Source: Stephen Fishman, Tax Expert, Attorney and Author

The tax benefits of buying a home include:

Home mortgage interest deduction: The interest paid on a mortgage or mortgages of up to $1 million for a principal residence and/or second home is deductible as an itemized deduction. In the early years of a home loan most of the payments consist of interest, so this deduction is particularly substantial during the first years of homeownership.

Depending on the state a buyer lives in and his or her tax bracket, this deduction can reduce the cost of borrowing by one-third or more.

Home equity loan deduction: Homeowners can borrow up to $100,000 against the equity in their home and deduct the interest as an itemized deduction. The money can be used for any purpose, such as paying off high-interest credit card debt. In contract, the interest on credit card debt is not deductible.

Property tax deduction: Homeowners also get to deduct from their federal income taxes the state and local property taxes they pay on their home. This is another itemized deduction that renters don't get.

Deductible home buying expenses: Various closing costs ordinarily involved in a home purchase are also deductible as itemized deductions, including loan origination fees (points), prorated interest on a new loan, and prorated property taxes paid at settlement.

$250,000/$500,000 home-sale exclusion: Perhaps the greatest tax benefit of owning a home comes when a person sells it at a profit. Homeowners who lived in their home for two of the prior five years prior to its sale need pay no income tax on a substantial amount of their profit -- $250,000 for single homeowners and $500,000 for married homeowners who file jointly. This exclusion can be used once every 24 months.

14 days of free rental income: Another little known tax benefit of owning a home is that the owner can rent it out for up to 14 days during the year and pay no tax at all on the rental income. In contrast, a renter who sublets his or her rental must pay income tax on all the rental income he or she earns. 

As of January 1, another addition was made to the mortgage application paper blitz.  It was a mandatory alert on how credit scores might affect the rate quote and terms borrowers receive from their lender.

It will alert applicants when negative information in their credit bureau files triggers higher rates or adverse terms.
Although federal regulators have given lenders several ways to make the mandatory disclosure, the one most mortgage applicants are likely to see covers the following:

• The specific credit score - including the source and the date it was pulled - that was used by the lender to arrive at a decision on the rate quote.
• How the applicant's score ranks against other consumers' scores.
• The key negative credit-file factors that affected the applicant's score, such as the number of late payments, inquiries by the consumer seeking new credit accounts and excessive use of the credit accounts already available to the consumer.
• A reminder that all applicants have the legal right to dispute any inaccuracies they find in their credit files.
• Contact information for obtaining free annual credit reports - one each from Equifax, Experian and TransUnion, the three national bureaus - by toll-free phone, online or by mail.
• A brief description of credit-scoring methodology. 

The average national credit score is 692.  (Scores range from 350 to 850).

The average score in Michigan is 695.  The lowest average score belongs to Nevada at  668 and the highest to Minnesota at 721.

1 out of 1300 in the U.S. has a score above 800

FICO scores are used by 90% of lenders and creditors.

Some average credit statistics:

• 25% of credit reports contained serious errors enough to result in denial of credit
• 79% of credit reports contained mistakes of some kind
• 54% of credit reports contained personal demographic info that was wrong
• 30% of credit reports contained accounts closed but incorrectly showed as open

Equifax reported that lenders made 36 million consumer loans in 3Q10, up 3.7% from a year earlier.  Auto loans increased 16% in 2010 from 2009.  Bankcards rose 17& in 2010 from the year before.  December, 2010 showed the highest use of credit cards since August 2008 - another sign the economy is improving.

47% of home sales for 2010 were funded by cash.  Last year there were 5.2 million home sales of which 2.73 million were funded by purchase money mortgages.  This means that 2.47 million were paid with cash.  Historically, 90% of home sales were mortgaged and 10% were for cash.

Highest Production: Mary Frisinger of Ann Arbor Mortgage

Most Incoming Agent Referrals: Todd Lands and Matthew Miller of the Charles Reinhart Company

CAN YOU HEAR ME? - More than 1 of every 4 U.S. households (27%) do not have a landline phone into their home but instead only use cell phones. (Source: Centers for Disease Control and Prevention) 

SOME UP, SOME DOWN - 27% of Americans surveyed in early January 2011 felt their financial situation had improved from 1 year earlier. Another 27% felt their position had gotten worse. (Source: Bankrate) 

SOME UP, SOME DOWN - 27% of Americans surveyed in early January 2011 felt their financial situation had improved from 1 year earlier. Another 27% felt their position had gotten worse. (Source: Bankrate)

AT THE END OF LAST YEAR - The average price of a new home sold nationwide in the USA in December 2010 was $291,400, its highest monthly average since July 2008. (Source: Commerce Department)

Fed Funds Futures see a 100% chance of a December 2011 rate hike.

In 2010, only 57% of borrowers said they met with their loan officer in person at all during the process of obtaining their loan, according to J.D. Power and Associates.

At Ann Arbor Mortgage we make every effort possible to meet with our borrowers and attend our closings.

At the height if the market there were 450,000 loan officers nationwide. Today there are roughly 100,000 nationwide.  Loan officers are now required to be licensed, to have passed both a state and national test and their backgrounds are checked as well before they can work. 30% of those who took the tests failed them.

Those who remain are the "best of the best" and the best work right here at Ann Arbor Mortgage.
 

Pete Stegler did it again. He guided us through buying our first home a few years ago, helped us refinance a year later and has aided us in refinancing our home again!

Pete kept his eyes on the rates and kept us informed whenever things started to turn our way. He was diligent. He was driven to help us find the funds and save us money (we're looking at saving almost $200 a month with our new rate).

I count Pete as a friend. Not just because he saved us money, but because that's how he treats me. He'll be our 'mortgage guy' for life and we continue to encourage our friends and family to use him whenever their lives head towards home ownership.

- Brad H.  

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Dear Mary F.,

You did a great job with our refinancing and locking us in with the fabulous rate.

I really liked the fact that you had so much of our information already and we didn't have to fill out all the forms.  You let me know exactly what we needed to provide, and it all went  smoothly.  I have recommended you to another friend who seems to be having problems with other financers!  Your level of service is exceptional.

Thank You.

Elaine