Home Equity Line of Credit

The Federal Housing Administration (FHA) insures mortgages to allow low to moderate income families to purchase their own home. With government backing, families can buy a home at a lower initial cost. However, there are limitations with this program.

Mortgage Insurance – Section 203(b)

The FHA provides mortgage insurance, not mortgage loans to families. However, this program can reduce the cost of a home loan by thousands of dollars. The program also encourages lenders to finance mortgages for people who might just miss the underwriting requirements. For example, FHA loans require a smaller down payment.

With FHA’s Section 203(b) program, a homebuyer can purchase a new or used one to four family home. However, the buyer has to live in the home.

FHA Benefits

A FHA mortgage allows some borrowers to qualify for the lower interest rates of a conventional loan, rather than using a higher rate sub-prime mortgage. This can save thousands in interest charges.

Required down payments are also smaller. Instead of the typical 10% down, a buyer can put down as little as 3%. The closing costs can also be financed with the mortgage, lowering the initial costs of purchasing a home.

The FHA also limits fees that can be charged to the borrower. For example, the loan origination fee cannot surpass 1% of the mortgage amount.

Drawbacks

FHA loans do have their drawbacks and are not for everyone. For instance, the FHA sets loan limits to ensure the program serves low to moderate income families. You may find with these loan caps that you will need to apply for a conventional or jumbo loan to purchase your home.

You also have to use the house as your primary residence. If you are looking to invest in property or buy a vacation home, then you will need to look at other financing sources.

Applying For FHA Mortgage

FHA insured mortgages are provided through approved financial institution. Fortunately, many of today’s lenders are approved. Just like with any type of loan, you should compare rates of different lending companies. An FHA approved institution doesn’t necessarily mean they offer the lowest rates.

You can easily find rates and terms online by searching individual sites or using a mortgage broker site. By collecting quotes, you can research rates without hurting your credit score.

Hopefully you found this article helpful, it was provided by JVM Lending, the leader in CA Home Loan and CA Mortgage loans.

If you are a business owner then you can take many business related tax deductions. You can deduct the cost of operating your business if you are a business that operates to make a profit. You do not necessarily make a profit but must run a business that is attempting too.

Operating a Home Based Business

If you use part of your home to operate your business then you can deduct a percentage of home related expenses such as utilities, phone, mortgage, insurance, and even maintenance on the home.

Vehicle Deductions

If you use your personal vehicle for business purposes then you can deduct car related expenses such as mileage and car repair. If your business owns a vehicle then you can deduct the entire amount of the vehicle. You are currently able to deduct up to 58.5 cents per mile for business travel. That can add up to a lot of savings for your business.

Payroll

If you have employees that you pay to help operate your business then those expenses are deductible as well. If you currently offer and contribute to employee retirement plans, those can be considered a business expense.. You can also deduct the insurance premiums paid on these employees.

Rent or Mortgage

You can deduct either the rent or mortgage you pay monthly for the space to run your business. If you run your business from your home you can also deduct either the rent or mortgage. Don’t forget deductions related to mortgages such as mortgage interest and points, insurance, and property taxes.

Visit TurboTax Online to find many more business related tax deductions. TurboTax Online offers free deduction maximizers

I could compile a huge long list but, I won’t. If you want the huge long list you can consult the publication from the IRS called Pub 535. I’ll save you the agony of reading boring material in this article.