What home buyers and homeowners can expect as a result of the new tax bill

For more than 20 years, Guarantee Mortgage has been helping families navigate the financing of real estate in the Bay Area. That navigation got a little more complex when the Tax Cuts and Jobs Act was signed into law in December, but Guarantee Mortgage is here to provide clarity. The bill impacts homeowners and home buyers as it changes the credits and deductions available in 2018. For example, mortgage interest deductions will be reduced from $1 million to $750,000 for purchases made after Dec. 16, 2017. The refinance of a home that was purchased prior to Dec. 16, 2017 may be able to have a grandfathered deduction limit, however. Property, state and local income taxes will have a $10,000 combined deduction limit, but this precludes 2018 state and local income taxes if prepaid in 2017. Another change is that mortgage interest on a second home is part of the combined total limit of $750,000. If the interest paid on the two properties exceeds that amount in 2018, it will not be deductible. (A rented second home is not subject to these changes.) Interest on home-equity loans will only be deductible if the loan was used to substantially improve a residence in a documented manner. This will require a tax professional’s assistance to navigate. And good news for Mortgage Credit Certificate holders – this bill retains the MCC option. If you aren’t familiar, an MCC allows homebuyers to write off 20 percent of their mortgage interest paid annually. This forecasted savings can – in some situations – be applied to available income when applying for a home loan, and allows the buyer to get a larger loan amount. The exclusion of the gain on sale of […]

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As Bay Area home prices continue to increase, Jumbo Loans become more prevalent!

The trend continues – Bay Area home prices are on the rise. The median price in October was $765,000, an increase of 10.9 percent from a year prior, according to the San Francisco Chronicle. That number also was more than a 2 percent increase just from September of this year. While this remains great news for sellers, some buyers may be feeling as though homes are inching out of their reach. Fortunately Guarantee Mortgage offers a variety of a competitive Home Mortgage options to fit your home buying needs. Having served Bay Area homebuyers for decades, Guarantee Mortgage offers Jumbo Loans to help consumers reach their homeownership dreams even as prices continue to climb. A Jumbo Loan, also known as a non-conforming loan, portfolio loan, or non-agency loan, describes a mortgage loan exceeding the conforming loan limits set by Freddie Mac and Fannie Mae. In some areas, like the San Francisco Bay Area, the conforming loan limit varies by county and can range from $453,100 to $679,500 due to be located in a high cost area. Essentially, if your desired loan amount exceeds set conforming limits above, a Jumbo Loan will cover the full amount needed for the Purchase or Refinance of your home. Here are some of the characteristics of a Jumbo Loan. Interest rates for a Jumbo mortgage tend to be slightly higher than those for a conforming loan, depending on market conditions. Available in both fixed and adjustable rate terms. Fixed options include 30, 20 and 15-year terms. ARM options include a fixed period of 5, 7 or 10 years that roll to annual adjustable. Jumbo Loans tend to have higher down payments and cash reserve requirements, depending on lender guidelines. Financing […]

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Guarantee Mortgage offers advice for those rebuilding following California wildfires

The loss of life and property of unimaginable proportions struck so many communities in our area in recent weeks due to wildfires. Our hearts go out to everyone impacted by this tragedy. As families and communities begin to rebuild and restore their lives, Guarantee Mortgage wants to offer its encouragement and support. We truly hope to lend a helping hand to our friends in the North Bay communities affected by the fires. We’ve put together some information that may provide guidance and hope during this difficult time. If your home was fully or partially destroyed, you probably already contacted your insurance company or agent. Here’s a friendly reminder to touch base with the company again and get in contact with your mortgage servicer as well. Also, continue to make your monthly mortgage payments. These steps are vitally important as you move forward. With that in mind, you may be wondering what a typical process for handling insurance claims is. Please understand that it may vary by servicer. However, here is a checklist of what you could expect during this process: Give the insurance adjustor’s report to your servicer. Provide a repairs or construction estimate. A licensed, experienced and qualified contractor should be used by the borrower. Insurance claim checks should be paid to the mortgage company and borrowers. Property inspections may be required by the servicer during the process. A final inspection should be expected. In order to release the final disbursement and finalize the claim, a final lien waiver will be required. It’s too early to tell what kind of immediate impact the fires will have on home prices and sales in the North Bay. Some residents who plan to rebuild, a process which […]

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As Bay Area market continues to sizzle, Guarantee Mortgage offers programs to meet buyer demands

San Francisco and two neighboring Bay Area cities (Vallejo and San Jose) recently ranked as the top three hottest markets in the United States for the month of August. California, in fact, is home to 10 of the top 20 most prosperous markets, according to an analysis by realtor.com. Home prices remained at historic highs, while homes came off the market at a faster pace than last year. The lack of inventory is labeled as a contributing factor to quick sales and increasing prices. Shrinking inventory has also led to a drop in overall sales in the Bay Area, while prices continue to climb, according to The Mercury News. Year-to-year, prices are up by more than 10 percent, putting the usual cost of a single-family home at $804,000. As a consequence, current homeowners may feel uneasy about selling their home and moving to another Bay Area neighborhood, where bungalows of 1,000-square-foot are going for over seven figures, according to The Mercury News. Low inventory compounds the concern shared by some families that landing another Bay Area home is an uphill battle. Guarantee Mortgage has a solution. People wishing to buy in the Bay Area can maximize their dollar and get into their dream home with one of our signature High Balance and Jumbo Loan Solutions programs. These two loans help expand our clients’ options, particularly when the balance exceeds the conforming loan and conforming high-balance loan limits, or when they have less than 20 percent for a down payment. The conforming loan limit for a single-family home is generally $424,100, but can be as high as $636,150 in certain high-cost areas. The program allows for a loan to be split between a first and second mortgage, […]

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Loan program opens doors for high-asset applicants with irregular income

Various factors determine a homebuyer’s eligibility to secure a mortgage loan. For some, obstacles may include unestablished credit, an inability to provide a high enough down payment or an unfavorable debt-to-credit ratio, just to name a few. Even those who have a high net worth and assets may encounter difficulties during the mortgage application process. This can be a problem for many buyers in the Bay Area. Professionals who rely on freelancing or consulting for their income, for example, may find it difficult to land a loan as a result of their unconventional monthly income. Here at Guarantee Mortgage, we understand the ever-changing economy and workforce. That is why we offer our clients the opportunity to qualify for a loan even if they are in a unique financial situation with our Asset Inclusion Home Loan Program. With this program, applicants may not be disqualified for a loan because of unsteady income. If an applicant has the correct amount of assets, the program is tailored-made for them because the buyer can factor in their remaining assets as part of the application. Remaining assets are those that are available after the down payment and closing costs are subtracted from the applicant’s fund. In effect, the remaining balance of assets acts as qualifying income. Guarantee Mortgage will use a formula to establish a percentage of the assets left and when divided by the period of the loan, it can then be used as monthly income or qualifier for the mortgage loan. The level of assets will be the determining factor for how much of a loan an applicant will qualify for. Other qualifications may include, but are not limited to, up to 80 percent Loan-to-Value, escrow account requirement […]

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