In its annual campaign, the IRS and its partners are reminding working people who don’t make great money they might qualify for the Earned Income Tax Credit.

But they have to claim the credit designed to ease the burden of low- and moderate-income workers and families, and one in five who qualify don’t, according to the IRS.

In Utah, the average EITC tax refund was $2,179 last year.

IRS Commissioner Doug Shulman said: “The EITC provides a financial boost for millions of hardworking Americans. But people can easily overlook this important credit, especially if their financial situation has changed.” That can include a change in jobs or financial status, or marital or parental status.

People earning $49,078 or less from wages or self-employment can qualify. Refunds can be $464 for people without children all the way up to $5,751 for those with three or more children.

People can get take advantage of the EITC even if they owe no tax. But they have to file a tax return even if they’re not required to do so, according to the IRS.

In most cases the tax credit does not affect welfare benefits nor does it count when people’s eligibility is determined for Medicaid, Supplemental Security Income, food stamps or subsidized housing.

If you are working to rebuild your credit and raise your FICO, getting a larger tax refund could really help to pay down bills or credit cards. To see if you qualify for the EITC go here.

Thanks to http://www.kitsapsun.com for the information used in this post.

While the national economic future remains tenuous, Herbert said, the Utah economy surges ahead. The unemployment rate continues to steadily fall and the state currently has the second-fastest rate of job creation in the nation. And again, Forbes magazine named it the best place in the nation for business, he said.

From Forbes:

Utah repeats this year as Forbes Best State for Business and Careers in our sixth annual look at the business climates of the 50 states. No state can match the consistent performance of Utah. It is the only state that ranks among the top 15 states in each of the six main categories we rate the states on.

Utah highlights include energy costs 31% below the national average and employment growth that has averaged 0.6% the past five years. Compare that to the U.S. as a whole where job growth has averaged negative 0.6% since 2005. Utah’s 5% corporate tax rate is well below western neighbors Arizona, Idaho and New Mexico. Utah ranks sixth in a new Tax Foundation study that looks at the tax burden on business in each state across different industries.

Businesses are getting the message on Utah. Procter & Gamble, ITT, Home Depot and Boeing all announced expansions in Utah this year. The Goldman Sachs office in Salt Lake City is its second biggest in the Americas with more 1,000 employees and significant expansion expected over the next four years.

Technology companies particularly have had Utah on their radar as an affordable alternative to California with overall business costs in Utah 10% below the national average. Adobe Systems, eBay, Electronic Arts and Oracle have all expanded in Utah in recent years.

Companies are also attracted by Utah’s population growth which is one of the fastest in the country and provides a burgeoning workforce. “Utah has a young, dynamic economy with a vibrant high-tech sector,” says Mark Zandi, chief economist of Moody’s Analytics.

The Utah story is far from over. Job growth is projected to be 2.4% annually through 2015 according to Moody’s, sixth best in the country.

Thanks to Forbes.com and KSL.com for the information for this post.

• Stay at home more instead of hanging out with friends at restaurants, clubs and coffee houses. Besides saving big bucks by cooking your own meals and drinking that wine or coffee at home, you will save on the cost of gas.
• Create some intimate get- togethers at your place and pocket the savings. One way to spread the cost out without diluting the fun is to make your party a pot luck event, or make a big pot of chili rather than filets.
• If you do go out to eat, try eating something light before dining out and order a small salad or appetizer and spend less.
• Go meatless a few times a week. There are fabulous meals you can make that will satisfy and save you some green at the same time. Try some recipes using quinoa, a super grain high in complete protein, meaning that it supplies all nine essential amino acids.
• With the money you are saving by staying home more and eating less meat, pay down your credit card balances to pay less in interest and boost your credit score.
• Turn to cash. Write down your projected expenses and set the cash aside for each expense. Don’t buy anything you don’t have the cash for. Save for those purchases.
• Instead of buying books or books on tape, check them out at your local library. Libraries offer frugal entertainment options with their extensive selection of books and cds.
• Did you receive a gift you already have or just can’t use? Try swapping. Swap.com brings together interested swappers who can trade music, books, electronics, clothes and unused gift cards.

Try some of these suggestions and get control of your pocketbook. You will be glad you did.

For those situations, we are happy to refer people to Premier Credit Consulting. Premier Credit offers a realistic, legal and effective approach to restoring credit problems. They get excellent results for our clients who require a more hands on solution for their credit needs. Feel free to call Josh at 801-747-1210 to talk about whether this may be the solution for your situation or drop him an email.

“What factors determine the interest rate I’ll be offered on my loan?”

If you’ve decided to buy a home or refinance your mortgage, you may be puzzled by the different interest rates you’ve seen advertised for home loans. You’re not alone: Many home buyers and homeowners are confused when they discover they don’t qualify for these rock-bottom interest rates.

The reality is that the interest rate you’ll pay on a loan is determined largely by your own personal situation. Even if you don’t meet the requirements for the best-of-the-best rates that you’ve seen advertised, that doesn’t mean you won’t be able to qualify for a loan or won’t be offered an attractive interest rate that you’ll be able to afford.

The interest rate you’ll be offered will depend on:

• Credit score. Your credit history and credit score will have the greatest effect on the interest rate you’ll be offered. The higher your score, the lower your interest rate likely will be. A credit score is a numerical representation of how well you’ve handled other loans and credit cards in the past.

• Type of property. The interest rate you’ll be offered also depends on the type of property you want to purchase. You’ll generally pay a higher interest rate to buy a second home or a property you want to rent out to tenants than you will to buy a home you intend to occupy yourself.

• Loan term. Interest rates tend to be higher on 15-year loans than they are on 30-year loans. That means you’ll likely be offered a higher rate if you choose the shorter term.

• Loan amount. If you want to borrow more than $417,000, your mortgage may be considered a non-conventional or even “jumbo” loan, in which case, you’ll pay a higher interest rate due to the larger loan amount.

• Loan-to-value (LTV) ratio. Your loan-to-value ratio is the total amount of your mortgage divided by the appraised value of your home or the home you want to buy. If you have only a small downpayment, or not much equity, you’ll likely pay a higher interest rate. Taking out cash can  raise your interest rate as well.

• Location. Interest rates vary from lender to lender and from state to state. Some states simply have lower borrowing costs on average.

When you compare the interest rates you’re offered with advertised interest rates, keep in mind that some advertised rates require payment of discount points, which makes those rates appear to be cheaper than they actually are. A point is an upfront fee that’s equal to 1 percent of the loan amount. Points don’t directly influence the interest rate you’ll be offered, but you can pay points to reduce the interest rate on your loan.

For more information, don’t hesitate to contact our office today!

To read get more information about what credit scores can do to your mortgage interest rate, read Today You Need EXCELLENT Not Good Credit! And to learn nine steps to boost your credit score, read Nine Credit Magic Tricks.

Copyright© 2011 JLM Industries. All Rights Reserved

Although mortgage delinquencies were expected to continue to drop, the Q2 2011 TransUnion data released today shows mortgage delinquency rates improved on a quarterly basis by 5.98%, more than any time since the recession officially ended two years ago.

“While relatively low home prices and high unemployment continue to exert upward pressure on delinquency rates, they are more than offset by the impact of more conservative lending policies reflecting consumers with higher credit scores,” said Tim Martin, group vice president of the U.S. Housing Market in TransUnion’s financial services business unit. “Not only are these consumers less likely to default if house prices continue to edge downward throughout the year, but their willingness to repay their debt obligations in the face of high unemployment rates is greater. It is because of these dynamics that lenders today take a much closer look at the borrower’s income history and overall debt situation than before the recession began in 2007.”

The part of the article that most effects our credit coaching clients is: “While relatively low home prices and high unemployment continue to exert upward pressure on delinquency rates, they are more than offset by the impact of more conservative lending policies reflecting consumers with higher credit scores.” Did you catch that? What this says is that banks have much more conservative lending policies and are looking to lend money to consumers with high credit scores. This  is why it is imperative that you clean up your credit. Please contact us to get started on the road to great credit.

Read the Full Article

For the government’s position on QRM, click here. For the other side of the debate, click here.

We do not want to enter this debate today. Instead, we just want to shed some light on the increased cost a buyer should expect under the new guidelines. The fact that it will cost a purchaser more is not argued by either side. The only question is the extent of the increase.

The most complete study we could find on this issue was JP Morgan’s 55 page report on Securitized Products. According to their research, in order to entice lending institutions to replace government lending, mortgage interest rates could increase 3%.

“…in this new world of higher capital requirements, mortgage rates would need to rise by more than 300 basis points (3%) from current levels…”

That’s assuming the banks would be looking for the same returns they normally receive. The report went on to say that perhaps the banks would be satisfied with a smaller return.

“This is not to say that the new capital requirements will necessarily drive interest rates 3% higher…the mortgage rate impact could be anywhere from 1% to 3% higher.”

Let’s assume the eventual increase in mortgage rate is 2% (the middle of that 1% – 3% window). What impact would that have on a purchaser?

Today, interest rates are approximately 4.5%. A two percent increase would bring them to 6.5% which happens to be about where they were prior to government intervention. On a $200,000 mortgage, a buyer’s monthly mortgage payment (principle and interest) would go from $1,013.37/month to $1,264.14/month.

That is an additional $3,009 each year and a total of $90,277 over 30 years.

Bottom Line

It doesn’t matter which side of the QRM debate you are on. If you are considering the purchase of a home, waiting could be expensive if lending costs do increase.

Thanks to our friends at KCM blog for this article.

As of April 1^st 2011 Fannie will be increasing these loan level price adjustments for borrowers that fall into these higher risk loans.  However as most of you know, our clients don’t borrow directly from Fannie Mae or Freddie Mac, they borrower from Citywide Home Loans, Wells Fargo, Bank of America, etc.  These banks have started charging these loan level price adjustments this month, because they know it might take several months for Fannie or Freddie to purchase these loans and they don’t want to be shorted when they sell the loans.

To read the rest of this article click here.

He was distraught when I alerted him that his credit score was below the minimum threshold for Physician and Doctor home loan programs. Luckily we were able to do a little credit magic and get the scores up high enough for an FHA mortgage; in the end he’ll still get his home and an interest rate around 4.50%.

These things happen, what’s important is to get going on your application early, allowing as much time as possible to fix anything you are unaware of. If you are interested in increasing your credit score in preparation for your next home purchase, check out my article Nine Credit Magic Tricks. It’s short and sweet but gives you everything you need to know to get your credit score up in a hurry.

If you are a Physician looking to buy a home in Utah, please visit my website http://www.utahphysicianhomeloan.com/ dedicated to helping Medical Professionals get financed through specialized mortgage underwriting and understanding of their unique situations.