It's the time of year when many people start planning to file their taxes.

As you start to get your paperwork organized, remember to double check the tax tips below from www.MortgageLoan.com.

2012 Mortgage Tax Planning Tips:

Paperwork to look for from your lender:

1. Whether you've done a mortgage refinance, or taken a second mortgage, your lender should send you a Form 1098 annually, which includes the amount of mortgage interest that you paid during the year. In most cases, that amount is tax-deductible.

2. You should also receive an annual escrow statement, indicating how much of your mortgage payments were used to cover expenses like homeowner's insurance and real estate taxes. Interest and taxes paid through your mortgage can add up to substantial tax savings.

More Deductions:

1. If you have a second mortgage on your property, such as a home equity loan or a home equity line of credit (HELOC), much of the interest paid on those loans can be deductible. Every dollar used to finance home improvement projects up to $100,000 may reduce your taxable income dollar for dollar.

2. If you purchased a home in 2011, any points paid by your seller and lender may likely be deductible for that calendar year.  If you paid points on your refinance then you may be able to take the points as a tax deduction but will have to write those off for the term of the mortgage. 

You’ll need to divide your point deductions by the length of your mortgage term in years. For example, a borrower with a 20-year mortgage loan gets to deduct 1/20 of the paid points every year, until the loan is paid off or refinanced.

Refinancing Tax Breaks:

1. Refinancing a loan with prepaid points presents a tax break that many homeowners don't know about. When you refinance mortgage, you may deduct the entire balance of the remaining points, and start counting years anew based on the points included in your refinanced loan. If you refinance a 30-year mortgage after four years, that's 26 years' worth of points deductions you can take all at once.

Also, if you have refinanced again due to the historically low rates, there may be an opportunity for you to "catch-up" on the deduction you made on first refinance.

Of course, when considering any of these strategies you'll want to consult with your tax professional. If in the event you don’t have a tax professional to rely on, please contact me for a recommendation.

Many homeowners have heard about a government program called “HARP 2.0″, but most do not yet realize how it may be able to help them.

HARP = Home Affordable Refinance Program.  Discover some of the frequently asked questions about this program below.

What is HARP 2.0?

According to www.makinghomeaffordable.gov, the official website of HARP:

“If you’re not behind on your mortgage payments but have been unable to get traditional refinancing because the value of your home has declined, you may be eligible to refinance through MHA’s Home Affordable Refinance Program (HARP).”

The program is intended to help borrowers who owe significantly more on their home than what it’s currently worth.

Who is eligible for the HARP program?

• You have a mortgage owned or guaranteed by Fannie Mae or Freddie Mac.
• You do not have an FHA, VA or USDA loan.
• You are current on your mortgage payments and have not been more than 30 days late making a payment over the last year.
• Have a first mortgage not exceeding 125 percent of the current market value of your home.
• The refinance will improve the long-term affordability or stability of your mortgage.
• You have the ability to make the new payments
• Effective March 2009 – June 30, 2012.

How do I know if Fannie Mae or Freddie Mac has my mortgage?

Fannie Mae and Freddie Mac have “lookup” forms on their respective websites. Check Fannie Mae’s first because Fannie Mae’s market share is larger. If no match is found, then check Freddie Mac. Your loan must appear on one of these two sites to be eligible for HARP, and should appear on one of these two lookups.

Am I eligible for the Home Affordable Refinance Program if I’m behind on my mortgage?

No. You must be current on your mortgage to refinance via HARP.

Do I have to HARP refinance with my current mortgage lender?

No, you can do a HARP refinance with any participating mortgage lender.

What are some of the other benefits or pitfalls to refinancing with the HARP program?

Because there are many more nuances to the HARP 2.0 program, we encourage you to give us a call at (508) 528-1800 or contact us using the form on this website. We’d be happy to talk you through all your options!

They're Back!!!   There's a steady stream of potential home buyers that are back... and more to follow.  Can you guess who they are?  Many of those homeowners from a few short years ago with a short sale, bankruptcy, or foreclosure are ready to purchase, again! 

Just because these prior homeowners have had a short sale, bankruptcy, or foreclosure doesn't mean they can't purchase a home ever again.  Quite the contrary. Believe it or not these are now viable home buyers and are ready to achieve the dream of home ownership for the second time. 

If we look back to 2007 when the housing troubles began we'll see a mass of potential buyers, many of whom are ready to receive financing again.  Not all will be viable borrowers today, but if they have regained control over their credit and have waited the required time-frame for the specific type of home financing then they now may be ripe to jump right back into the housing market.

Here are some of the timelines to note for Conventional, FHA and VA financing if a short sale, bankruptcy, or foreclosure is in the recent past:

CONVENTIONAL FINANCING

• Chapter 7 Bankruptcy:    Wait period of 4 years from discharge of bankruptcy
• Chapter 13 Bankruptcy:  Wait period of 2 years from discharge of bankruptcy
• Foreclosure:    Wait period of 7 years from completion date
• Short-Sale:    Wait period of 2 years from completion date

FHA FINANCING

• Chapter 7 Bankruptcy:    Wait period of 2 years from discharge date
• Chapter 13 Bankruptcy:    Wait period of 1 year from the payout date must elapse & performace of payments must be satisfactory.  The borrower must receive permission from the court to enter into a mortgage
• Foreclosure:    Wait period of 3 years from completion date
• Short-Sale:    Wait period of 1 year from completion date as long as at the time of the short-sale the borrower was current on the mortgage and all installment loans for the 12 month priod prior; wait period of 3 years from completion date if the borrower was in default at time of short-sale

VA FINANCING

• Chapter 7 Bankruptcy:    Wait period of 2 years from discharge date
• Chapter 13 bankruptcy:    Wait period of 1 year from the payout date must elapse & performance of payment myst be satisfactory.  The borrower must receive permission from the court to enter into a mortgage
• Foreclosure:    Wait period of 2 years from completion date
• Short-Sale:    Wait period of 2 years from completion date

Please also note that you may likely be involved with a seller who is presently experiencing a bankruptcy or short-sale.  If that is the case then here's a tip...  If you truly care about them then stay in touch and help where you can through these tough times.   If you genuinely care about their well being then they may very well likely return as a viable home buyer someday.

Getting Back to Fundamentals!

If your businees is not where you want it to be then what are you doing about it? 

I speak with many agents who are continually looking for that "magic pill" in order to help their buisness.  They're always trying new things; hopping on the latest database, buying the latest software, subscribing to various email or newsletter campaigns, etc.  And while some are successful with these additions it seems that there are many that are so busy trying new things that they can't get out of their own way.

The result... they are no better off than they were before the new database or the newsletters or the technology.  Even worse, they debunk the services and products they purchased!  Not because what they bought didn't work, but because they didn't devote the time and effort needed to really implement these additions to their business.

What ever happened to getting back to the fundamentals?  What was it that actually let us become successful?  If you look back at your career you will probably see that you did certain things the same way over and over and over again at the beginning.  You may have tweaked this and that along the way but for the most part I'll bet that you were habitual with most of your business efforts.

And, along the way you probably discovered things that you implemented into your business model that you were able to devote enough time with so that it actually helped- and once mastered, also became part of your business practice.  So in essence, you created new fundamentals to work with.

Business for many was down last year and often when this happens the search for the "magic pill" intensifies.  But I'm 100% convinced that the magic pill is not something that can be purchased but rather something we already have and just don't realize.  It's our experience.  It's our effort.  It's our focus and determination.  Ultimately, it's the fundamentals.  It's what we did to start in this business of sales and become successful.    

Go back in time to your first years in sales, when you were energized and focused and did all of the things necessary to get business.  Heck, I'd even bet you picked up the phone a few times to make some proactive, outbound calls...   Hey, now THAT's and idea!

There's An Amazing Story To Hear, When You Decide To Call

There's an amazing story to hear when you decide to call.  Can you say "call reluctance?"   Yup, that's me.  But the most amazing things will happen to you WHEN you do it. 

I've been in mortgage banking for over 22 years and for over ten years now I've been working with a coach.  And, more times than not we talk about reaching out to our current and past client base.  Like many in sales I have call reluctance and he knows that.  But time and time again, when I commit to contacting just three clients a day, I find out the most incredible things. 

For instance, I recently contacted a client last and ended up leaving a voice message... and I never heard back (yes, that can happen too).  Another call was placed and the client and I ended up just catching up a bit and realized that she had two more children since we last spoke.  What an eye opener- even if they were Irish twins it's apparent that it's been a long time since we made contact... shame on me.  Another client contact introduced me to his brother-in-law who is moving to the Boston area this fall.  Call it timing or luck but another relationship was made (score one for the good guys). 

And then just yesterday, I spoke with another past client.  We were talking about refinancing and also catching up on life since we last spoke and she told me about her husband.   He's been in the hospital for several months waiting for a lung transplant. 

I was simply speechless.  It brought thoughts into my head about my wife and children, my parents and sisters and brothers, and nieces and nephews and aunts and uncles...  It was a heartbreaking story with hope and frustration and sadness, and all very real. 

This call hit me deep.  And it brought me back to what's most important in my life and helped me realized why I do what I do.  Being in sales we can often get sidetracked and forget the important things in life.  My profession, our profession - sales, is making lifelong relationships.  But the truth of the matter is that you don't know what you're missing until you call. 

If you are not making those contacts then just do it because truthfully, you have nothing to lose and everything to gain~

Life AFTER The First Time Buyer Tax Credit!

So what will life look like after the first time buyer tax credit?   Well, we're here, right?   Do real estate sales stop because the $8,000 credit is gone?    It shouldn't.  And if buyers understood the real impact of the current interest rates then people would not just be running, but sprinting, to buy houses now.

The $8,000 incentive was a good motivator for some people to buy a home.  And the $6,500 move-up credit was seen the same.  But the fact that rates are at historic lows should be incentive enough to pull the trigger and buy a home today.   Potential homebuyers need to understand very simple math.

It all falls to the rates.  Rates are low now because of a few factors; our government intervention (that has already passed), and temporary economic issue in Greece and a few Western European countries.  These problems will eventually dissipate and rates will increase.  A half a year from now...   two and a half years from now...   who knows when, but at some point rates will increase.   

Look at a $275,000 loan at 4.5% for 30 years.  Principal and interest on this is $1,393.34 per month.  When rates go to 6% (and at some point they will), the same loan amount will cost $1,648.76 per month.  Simple math shows that there is a $255.42 higher payment per month.  Believe it or not, you'll likely have a few buyers that will tell you "so what."  Either they don't get it or they don't care.  Not everyone understands that this means real money! 

Over the life of the loan the difference equates to $91,952.62 IN REAL SAVINGS!   This could also be seen as a monthly car payment, a college tuition payment, money that can be used for investing...  Can you imagine putting an additional $255 in your portfolio every month?  With compounding interest these funds alone would be a very healthy cushion for anyone's retirement.

But think for a minute what this can do for buying power.  The additional savings of $255 per month means borrowers can finance an additional $50,000 in today's rates vs. after rates increase!   I may not be the smartest guy in town but when I have the potential to finance $50k more now than in the future, then that's a good thing, right?   Couple the low rates with the great real estate values, this makes NOW the best time to buy a home in over 40 years! 

It's time to spread the word and let every one of our clients understand that the $8,000 or $6,500 tax credits are merely a drop in the bucket compared to the savings of buying now vs. later! 

You did WHAT?  "While you're in the middle of buying a home you did what?"  

In 22 years of mortgage banking you would think that I would be surprised at how often something like this happens.  It doesn't happen often but it happens and it never ceases to amaze me what people simply "forget" to mention.  I received two calls just like this over the past month and a half, "Mike, I know we're closing in a few weeks but i'm starting my new job next week.  Do you need anything from me on this?"  Aye Caramba!

Maybe our lives are too busy and fragmented to just stop and think, (I know that I can be guilty of this on occasion).  But, its common sense that during a time when you are making one of the largest financial investments in your lifetime, A JOB CHANGE could adversely impact your loan!   This is not to say that if an opportunity presents itself that you should not take it.  But please don't tell your lender after you started your loan,  "Oh, by the way..."

Along the same lines, there are other NO NO's that come to mind when in the middle of buying a home.  For starters, DON'T OPEN UP ANY NEW CREDIT.  No store charges, new credit offers with low teaser rates, credit card swapping (exchanging a low rate credit card for your present card with a higher rate), nothing.  Any new debt could potentially be detrimental to the loan you have in process.  Why?

With the new Fannie Mae guidelines effective June 1, 2010, lenders are NOW REQUIRED to pull credit just prior to closing.  Any new debts or even credit inquiries will have to be evaluated and considered in the borrower's qualifying.  This could be a show stopper for closings at the 11^th hour!

We've all seen buyers going to the furniture store 2-3 weeks before closing and finance the new living room, bedroom set, etc.  With the new rules of re-running credit just before closing, the new debt could so severely impact the borrower's qualifying that, in the eyes of the lender, the buyer can no longer afford the mortgage.   

I encourage you to take this advice when applying for a home loan...  Until your closing it's best to do nothing.  Don't open any new credit or even allow a credit check.  Don't change jobs if it is not absolutely necessary.  Don't comingle money from dear Aunt Ethel that wants to help you out.  Don't go trading in that clunker for a new car if there is financing involved. 

However, there are circumstances that will arise where someone will have to open a charge account, move some money, or, even buy a new car while the loan is in process.  In any of these events, please consult with your loan professional prior to taking any action.  A little bit of guidance from someone with experience can make all the difference in the world and lead you to a successful closing.

What To Expect When You're Expecting... A Closing!

The end of June marks the end of the First Time Homebuyer Tax Credit... SO WE THOUGHT!

It appears as though congress is proposing extending out closing timeframes for the tax credit as long as contracts were signed by April.  This has not been voted on yet but from what we are hearing on Capital Hill the closing extension is likely.  We will certainly keep you posted on this as we hear any developments.  However, Don't Expect The Extension!  Be safe and prepare to close on time as we simply can't count on the extension, regardless of how much we believe this will pass. 

From the information I have gathered via informal polls, the end of this month will probably be one of the largest funding months in history. What does this mean for you??? 

Be proactive!  Follow up and follow up early!  Communicate regularly with the lender(s) on your transaction(s) in order to minimize any potential fallout.  Of course it's the lender's job to make sure closings happen on time but this is not the time to let things "slip through the cracks," as the ramifications will be very costly to your borrowers and perhaps, sellers too.  I realize that this is not your job but sometimes the environment calls for a change in the way you normally work.  No one ever wants to close late or ugly.  And mortgage processors and underwriters are human.  Mistakes can happen and things can be missed.  It's time now to help minimize anything that can potentially get in the way for your closing(s).

We have taken the necessary steps several weeks ago to perform a "triage" on expected loans closing this month and have been more proactive than ever in anticipation of the sizable volume closing this month.  Please keep in mind that not all lenders have taken these steps and may not have the capacity to do so.  It's up to you to become more involved than ever before.  If you are not receiving clear and effective communication from your lender/loan officer then be diligent and persistent to help them discover any potential loose ends...  and I mean ANY loose ends!

If a title commitment is not in, if the insurance binder has not been received, if the earnest money deposit is not verified...  the smallest detail missed could potentially put your closing(s) at risk.  As hard as the mortgage industry is trying to accommodate all of the anticipated purchase closings, things just happen and no one wants to be on the receiving end of that 11^th hour call. 

Remember, your help and involvement will greatly reduce the chances of a missed closing.  As of right now the stakes are too high for something to slip through and with only a little effort you can help keep closings on track. 

Michael Dunsky

Vice President of Mortgage Lending

Guaranteed Rate, Inc

38 Pond Street, Suite 208

Franklin, MA 02038

If The Phone Doesn't Ring It's Me

If the phone doesn't ring it's me!   Written by Jimmy Buffet, Will Jennings, and Jimmy Utley,  this song has absolutely nothing to do with sales but the title sure does.   When I first heard this song I realized that the title summed up my biggest fears - no calls.  And no calls equals no business.   Maybe I'll re-title the song, "If the phone doesn't ring, it's my client."

I can't be the only one out there thinking this so whether you're a loan officer, a real estate agent, an insurance broker, etc., it doesn't matter.  We all have our professions but our number one job, our number one priority, is to make the phones ring.  It's only after the phone rings do we get to do practice our professions and write a mortgage, list a house, or write someone an insurance policy.

At the beginning of my career I believed that if I were the most knowledgeable loan officer  with the best technology and knows the investor  and underwriting guidelines inside and out, then by virtue of the time that I put into being a true student of the industry I would be the very best and my sales would surely skyrocket. 

There is some truth to knowing your business inside and out.  However, as a premise for increasing sales, it's not about what you know, it's more like who you know and what you are doing about getting in their face- figuratively and literally. Boiled down, it's all about building relationships.  It's as simple as that- right?. 

Sales isn't rocket science.  This is not a derogatory comment towards any of us but we all know individuals that we see in our respective fields and scratch our heads asking ourselves how they get out of their own way.  As a matter of fact, I don't consider myself the smartest guy in the world but I've worked alongside of some individuals that are truly dumb as rocks.  I'm not passing judgment here- but I truly don't know how they drive to work some days without getting lost.  Yet, somehow a few of these individuals seem to be able to make the phones ring.

And what is it that they are doing different from you or your colleague in the same office?  They have found what I call their "relationship building" strength and they are maximizing this, over and over, and over again.  They are using what they know makes the phones ring and continually driving in business. 

Have you given much thought to what your "relationship building" strength is?  Do you know what works best for you?  Go maximize your strength.  And remember, you have control over getting your own phone to ring.    

Michael Dunsky

Vice President of Mortgage Lending

Guaranteed Rate, Inc

38 Pond Street, Suite 208

Franklin, MA 02038

508.528.1800 x1 direct

michael.dunsky@guaranteedrate.com