Tag: HELOC Loans

Relocation Mortgage Application: Top 5 Questions for Transferees

Post author By Nancy Kritzer | CRP
Post date November 3, 2020

Portrait happy family sitting on couch, hugging, unpacking cardboard boxes with belongings in modern living room, looking at camera, happy wife and husband moving into new house, relocation

Many transferees seek to buy a home in their new location, and will need to submit a relocation mortgage application. GMS recommends that companies should encourage transferees to buy a home instead of renting. Transferees who buy a home establish roots in their new community and can settle in more comfortably. Also, if a company offers home purchase benefits, this sends a strong signal of commitment on their part to the transferee.

What is a Relocation Mortgage?

A relocation mortgage is an alternative mortgage product. Transferees may be eligible for benefits that will help them move and purchase a home. In some cases, employers may contribute subsidies to help cover the costs of closing. They may help transferees obtain a lower interest rate on the mortgage by paying an upfront fee, also known as paying for points.

GMS spoke with Anthony Hughes, Relocation Account Manager at Quicken Loans. Anthony agreed to share his advice and guidance for transferees who need to submit a relocation mortgage application.

Relocation Mortgage Application Top 5 Questions

Question #1: Employment

Are you a new hire? Transferring internally? Did you get a promotion?
What is your start date for your new role, what is your new role, and how much will your new income be?
Do you have an offer letter available to provide us?

Question #2: Timeline/Goals/Awareness

Have you relocated before?
When are you looking to have everything finalized?
Do you have a timeline in place?

Question #3: Departure Home versus Destination Home

What are your plans with your current home?
Do you need to sell your current home to have the funds to qualify for your new mortgage?
Do your benefits include a Guaranteed Buyout Option (GBO) or Buyer Value Option (BVO) that will impact your relocation mortgage application?
How much are you looking to spend on your new home?
Are you familiar with the real estate market in the new area?

Question #4: Assets

What assets do you have on hand?
What are your account balances?
Where are the funds coming from for your new home purchase? Proceeds? Equity advance? Cash on hand? Gift?

Question #5: Credit Report

What is included in the credit report?
What is your score?
Could we utilize dedicated down payment funds in a better way?

Reviewing the Answers on the Relocation Mortgage Application

Anthony shares that once Quicken Loans has reviewed these top 5 questions with a transferee, the team will provide them with details around the Quicken Loans Mortgage First program. This program enables Quicken Loans to fully underwrite the transferee’s loan prior to their first house hunting trip. Quicken Loans’ Mortgage First approval is stronger than just a traditional pre-qualification. As a result, this approval can give transferees the upper hand when making an offer on a new home.

What Does This Mean?

Transferees who want to submit a relocation mortgage application to buy a new home should review their current financial arrangements with a qualified lender. Anthony states that Quicken Loans has several informative guides to help transferees understand the relocation mortgage application process, including a “Do’s and Don’ts of Relocating to a New Home” flyer. Transferees who have a mortgage on their current home may be able to obtain another mortgage for a new home. However, this depends on their specific financial circumstances. Transferees should understand that they must be approved for the total amount of current mortgage debt and their new mortgage loan.

What Should Employers do for Transferees Who Want to Submit a Relocation Mortgage Application?

Employers with transferees looking to buy a new home should direct them to speak with qualified lenders and financial advisors for guidance. They should review their relocation policy to ensure their policy represents industry best practices and provides strong support for their talent acquisition program.

Employers should also work with an experienced and knowledgeable Relocation Management Company (RMC). By engaging the RMC early in the process, employers will be assured of all the important points that relate to the transferee’s ability to buy a new home and arrive to their new location on schedule.

Conclusion

Global Mobility Solutions’ team of domestic relocation experts has helped thousands of our clients understand how to communicate important points relating to how transferees should submit their relocation mortgage application. Our team can help your company understand how to proceed by providing guidance to transferees on obtaining important and timely information from qualified lenders and financial advisors.

GMS was the first relocation company to register as a “.com.” The company also created the first online interactive tools and calculators, and revolutionized the entire relocation industry. GMS continues to set the industry pace as the pioneer in innovation and technology solutions with its proprietary MyRelocation^® technology platform.

New SafeRelo™ COVID-19 Knowledge Portal

GMS recently launched its new SafeRelo™ COVID-19 Knowledge Portal featuring a number of helpful resources including:

Curated selection of news and articles specific to managing relocation programs and issues relating to COVID-19
Comprehensive guide to national, international, and local online sources for current data
Program/Policy Evaluation (PPE) Tool for instant relocation policy reviews

Contact our experts online to discuss how to provide guidance for a transferee in submitting their relocation mortgage application, or give us a call at 800.617.1904 or 480.922.0700 today.

GMS is sharing public knowledge and can help companies more clearly understand mortgage loans for transferees. However, GMS is not a CPA firm or a lender, and is not giving financial advice. Everyone’s financial situation is different; individuals and employers should consult their lenders and financial advisors prior to making any decisions.

We're Here to Help! Request a Courtesy Consultation

Are you ready to talk to a Mobility Pro? Learn how GMS can optimize your mobility program, enhance your policies to meet today’s unique challenges, receive an in-depth industry benchmark, or simply ask us a question. Your Mobility Pro will be in touch within 1 business day for a no-pressure, courtesy consultation.

Buy a Home Home Purchase

Renting Versus Buying: 2020’s Record Low Interest Rates Help Make the Case

Post author By Jules Matz | AHWD, ABR, CNE, CRP, GRI
Post date August 27, 2020

Excited expectant couple hold the keys to their new home. They are standing in front of the house on a sunny day.

Many of Global Mobility Solutions’ clients have transferees relocating to a new destination who must decide on renting versus buying. There may be several reasons why a transferee would choose one option over the other. GMS recommends companies encourage transferees to buy instead of renting. When transferees choose to buy, there are several benefits for both the client and the transferee.

GMS spoke with Anthony Hughes, Relocation Account Manager at Quicken Loans. Anthony agreed to share his advice and guidance on this topic, along with some examples.

What is New in the Renting Versus Buying Concept for 2020?

According to Anthony, this concept has been a hot topic for the past few years. However, it is even hotter in 2020 with interest rate averages being in the upper-2’s to low-3’s depending on the client profile. With both options, the choice depends on what the client is most comfortable doing.

However, in several markets across the country, clients who buy are able to save money and “invest in themselves” for less than they are paying in rent. As Anthony states, “Wouldn’t it be great if everyone could ‘live the American dream’ of owning their own home?”

Pros and Cons of Renting Versus Buying

Anthony believes transferees should look at both the pros and the cons of renting versus buying before they make any decision.

The Renting Side of the Question

Renting Pros:

Mobility/freedom to move around
Landlord pays for maintenance
Does not require expensive closing costs
No fluctuation in monthly housing expenses
Allows you to test-drive different living spaces

Renting Cons:

You don’t build any equity if you choose renting versus buying
Limited ability to customize your living space
Rent could go up over time
Landlord might sell or decide to stop renting
Limited sense of home stability/permanence

The Buying Side of the Question

Buying Pros:

You build equity over time
Home value may increase over time
You may reap tax benefits
Unlimited freedom to customize your living space
Sense of home stability/permanence

Buying Cons:

Closing costs can be prohibitive
Responsibility for maintenance and repairs that require time and effort
Less flexibility to move (at greater difficulty/expense)
Home value may decrease
Recent tax laws could hamper tax benefits

Renting Versus Buying: Real World Examples

On the concept of renting versus buying, the proof is in the numbers. Looking at some of the hottest markets/states that GMS serves, below are three examples that do not include taxes or homeowner’s insurance. In all scenarios, there are huge opportunities for savings. Anthony shared these three real world examples to help illustrate the concept:

Texas Renting Versus Buying

Average 3-bedroom rental: $1,550

Average Purchase Price: $211,199

20% Down Payment
Avg. 3.25% interest rate
30 year fixed conventional mortgage

*Total Monthly Payment: $919.15

*Does not include HOI or Taxes as these are based on property specific

Arizona Renting Versus Buying

Average 3-bedroom rental: $1,600

Average Purchase Price: $277,574

20% Down Payment
Avg. 3.25% interest rate
30 year fixed conventional mortgage

*Total Monthly Payment: $1,208.02

*Does not include HOI or Taxes as these are based on property specific

North Carolina Renting Versus Buying

Average 3-bedroom rental: $1,360

Average Purchase Price: $174,380

20% Down Payment

Avg. 3.25% interest rate
30 year fixed conventional mortgage

*Total Monthly Payment: $758.91

*Does not include HOI or Taxes as these are based on property specific

What Does This Mean for Renting Versus Buying Decisions?

2020’s record low interest rates help transferees understand renting versus buying decisions with more clarity on the financial side of things. Transferees should consider the pros and cons of renting versus buying and weigh the importance of each factor in their decision-making process. Anthony notes that Quicken Loans offers complimentary mortgage reviews. If a GMS client’s transferee was ever unsure or just wanted to see what it looked like, the team at Quicken Loans would be glad to have a conversation.

What Should Employers do to Assist Transferees with Renting Versus Buying Decisions?

Employers with transferees looking to buy a home should direct them to speak with qualified lenders and financial advisors for guidance. Employers should also review their relocation policies to determine if enhancements can be made to further promote homeownership.

Conclusion

Global Mobility Solutions’ team of corporate relocation experts has helped thousands of our clients understand how to communicate the important points of renting versus buying to their transferees. Our team can help your company understand how to proceed by providing guidance to transferees on obtaining information from qualified lenders and financial advisors.

Contact our experts online to discuss how to assist your company’s transferees with understanding the concept of renting versus buying, or give us a call at 800.617.1904 or 480.922.0700 today.

GMS is not a CPA firm or a lender, and is not giving financial advice. Everyone’s financial situation is different; individuals and employers should consult their lenders and financial advisors prior to making any decisions.

Tags 2020 US Rental Market, Apartments, Buy a Condominium, Buy a Home, buyer value option, Buyer Value Option Program, bvo, BVO Program Benefits, HELOC Loans, Home Relocation Appraisal, Home Sales, Home Tax Deduction, Real Estate, Rental Market, Renting Versus Buying

Buy a Home Domestic Relocation Challenges Domestic Relocation Tips Domestic Relocation Trends

Changes in Rules for Home Tax Deductions

Post author By Jules Matz | AHWD, ABR, CNE, CRP, GRI
Post date November 27, 2018

A yellow note pad rests on top of a 1040 tax form with a reminder of the new tax laws implemented for 2018.

Homeowners in the United States should be aware of changes to home tax deductions. These changes are important to understand for when they prepare their 2018 tax returns during the 2019 tax preparation season. They stem from the federal Tax Cuts and Jobs Act of 2017. Changes to home tax deductions were implemented to reduce the ability of homeowners to deduct interest on Home Equity Lines of Credit (HELOC) Loans. When HELOC loans are not used for home purchases, building, or substantial improvements, the interest on these loans will no longer be deductible. There are also dollar limits on the total qualified residential loan balances allowable for deductions, an increase in the standard deduction, and a $10,000 limit on the federal deduction of state and local taxes.

What is Home Equity?

Home Equity is the portion of a home that the owner actually “owns” either through paying down their mortgage or growth in the property value of the home. Homeowners who build equity in their home can help increase their net worth. As a result, home equity may offer homeowners a useful source of funds to borrow from in times of need, such as during a home renovation.

Internal Revenue Service (IRS) Issues Clarification for HELOC Loans

The IRS issued a clarification on February 21 of this year in response to several questions from taxpayers and tax professions. IR-2018-32: Interest on Home Equity Loans Often Still Deductible under New Law describes several examples to demonstrate the effects of the new rule. Important points of clarification include the following:

Interest on a home equity loan used to build an addition to an existing home is typically deductible
Interest on a home equity loan used to pay personal living expenses, such as credit card debts, is not deductible
The loan must be secured by the taxpayer’s main home or second home (known as a qualified residence)
The loan must not exceed the cost of the home and meet other requirements

Additionally, the new tax reform law imposes lower dollar limits on mortgages in order to qualify for the home mortgage interest deduction. The IRS notes that starting in 2018:

Taxpayers may deduct interest on $750,000 of qualified residence loans, down from the previous $1 million limit
There is a limit of $375,000 for a married taxpayer who files a separate return. This is down from the previous $500,000 limit
The new limits apply to the combined amount of all loans used to buy, build, or substantially improve the taxpayer’s main home and second home

Itemizations Must Exceed New Standard Deduction

To itemize for 2018 taxes, taxpayers must understand the impact of the new standard deduction. The tax reform law states that total home tax deductions must exceed the new standard deduction. The new standard deduction amounts are:

$12,000 for singles
$18,000 for heads of household
$24,000 for married couples who file jointly
$1,600 additional deduction for singles 65 and older
$2,600 additional deduction for married couples both 65 and older

Limit on State and Local Tax Deductions

The tax reform law places a limit on the federal deduction of state and local taxes to only $10.000. Homeowners in areas of the United States which experience high taxes include those in the Northeast and the West Coast. As a result, these homeowners may experience an increase in their tax liability.

What Should Homeowners Do?

Homeowners planning to file for home tax deductions on their 2018 tax returns should be aware of the changes to allowable deductions on their HELOC loans. They should also be aware of the new lower dollar limits on qualifying mortgages imposed by the tax reform law. Homeowners should be aware of the requirement that deductions must exceed the new standard deduction if they plan to itemize. Homeowners in states with high taxes should be aware of the new $10,000 limit on federal deduction of state and local taxes. In all cases, homeowners should consult a qualified tax professional for guidance on this issue.

Conclusion

Global Mobility Solutions’ team of corporate relocation experts has helped thousands of our clients understand the importance of obtaining professional guidance when it comes to changing tax regulations. We can help your company understand how to communicate the potential impact of these changes to your new hires and transferees. This will ensure they have relevant information as it applies to their relocations.

Learn best practices from Global Mobility Solutions, the relocation industry and technology experts who are dedicated to keeping you informed and connected. Contact our experts online or give us a call at 800.617.1904 or 480.922.0700 today.

GMS is not a tax advisor and is only disseminating public information. You should always consult your own tax professional prior to making any decisions.

Tags Domestic Real Estate, Domestic Relocation, HELOC Loans, Home Tax Deduction, Home Tax Deductions, mortgage costs

What is a Relocation Mortgage?

Top 5 Questions for Transferees Who Plan to Submit a Relocation Mortgage Application

Relocation Mortgage Application Top 5 Questions

Question #1: Employment

Question #2: Timeline/Goals/Awareness

Question #3: Departure Home versus Destination Home

Question #4: Assets

Question #5: Credit Report

Reviewing the Answers on the Relocation Mortgage Application

What Does This Mean?

What Should Employers do for Transferees Who Want to Submit a Relocation Mortgage Application?

Conclusion

New SafeRelo™ COVID-19 Knowledge Portal

We're Here to Help! Request a Courtesy Consultation

What is Home Equity?

Internal Revenue Service (IRS) Issues Clarification for HELOC Loans

Itemizations Must Exceed New Standard Deduction

Limit on State and Local Tax Deductions

What Should Homeowners Do?

Conclusion

Other Services

About

Contact

Address

About

Other Services

Address

About

Address

Looking for something?