TAXES AND DEDUCTIONS
NOTE: Embrace is not a tax advisor. Please consult a professional for further information regarding the deductability of interest and charges.
How do I get my mortgage interest statement?
Most lenders send these forms via snail mail, though you may be able to download yours online, too. Check with your servicer to see if they offer an online dashboard or customer center you can utilize. If your loan is serviced by Rushmore, visit this link to learn more about how to access your 1098.
How much of my property taxes can I write off?
I renovated my home last year. Are there any tax write-offs I can take advantage of?
Be sure to speak with a tax professional before making any decisions.
Can I write off interest on second homes?
The IRS does not allow you to write off interest on third homes or beyond. If you own an investment property, you’ll likely deduct its interest and other costs as business expenses. Be sure to speak with a tax professional before making any decisions.
What types of tax deductions can homeowners take advantage of?
Homeowners enjoy a slew of tax write-offs that other Americans just don’t have access to. You can deduct the interest you paid on your mortgage, your property taxes, and much, much more. See this list for a full breakdown of potential write-offs.
The exact deductions you’ll be eligible for will depend on what activities you took part in last year. Please be sure to speak with a tax professional before making any decisions. See below for more detail:
If you bought a home…
If you just purchased your home last year, then you’ll want to check your closing statement. If you paid for points (listed under Section A of the loan costs section), you may be able to write the costs of these off. If you itemize your returns, you’ll also be eligible to deduct your private mortgage insurance costs and the interest you paid on your mortgage — both at closing and across the year — and your property taxes, too.
If you sold a home…
As long as you made less than $250,000 in profits on the transaction ($500,000 if you file jointly with your spouse) and you lived in the house at least two years, you’ll be exempt from paying capital gains taxes on your home sale. This could save you significantly on your tax liability.
Additionally, you’ll also be eligible for deductions for your interest, mortgage insurance, and property taxes before you sold the house (and on your new home, if you bought another after).
If you refinanced your mortgage…
Refinancing is much like purchasing a new home. If you paid for points or prepaid interest at closing, these can be deducted from your annual tax returns. You also may be able to write off things like mortgage insurance, property taxes, and interest paid across the year.
If you stayed in the same home..
If you neither bought, sold, or refinanced last year, but instead stayed in the same home as the year prior, you’re still eligible for some write-offs. Use this list to guide you.
Do I need to make my mortgage payment during this pandemic?
Who qualifies for assistance?
What type of assistance am I eligible for?
Who determines if I am eligible for assistance?
After a loan has closed, sometimes Embrace remains responsible for the Loan servicing, and sometimes the servicing responsibility is transferred to another.
If Embrace retained the servicing of your loan, then your loan would be serviced right now by Rushmore Mortgage Services on behalf of Embrace, and you should be making your monthly mortgage payments to Rushmore.
If the servicing of your loan was transferred, then you should contact the company to whom you are making your monthly mortgage payments for further information about your options for COVID relief.
What is the contact information for
Rushmore Mortgage Services:
Monday – Friday 8:00AM – 6:00PM CST
Can you refinance with a Conventional loan?
What is the difference between a cash-out refinance and a home equity line of credit (HELOC)?
With a cash-out refinance, you replace your current mortgage with a new mortgage to help with expenses such as tackling home improvements or paying off other debt. With a fixed-rate cash-out refinance, you know exactly what your rate will be and what you will pay each month.
The best option for you depends on your financial need and situation. Embrace does not offer HELOCs, but our mortgage specialists can help you decide.
Do I need to take cash out of my house to free up cash?
No, not at all. While a 15-Yr Fixed Rate and Term Refinance is one of the lowest fixed rates available and you could save significantly over the life of the loan plus shorten the term of your loan, it might not be right for you.
There is also a 30-Yr Fixed Rate and Term Refinance, which is set at a longer term to accommodate your budget restraints (different rates and terms might apply). It can be most helpful if you need some extra cash monthly and either don't have enough equity or don't want to use it. You can then use the extra cash each month to:
- Take care of climbing expenses.
- Pay down other high-interest debt.
- Provide you a little financial relief each month.
What does it mean to refinance a mortgage?
When is the right time to refinance?
- You’d like to lower your interest rate or monthly mortgage payments
- You need cash, fast
- You’d like to consolidate debt
- You’re looking to shorten your payback term
- You want to switch from a variable-rate to a fixed-rate mortgage to create regular, predictable payments
- You’d like to get a variable-rate mortgage with better terms
What is the typical refinance process?
- Research the value of your home and check your credit scores.
- Gather all needed documents and apply for the refinance.
- After your loan is approved, the underwriting process begins—the time for careful review.
- Sign your papers and close your loan.
What types of bills can I consolidate by refinancing?
What kind of refinance loans do you offer?
What can I do with the money from a cash-out refinance?
What is a mortgage review?
- Lower your interest rate
- Reduce your monthly payments
- Shorten your loan term
- Refinance out of an adjustable-rate mortgage (ARM) or into an ARM
- Use your home equity for renovations or to meet other needs
What does it mean to be pre-qualified?
How does my credit score impact the rate I get on my mortgage loan?
How is my credit score calculated?
How can I improve my credit score?
• Get copies of your credit reports and stay on top of them
• Set up payment reminders and pay your bills on time
• Focus on reducing your debt
What is an underwriter looking for in a purchase loan application?
What happens at closing?
What costs are required at closing?
Why should I buy a home?
Is buying a home better than renting?
Is now the time to buy?
How much can I afford?
- Your debt-to-income ratio (your total monthly payments as a percentage of your gross monthly income)
- Cash you have available for a down payment and closing costs
- Your credit history
- The value of the home you’re buying
What is the loan-to-value (LTV) ratio? Why do I need to know that?
What is a home appraisal?
How do you qualify for a loan?
How long does the mortgage process take?
Do I need to find a home before I apply for a mortgage?
What’s an escrow account, and how does it work?
What credit score do I need to get approved?
Can you get a mortgage without a credit score?
What is the difference between Embrace, my local bank, and a broker?
The "respond-by" date in my offer has passed. Can I still refinance with Embrace?
Where can I find my Personal ID Number, and why do I need it?
How long has Embrace been in business?
Can I pay my mortgage online?
Where do I log in to see the status of my loan?
When did Embrace start using Rushmore as a sub-servicer?
Will my electronic payment authorization with RoundPoint be transferred to Rushmore?
Can I get a home equity line of credit (HELOC) with Embrace?
What does it mean to be pre-approved?
What is an appraisal waiver and how could it help me?
Am I eligible for MIP cancellation?
How do I eliminate or reduce my mortgage insurance payment?
How do interest rates affect my mortgage?
How are rates calculated?
What is mortgage insurance?
Simply put, mortgage insurance is a policy taken out on your loan that protects the lender in the event of default or foreclosure. Of course, no one expects to default on their mortgage, but life isn’t always predictable and lenders need assurance that they will get their money back in the event your financial health takes a turn for the worse.
In this scenario, the lender is the beneficiary if you default on the mortgage loan for any reason.
How much money do I need to buy a home?
What does my mortgage payment include?
What's the best way to get started?
What is PMI and do I need it?
What are points?
What does it mean to "lock in" your rate?
Aren't the interest rate and the annual percent rate (APR) the same thing?
Can I take advantage of Embrace’s No Down Payment program if I have owned a home before?
What types of loans does Embrace offer?
What Are the Most Common Types of Home Loans?
The most common types of mortgages are Conventional loans and FHA loans. Understanding your options and the requirements for each mortgage can help you figure out which one is right for you. Because there are many different types of loans, every borrower should choose the mortgage and the lender that’s best for their specific needs.
Many homebuyers prefer a Conventional loan with a fixed rate because the costs accompanying the loan are usually lower and you can often purchase a more expensive home. But because this type of mortgage is not backed by the government, they’re sometimes harder to qualify for than other loans. If you have a solid credit score, a Conventional mortgage may be a great mortgage option.
FHA loans are backed by the government so they’re one of the easiest types of mortgages to qualify for. At Embrace, we accept FICO® scores of 580 and above, along with down payments as low as 3.5%. On top of that, the down payment and closing costs can often be covered with gift funds. An FHA loan can be ideal for first-time homebuyers or borrowers who have challenging credit.
For homes in an area designated as rural by the U.S. Department of Agriculture, a USDA loan is often the way to go. And believe it or not, many suburban neighborhoods qualify as rural. With our USDA loans, you can enjoy zero down payment, below-market mortgage rates, and no private mortgage insurance.
Veterans and those in the military love our VA loans. A VA loan is easier to qualify for than other types of mortgage loans, and it requires little or no down payment. Because VA loans are backed by the Federal Government through the U.S. Department of Veterans Affairs (VA), they also have better interest rates than traditional mortgages.
A Jumbo loan is used to finance a property that’s too costly for a Conventional conforming loan. Our Jumbo mortgages are simpler than many others, and they’re usually easier to qualify for. We offer as little as 10% and 20% down payment for loans up to $2 million and $3 million, respectively. We also offer Jumbo options for borrowers with credit scores below 740.
Which home loan programs can make buying easier?
Sometimes buying a home that fits your needs, budget, and lifestyle can be a challenge, especially in an environment with low interest rates and high demand. Luckily, we can help with that. Embrace has several exclusive mortgage loan programs that make buying a home more convenient and doable.
Approved to Move™
When you find the house of your dreams, you want to be ready. With Approved to Move™, you get a fully underwritten approval before you find a home. Sellers love Approved to Move™ because it’s virtually as good as a cash offer, which helps you stand out from other potential buyers.
Guaranteed On-Time Closing (GOTC)
Whether it’s your first home purchase or your tenth, no one wants to miss their closing. With our Guaranteed On-Time Closing (GOTC) program, we’re so confident that we’ll meet the date, we put money on it. $2,500 to be exact.
Extended Rate Lock
Interest rates are always on the move and even a small change can have consequences. Our Extended Rate Lock program gets rid of those worries. We can lock your mortgage rate for up to 9 months, allowing you to buy or build a home with confidence.
Programs for homebuyers with limited income
Having a limited income shouldn’t stop you from getting a mortgage loan to purchase a home. That’s why we offer Fannie Mae’s HomeReady® and Freddie Mac’s Home Possible®. With these programs, your FICO® Score can be as low as 620 and you can put down as little as 3% — and many types of down payment sources, such as gift funds, are acceptable.
Do you offer renovation home loans?
Thinking about making some changes to your home? We can help make it happen. We offer two types of 203(k) loans, the FHA Full 203(k) and the FHA Limited 203(k), along with Fannie Mae’s HomeStyle renovation loan. Instead of managing two different loans, you can finance the expense of home repairs or a remodel with one mortgage refinance. And this way, you can take advantage of a low interest rate, too.
What types of refinance loans do you offer?
There are a number of good reasons to refinance your mortgage loan, especially when interest rates are low — and it’s not as complicated as it sounds. We offer several refinance loans, such as our cash-out refinance, debt consolidation refinance, and rate-and-term refinance, along with others.
Want lower monthly payments or a shorter loan term? Play with our refinance calculator to discover how a refinance loan might benefit you.
Frequently asked questions about mortgage loan types
We’ve made it simple. If you’re not sure whether you qualify or you’re wondering how much loan you can afford, the first step is to get pre-qualified.
Embrace is the first mortgage lender to offer pre-qualification through text. Now, you can get pre-qualified in minutes right from your phone. Text PREQUALME to 22722. There’s no obligation, no cost, and no impact to your credit score.
Learn more about the mortgage loan process here.How is my monthly payment calculated?
To calculate your monthly payment, we use your loan type, home price, interest rate, and loan term. Use our mortgage calculator to estimate your monthly mortgage payment. It will show different examples of what your loan size and monthly payment might be.What documents do I need to provide to apply for a mortgage loan?
When applying for a home loan, you’ll need to provide documentation for income verification, credit verification, and financial history. The following docs will be required:
- W-2 and tax return
- Proof of income, such as pay stubs
- Driver's license or ID
- Credit report
- Bank statements of assets, including gift funds
- Rental history
Get started on your 15-minute loan application today!
What is a second mortgage with interest-only payments and balloon payment?
What are 203(k) loan requirements?
• The property must meet renovation loan requirements.
• An appraiser’s estimate of what the property value will be with completed improvements must support the mortgage amount.
• Down payment and closing cost requirements may vary depending on the loan type.
How do I get a Certificate of Eligibility?
What kind of renovations can be made?
Properties that are sold “as-is” often would not qualify for a standard FHA loan. 203(k) loans, however, are designed to improve, update, and modernize the home.
I have already obtained one VA loan. Can I get another one?
How can I obtain proof of military service?
Only a portion of my eligibility is available at this time because my prior loan has not been paid in full even though I don't own the property anymore. Can I still obtain a VA guaranteed home loan?
Is the surviving spouse of a deceased veteran eligible for the home loan benefit? What about the children of an eligible veteran?
What is a conventional loan?
What is an FHA insured loan?
What is the difference between fixed and variable rate mortgages?
What loans are available to Veterans and members of the military?
How do you know which mortgage loan is right for you?
With so many mortgage options out there, it can be hard to know how each would impact you in the long run. The most common mortgage loan types are:
- Adjustable-rate mortgage (ARM)
- Federal Housing Administration (FHA) loan
- Department of Veterans Affairs (VA) loan
- Fixed-rate conventional loan