FAQs

Homeowners are allowed to write off their property taxes, but there are some caveats to doing so. First, you must itemize your returns. This means forgoing the standard $12,400 deduction ($24,800 for a couple filing jointly), and instead writing off many smaller deductions in its place. If you do opt for this route, deductions for state and local taxes (property taxes included) are capped at $10,000. Be sure to speak with a tax professional before making any decisions.

There could be a few. If your upgrades improved the efficiency of your house — meaning reduced the amount of energy it uses — there may be other deductions you can leverage as well. If you added solar panels or another alternative energy source, for example, you can write off 26% of your costs (in 2020). If you added energy-efficient windows or doors, installed a natural gas water heater, or updated your insulation, you’ll enjoy a tax credit of up to $500.

Be sure to speak with a tax professional before making any decisions.

You can deduct interest on up to $750,000 in mortgage debt. This can be spread across both a main, primary residence and a second home. So if your first home has a mortgage of $200,000 and your second home a mortgage of $500,000 ($700,000 total), you’d be able to write off the full amount of your interest paid across the year.

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.

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.

A HELOC and a cash-out refinance both use the equity in your home to get you the cash you need for other expenses. HELOCs work somewhat like a credit card. There is a draw period where you use what you need, when you need it. During the draw period, you are typically making interest-only payments, and the interest rate is usually adjustable.

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.

Refinancing is simply the process of replacing your existing mortgage with a new one with a lower rate and/or better terms. It can help you realize your dreams and it doesn't get any easier than with Embrace Home Loans.

There are many great reasons for refinancing, including:

• 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

Refinancing is usually a much simpler process than buying a home. Typical steps in the process include:

1. Research the value of your home and check your credit scores.
2. Gather all needed documents and apply for the refinance.
3. After your loan is approved, the underwriting process begins—the time for careful review.
4. Sign your papers and close your loan.

Consolidating your bills by refinancing your mortgage can take other debt such as student loans, auto loans, personal loans, medical bills, and credit card balances and roll them all into one, easy payment.

When you refinance with Embrace, you can get a loan to take cash out, lower your payment, shorten your term, or even do a combination of those, depending on your qualifying numbers. 

When you use the equity in your home to get money via a cash-out refinance, you can use that money for anything you choose. You can pay off your credit cards, eliminate student loans, make home improvements, start a new business, or even put a down payment on an investment property.

That’s a question only you can answer, because there are benefits to both. Buying could be a better deal for you if you plan on living in your home for at least three to five years. The type of loan you choose also comes into play. Give our Rent vs. Buy calculator to weigh your options.

Factors to consider include price, interest rates, location, and your financial situation. When interest rates at or near record lows, they aren’t likely to go lower, so waiting for them to drop even more is risky. Only you can determine if you’re ready to buy! Just make sure you have a stable job, and you plan on staying in the home for at least three to five years. You should also have enough money to save for a down payment and closing costs. Use our helpful mortgage calculator to see how much home you can afford.

Everyone's financial situation is different, so it’s important to figure out what you can comfortably afford to borrow, which depends on four factors:

• 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

How much home can YOU afford? Use our handy mortgage calculator and find out!

Loan-to-value (LTV) tells you how much equity you have in your home relative to how much you owe on it and what the house is worth. LTV is important to know when refinancing because it can affect your interest rate and whether or not you’ll need Private Mortgage Insurance (PMI).

Getting a home appraisal is a standard part of the mortgage process. Lenders like Embrace will give customers a loan based on the appraisal value of the property they’d like to buy or refinance. Appraisals are conducted by 3^rd party companies and are not influenced by Embrace Home Loans. Home appraisals are determined by comparing recently sold, comparable homes in the same neighborhood as your home or the home you are interested in purchasing or refinancing. The appraisal company provides a report to Embrace after the appraisal is conducted.  Quite simply, when you use a home for collateral for a loan, the lender wants an appraisal report to make sure the loan will be guaranteed by the value of the property.

When you first meet or speak with a loan officer, they’ll just want to learn a few basics about you and your financial situation. Once the loan process gets started, you’ll need to provide proof of where you work, your income, any debts you may have, your assets, and how much you plan to put toward a down payment. Our loan officers will clearly explain your mortgage options and answer all your questions so you feel confident in your decision.

The time needed to complete the mortgage process varies by customer and lender because it includes gathering information from a customer, verifying that information, and processing the actual loan. The average amount of time to close on their home purchases is 47 days across all loan types, according to Ellie Mae. Purchase loans generally take longer to close than refinance loans by an average of 12 days. Factors such as the loan type and contract dates can affect closing times.

Short answer — no! It’s actually smarter to get started on the process before you find your dream home. Other lenders offer pre-qualifications. But our Approved to Move™ program gives you much greater bargaining power, because it’s the next best thing to a cash offer, which will make you very appealing to sellers. 

Your mortgage payment may include additional costs like your homeowner’s insurance and property taxes. We can add the monthly portion of each of those accounts to your mortgage payment. That money is held in an escrow account managed by a third party to make sure those costs are paid on time.

The higher your credit score, the better your financing options will be.  But you can get approved with a credit score as low as 640, as long as you meet the other loan requirements.

Actually, yes you can. If you’ve paid off all your debt, it’s possible that you won’t have a credit score when you apply for a mortgage. You’ll just need to supply some additional paperwork so the underwriter can review it personally – it’s a process called manual underwriting, and it might make the mortgage process take a little longer than usual.

If you applied for your original FHA home loan prior to June 3, 2013, you may be able to perform and MIP cancellation (also known as MIP Elimination). To understand how much you pay in mortgage insurance on top of your principle and interest, check your monthly mortgage statement or give an Embrace expert a call for a no-obligation mortgage evaluation.

If you’re currently required to carry mortgage insurance, there is light at the end of the tunnel: you don’t have to keep it for the entire length of the loan. You can pay your loan down faster by paying more than the required minimum each month, which will help you build equity in your home faster. Then, once you have at least 20% equity in your home, you can request to eliminate the mortgage insurance premium all together. You can also refinance with Embrace, and if your new loan-to-value (LTV) is below the required threshold, you may not have to pay mortgage insurance on your new loan at all.

High interest rates bring higher monthly payments and increase the overall interest you’ll pay over the life of your loan. A low interest rate saves you money in both the short and long term. Sometimes a bigger down payment can help you get a lower interest rate. Keep in mind that the money you pay in interest doesn’t ever go toward paying off the principal, so it’s smart to get the lowest interest rate possible and then pay off your house as quickly as you can.

Rates are complicated and can be tricky to understand. Simply CALL US and we’ll help you compare your rate quotes. We’re happy to take you through estimates line by line — ensuring you know what every item means to you and your bottom line. Comparing mortgage rates can be confusing because there are so many factors — from taxes to title insurance — that contribute to calculating your mortgage payment and closing costs. No one is expected to understand it all from the beginning, but we’ll make sure it all makes perfect sense to you in the end.

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 worst.

In this scenario, the lender is the beneficiary if you default on the mortgage loan for any reason.

How much money you need depends on the type of loan and the purchase price. We recommend that you have at least 3.5% for a down payment on an FHA loan. You’ll also want to be aware of closing costs, which are typically between 2% and 6% of the purchase price. There are also benefits to putting more down in some scenarios – such as the ability to get a Conventional loan without mortgage insurance if you have a down payment of 20% or more.

A typical monthly mortgage payment includes the principal, interest, homeowners insurance, property taxes, and private mortgage insurance (PMI) if you put down less than 20%. You can pay more on your mortgage each month, but make sure you specify that you want the extra money to go toward the principal only (vs. prepaying interest).

The best way to start any mortgage process is with the help of a lender that's 100% on your side — and that's Embrace Home Loans. Simply call 800-333-3004 or fill out our quick, no-obligation and confidential GET A QUOTE FORM now. Your Mortgage Specialist will start working right away to find your ideal mortgage and will be with you every step of the way. This streamlined, personalized approach means the entire process will be as simple and stress-free as possible. In fact, it can all be wrapped up in as little as 21 days after receiving all your documents. There's just no better way to take the next steps toward a better financial future.

Private mortgage insurance (PMI) is an insurance policy that protects your lender in case you default on your mortgage. You may be required to purchase it, especially if you plan to make a down payment of less than 20% of your home's purchase price, which means you have a loan-to-value ratio (LTV) greater than 80%. PMI is purchased through a third-party insurance company and paid via your monthly mortgage payments. How much it costs depends on several factors, but once your LTV is below 80%, you can refinance your mortgage to get rid of the PMI.

Paying discount points means you can lower or “buy down” your interest rate (as well as your monthly payment) over the life of your loan. One point equals 1% of your loan amount. When you pay a point, you are essentially paying part of your interest to the lender up front. So if you have the funds, buying down your rate is a good way to reduce the total amount of interest you’ll pay over time.

Think interest rates are on the way up? Then “locking in“ your interest rate before you close may be a great idea. This simply means your lender "freezes" your interest rate—typically between 15-90 days—before you close.

No, but they are very close. The interest rate is how much it costs to borrow the money from your lender. The APR is the total cost of your mortgage and accounts for additional fees like closing costs, origination charges, lender points, and private mortgage insurance (PMI).