Month: October 2014

IRA Withdrawal for Home Purchase

IRA’s consist of two types- Traditional and Roth. Funds contributed to traditional IRAs are “before-tax” contributions because they are made and, thus, lower taxable income and tax liability.
However, when traditional IRA funds are withdrawn (and not rolled over to another pension- type account), the funds are fully taxable regardless of the age or other circumstances of the taxpayer.

If the IRA is Roth, IRA withdrawal for home purchase of up to $10,000 for a “first home” are completely free of tax and penalty (as long as the funds have been in the IRA for five years or more).

The 1997 Taxpayer Relief Act changed some IRA rules to allow certain types of IRA withdrawals early, without penalty, in some circumstances.

The rules for taking a distribution from a Roth IRA to finance a first time home purchase are slightly different than those for a traditional IRA.  The law defines a ‘first time home buyer” as someone who has not owned for 2 years. So the law helps even newer home buyers.

If you are a first time homebuyer and you meet the Roth IRA rules as a qualified distribution (after the account has been open for 5 yrs)you can withdraw $10,000 or less to purchase a home (if the funds are used directly toward the home acquisition-which includes down payment, closing costs, etc).

If the withdrawal counts as a qualified distribution you will avoid paying income taxes and early withdrawal fees. If you are married, and you and your spouse are first time homebuyers, you can each pull from retirement accounts, giving you $20,000 to use for a home purchase.

If you have not set money aside for your home purchase or don’t have a Roth IRA to tap- then you might want to consider other down payment options.  Capstar Lending offers Mortgage Assistance Programs and other grant programs that will provide the funds for your down payment and closing costs.

Please consult your financial/tax advisor for more detailed information.

This is not a commitment to lend or extend credit.  Restrictions may apply.  Information and/or data is subject to change without notice.  All loans are subject to credit approval.

Please call Todd Kurio, Residential Mortgage Loan Originator for more details. 512 459 2405, NMLS #214411/216616, todd.kurio@capstarlending.com.   Capstar Lending, Equal Housing Lender.

 

Low Mortgage Rates on VA Loans in Texas!

Want to learn more about historically low mortgage rates for Texas Veterans in Austin, Texas and other cities across Texas?

The Texas Veteran’s Land Board (VLB) hosts free “come and go” fairs across Texas to let veterans know about the resources and programs that are available to them for the VA loans in Texas program.  VLB staff and other representatives from the U.S. Department of Veterans Affairs and the Texas Veterans Commission will be on hand to provide information on home loans in Texas and other information about disability and pension claims, land and home improvement loans, state veterans homes and cemeteries. For more information about these VLB events, please go to: www.glo.texas.gov/vlb/veterans-benefits-fairs/

These events are located in Austin, Amarillo, Waco, Corpus Christi, Tomball, Dallas, Big Spring, Fort Worth, San Antonio. For more information on Home Loans for Texas Veterans, Please call Todd Kurio at 512-459-2405 –Residential Mortgage Loan Originator, Capstar Lending, NMLS #216616/#214411, e: todd.kurio@capstarlending.com.

What Are Jumbo Loans and What Will They Cost Me?

A jumbo loan (otherwise known as non-conforming) is a loan where the loan amount exceeds the Fannie Mae or Freddie Mac limit.

In Texas, the conforming loan limit is $417,000. In higher cost areas like California, the conforming loan limit is as high as $729,750. Jumbo loan rates in Texas are now lower than the loan rates for conforming loan amounts($417,000).

In the past, jumbo rates were about .50% higher than a conforming loan amount. In my 22 years as a mortgage loan originator, I have never seen the jumbo rates the same or lower than conforming loans. The main reason jumbo rates are so low is because lenders that buy and service these loans want to attract wealthy clients and cross sell them other financial products (like brokerage services) where they can collect ongoing fees.

Given the strict underwriting requirements with all mortgages, especially jumbo loans- borrowers are having to open up their entire financial position in order to qualify and lenders can see what other opportunities there are for opening a brokerage account, life insurance, etc. Also, since the borrowers are taking out a low fixed rate loan, the borrowers are likely to keep their mortgage and won’t be refinancing anytime soon. The affluent client will stay as a bank’s customer for a long time.

Jumbo loans have also become cheaper on a relative basis to conforming loans in part from additional government regulation. The Federal Housing Finance Agency(FHFA), which regulates Fannie and Freddie, has forced lenders to keep additional reserves for potential mortgage defaults on conforming loans. They have increased reserves by charging guarantee fees (GFees) to lenders which increase rates on conforming loans. Since Fannie and Freddie don’t participate in the jumbo loan market, those guarantee fees don’t apply on jumbo loans and therefore are not passed on to borrowers who borrow more than $417,000.

In Austin, Texas, you can still obtain financing with as little as $32,450 down up to a sales price of $649,000. These loans also don’t require private mortgage insurance. You can obtain financing with a minimum down payment of $90,700 on a sales price of $907,000 without mortgage insurance.

We can help you with a purchase or refinance of a jumbo loan in a timely and professional manner. Please call Todd Kurio, Residential Mortgage Loan Originator, at 512 459 2405 or email at todd.kurio@capstarlending.com. Capstar Lending, NMLS #216616