perform in the future. The programs use hundreds of attributes to weigh strengths and weaknesses of a mortgage application and offer guidance in assessing risk.
Common attributes considered are:
- Debt to Income ratio
- Previous payment history on housing debt
- Purpose of the loan
- Amounts in savings (also called "reserves")
There is a little know "sleeper" in the process with can bring the entire home buying experience to a grinding halt. Some attributes are forgiving. For instance you can overpower some obstacle by increasing your down-payment (equity). Some Debt-to-Income ratio issues can be addressed by paying off debt at or before closing.
But one seemingly benign action could prove to be the ultimate Deposit-Grabbing, Moving-Van-Driver-Irate-Maker, Realtor tweaking, non-reversible action that you never saw coming ... even with all the First-Time-Home-Buying classes.
Behold the "Disputed" Credit Item".
In existence for decades, the Disputed Credit Item has never been treated with much regard. After all, it's neither right nor wrong. It's disputed. It's neutral. it neither helps nor hurts.
Behemoth Bank error? Or Consumer oversight?
DU and LP take a grown up parental stance on this now - refusing to get involved. They isolate the dispute and identify it as neutral. But before they endorse the file (read: underwriting delay) they'll want the in-fighting solved. As in concluded.
One party must admit error or retract the dispute. Without doing so the process halts. With no workaround. Sound like an easy fix? Think about a Dispute on a credit trade for a company that is no longer operational. Credit bureaus while massively efficient in scale and also leaders in technology can be laboriously sloth like to fix a problem on a consumer account to which there are no means to track down the source.
Think twice about filing any Disputes as they can take on a life of their own. I write this with the utmost sincerity: Sometimes the Dispute is worse that the item you are disputing.
Prior to co-founding GoldCoast, John Donlon was a project manager for Equifax. His time spent at the bureau was very educational and insightful. Saving his borrowers heartache and costly problems is a top priority for him and GoldCoast Mortgage. Buying a home? Write to him for a list of $100,000 real estate mistakes that he has witnessed many times over.