Trevor Curran – Page 9 – Thoughts on mortgages real estate and first time buyers

Erica’s Mom is Harrassing Her to Buy A House!

My Mom is harrassing me to buy a house. She keeps telling me I have to get this $8,000 stimulus refund and I have to close this year!

I met with Erica this evening to prequalify her for a mortgage for a 2 family house she wants to buy in the Bronx. I gave my usual “tcurranmortgage” mini-homebuyer-seminar, not knowing when to shut up and stop talking (that’s why Gary set up this blog when he built my website four years ago; he knows me too well!) as usual.

Near to the end of our visit, I mentioned to Erica that Uncle Sam was going to send her a check for $8,000 for buying her first home this year. Erica responded by telling us, “Yes, I know. My Mom is harrassing me to buy a house. She keeps telling me I have to get this $8,000 and I have to close this year!”

WOW.

YAY to Erica’s Mom! YAY to President Obama and his 2009 Stimulus Package and the $8,000 Refundable Tax Credit!

Just FYI: the tax credit is a truly refundable credit of either $8,000 or 10% of the purchase price of the house (whichever is lower; in NY, that’s going to be the 8k!!!). You don’t have to wait until 2010 to get the cash in your wallet. You can file an amendment to your 2008 tax return and get the money this year. There are restrictions, so be sure to check out the IRS website HERE to verify. You can even download the appropriate filing schedule to bring to your tax professional to file the amendment. Get to it so you can heed Erica’s Mom’s haranguing: GO GET THE MONEY!!!

Thanks Erica for the inspiration for tonight’s blog.

NYS Attorney General Steps Up To Stop “Default Judgments”

I’ve been reading credit reports for 20 years. Often I’ll ask a client the status of a judgment that appears on the credit report. We’ll need an explanation for the derogatory credit account and the judgment may need to be paid and a Satisfaction of Judgment obtained in order to get the client’s mortgage loan approved.

Too often the reaction has been, “What judgment? I don’t have any judgments.” Upon further investigation we come to discover the judgment is real and truly in place against my client. But the client insists she was never served any court papers informing her of a pending court date. At the court date presumably she would have the opportunity to mount a defense of the judgment.

By the time the client finds out about the judgment—in her meeting with a mortgage professional to buy a house, or in the attempt to purchase a car—it’s too late. The client never showed up at court on the appointed date, never had the opportunity to present a defense and lost the case simply by “default” for not appearing. Thus a creditor—usually a collection agency at this point—obtains final and definitive proof that the debtor owes the money. The creditor then has the most potent weapon available to collect on that debt, either by seizing the debtor’s assets (such as a bank account) or forcing payment once the creditor discovers the notorious judgment sometime in the future.

This seems a particularly nasty collections tactic. At some point the debtor in such a case has to settle the debt, even if they had a valid defense in the first place. The debtor is forced to do so either because she is attempting to apply for some new form of credit, or, worse, a bank account has been seized through the enforcement efforts allowed once a creditor has obtained a judgment.

I think of the many cases I have encountered where clearly the debtor did not owe the money. Two examples come immediately to mind.

1. Health Care: Often my client has had for many years a comprehensive health insurance plan. But there appears on the credit report a judgment for some medical collection account that originated with some visit to an emergency room or for some medical test (X-Ray or blood test) that actually would have been covered by the client’s health insurance. Problem is the doctor/hospital assigned the debt to collection before the health insurance plan got around to paying the bill. I know this is the truth, because too many times my client was able to research the debt and get his health insurance to pay it! But the damage is done: the collection account or judgment is on the client’s credit report thus forcing the client to settle the debt and then do the appropriate followup with his health insurance after the fact.

2. Furniture. How do you force a woman to pay $5,000 for furniture she never received? You obtain a default judgment, that’s how! I’ve seen this happen more than once: the client purchases furniture on credit. At some point the order is cancelled, either through immediate action on the part of the client or through action on the part of the client and the furniture store (the furniture wasn’t available in that color or the cancellation was the result of poor delivery practices i.e., damaged goods). Months and months later, the poor client’s checking account is seized by some lawyer for non-payment of the furniture debt thanks to a default judgment. She never had the chance to show up in court with her documentation to prove the furniture was never delivered and thus she shouldn’t have to pay for something she doesn’t own.

NYTimes.com today reports that New York’s Attorney General is taking to task the firms responsible for serving the papers to debtors in these court cases. Apparently it has come to the attention of the Attorney General that these firms never actually get around to serving the papers; the notice of hearing documents often wind up in “the sewer.” Without notification, the client doesn’t show up. If the client doesn’t show up, “Presto!” default judgment is obtained. Nasty, very nasty.

I’m happy someone is finally taking a good hard look at this particularly nasty practice.

U.S. Warns Mortgage Fraudsters Are Eyeing Rescue

Fraudsters typically charge troubled borrowers an up-front fee to help them get relief from burdensome housing payments but fail to deliver any aid.

Mon Apr 6, 2009 12:44pm EDT

WASHINGTON (Reuters) – Fraudsters are using the publicity around foreclosure-prevention plans to lure desperate homeowners into costly scams, the U.S. Treasury Department said on Monday.

As the housing crisis has intensified and the government has hatched several plans to aid troubled borrowers, the number of mortgage scams has mushroomed, several government agencies said at a press conference.

“American homeowners desperately need the relief this program offers, but the very last thing they need is to be taken advantage of as they try to hold on to their homes,” Treasury Secretary Timothy Geithner told reporters.

Fraudsters typically charge troubled borrowers an up-front fee to help them get relief from burdensome housing payments but fail to deliver any aid.

The Federal Trade Commission, a consumer-protection agency, has targeted several fraudulent companies with names that sound as if they are affiliated with the government. A company called “Federal Loan Modification Law Center,” for instance, has been targeted by the FTC for exploiting troubled borrowers.

According to the FTC, the center charged consumers as much as $3000 in cash but did very little work trying to secure new loan terms from the lender.

The Treasury’s fraud investigation unit said that it found nearly 180,000 suspected cases of mortgage fraud between July 2002 and July 2008.

A senior administration official said policy-makers are not concerned troubled homeowners will exploit existing aid programs because sufficient safeguards are in place.

“The focus of the loan modification efforts is going to be on getting people into affordable mortgages. It will be done in a way that requires full documentation of income and quite-stringent data collection,” the official said.

A bigger concern, the official said, is scam artists who would prey on troubled borrowers.

http://www.reuters.com/article/topNews/idUSTRE5354LE20090406?feedType=RSS&feedName=topNews

How-To Make An Offer: Redux 2009

Check out my Re-Posted article on making offers and you, too, can get the home you want at the price you want to pay.

I like to share my professional and personal experience with HomeBuyers. To that end, I created this blog four years ago. I’ve written extensively about the experience of buying a first home, especially with regards to negotiating with Sellers.

As the Spring Buying season gets underway (and it is DEFINITELY doing so as witness recent activity within my market), I thought I might Re-Post one of my blog articles about how-to make an offer to buy your first home. There is a definite process to making an offer as you will see in the article. Not only did I present information from the “old-fashioned” way of buying a home through a Realtor, but I seeded the article with much that I had learned as a mortgage professional. In my experience, this is a technique that is tried and true and it WORKS.

When Buyers ask me, “Hey Trevor, how do I get a sense what the Seller’s “real” price is?” I respond: “MAKE AN OFFER!”

When Buyers like a house but realize it needs updating, or, the house location is great for their needs but the house itself isn’t quite right, thus leading in both instances to a desire to pay substantially less than the asking price, I recommend those Buyers, too, use the Offer technique described in my article.

Too often Buyers look at homes they really like but walk away without making an offer. In New York State, until you sign a contract of sale, you can make as many offers on as many houses for whatever prices as you like without being committed to a danged thing. Use the Offering technique to get what YOU want. In today’s Buyer’s market this technique is useful to get unrealistic Sellers shaken loose from the idea that their home is still worth what it was in 2005.

Try it and you’ll find you get results when you are dealing with what I consider to be “serious” Sellers and Realtors. The method also helps you weed out unrealistic Sellers from your search for a home. It’s true, there are Sellers out there who aren’t serious. By using my offer method you discover quickly and avoid wasting your time dealing with them.

Let’s talk about Realtors for a moment. With the market in such disarray, many, many Realtors have departed the real estate business; they could not earn enough to pay their bills. They have moved on to take salaried jobs elsewhere. You would think this cleansing process would leave only serious real estate professionals, those who are earnest in their desire to adhere to professional standards and ethics. Too, you would think the part-time Realtor, the “dabbler” if you will, couldn’t possibly survive. In both cases your thinking would be wrong. I’m sorry to report that I’m still coming across situations where Buyers are working with less-than-professional-Realtors. Unfortunately, this can affect a Buyer because you don’t get the high quality of professionalism that you deserve. In a difficult market where Sellers are unsure of their course of action the results can be disastrous. The Realtor’s role is to bring Buyers and Sellers together. A seasoned professional does so ethically and with quality sales techniques. The Pro doesn’t use sales “mumbo-jumbo” instead adhering to the idea that a good salesperson listens to the needs of the customer/client and finds a way to satisfy those needs. The Seller wants the best price in a “Buyer’s Market” and the Buyer wants the home they love without over-paying. Quality Realtors make that happen.

My experience with many part-time Realtors is they don’t have the resources to find the right home for their Buyer. Neither do they have the time nor the inclination for lengthy negotiations.

Many of those “Boom-Time” Realtors who made a killing selling homes to anyone with a pulse just don’t care to understand the finer points of being a good salesperson. In an attempt to survive they are still using the methods that sold homes four years ago. For example, I had a Realtor tell one of my clients at an open house that he had “…better hurry up and make an offer because there are 3 other really good offers on the table.” WHAT!?! In this market that cannot possibly be true. That’s “Boom-Time” selling, not Buyer’s Market professionalism.

My Buyer tested the waters using my offering technique. The offer was neither accepted nor countered. We do not believe the Realtor even presented the offer to the Seller, a violation of New York State law. My client’s offer was very reasonable considering the market conditions, their seriousness as qualified homebuyers, and the fact the house needed $30,000 of updates. The Buyer used the offering technique to discern if the Seller was serious about selling the home. Clearly the Seller was not, or, as I suspect, the Seller’s Realtor was a substandard salesperson. The house is still on the market a month later. I guess the other “really good offers” just didn’t work out (if they existed at all).

My client, on the other hand, has gone on to find a superb and experienced Realtor after using my offering method to walk away from a good house with a bad situation.

Check out the article and you, too, can get the home you want at the price you want to pay. As I have often said around the internet after posting advice on one forum or another, “Hope that helps!”

The Miracle Rehabilitation Loan known as the FHA 203k Loan

A fundamental look at the miracle program known as FHA 203k.

So many Buyers today are eager to purchase homes at below market prices. Often these homes are in need of serious repairs or improvements to update the property. The 203k Program handily meets the needs of Buyers today. I personally have originated and closed dozens of these loans back
in the early 1990’s in Harlem and Bedford-Stuyvesant under President Clinton’s Inner City Rehabilitation Initiative. Often we were financing a complete gut renovation of an abandoned Single Room Occupancy (SRO) residence. The Buyers usually paid a price around $50,000 and I would find FHA 203k Financing in the range of $250,000 to cover the purchase and the renovations. Under the provisions of the rehabilitation, the Buyer of such an SRO would convert the Certificate of Occupancy from rooming house to legal 2, 3 or even 4 Family home. The 203k allowed for just such a change and the costs involved, including Architectural fees, Plans and Permits, not to mention the construction costs.

Toay this miracle program allows a Buyer to purchase a home and obtain the monies for repairs or home improvements all rolled into a single loan with a SINGLE monthly FIXED RATE payment. The repairs can cost as little as $5,000 or can run as high as necessary to gut-rehab a home. The limit on
the repair monies that can be included in the loan is the Loan-To-Value (LTV) Limit based on statutory FHA Loan Limits in your area (see below). And this LTV percentage is calculated based on the value of the house AFTER improvements.

The 203k program even has a provision allowing the Buyer to request that up to 6 months worth of mortgage payments be included in the loan so they don’t have to pay two monthly housing
expenses—rent and mortgage—while the house is under construction.

With more and more bank-owned “REO” properties offered for sale, Buyers will need the 203k
Program more than ever before.

203k Interest rates run higher than market, usually about 1% higher, but this is still an ideal program to help Buyers achieve their goals of homeownership while simultaneously updating or renovating a home for the lowest possible cost.

Highlights of the 203k Program:

>Buyer can obtain the cash needed to conduct improvements on a home
purchase folded into the same mortgage loan needed to purchase the house.

>Borrower must qualify according to regular FHA Underwriting criteria with regards to Income, Assets and Credit.

>The Program is only open to Owner-Occupants; no investors permitted. BUT you do NOT have to be First-Time Homebuyer.

>No Income Limits; no minimum income requirements. No geographic limitations, with the exception that the property is here in the good ol’ USA!

Purchase + Improvements = ONE Mortgage and ONE Monthly Payment

Current FHA LOAN LIMITS under the 2009 Stimulus Bill for the New York Metropolitan Region:

1Fam: $729,750

2Fam: $934,200

3Fam: $1,129,250

4Fam: $1,403,400

FHA Basics:

* No Reserves on 1 and 2 Family homes (but it helps!)
* 3 Months Reserves required on 3 and 4 Family homes
* 3.5% Downpayment
* 6% Seller’s Concession
* Credit Scores down to 620 (down to 580 with some Lenders)

There you have a good fundamental look at the miracle program known as FHA 203k.

Do you have questions? Click on ASK TREVOR and I’ll respond to any and all inquiries, even if you’re not buying a home in
New York State.

Check out my Trulia profile HERE

Check out my Zillow profile HERE

Find me on TWITTER: @tcurranmortgage

Happy House Hunting!

FHA Is Good For New York

Given the high hurdles for potential purchasers to overcome with regards to credit and cash in the New York Metro Region, the FHA program eases the path to homeownership.

The FHA is the Federal Housing Administration, a division of the United States Department of Housing and Urban Development (HUD). The FHA has been one of the single best ways for homebuyers to purchase a home since its inception in 1934 under FDR’s New Deal.

FHA guidelines make the experience of homeownership more accessible to more people. The guidelines are designed in such a way as to provide Lenders with more flexibility. The FHA is an insurance program whereby the mortgage loan is insured by the United States government. Further, FHA is the only Federal agency that is totally self-funded; FHA does not take any taxpayer money!

Some of the many wonderful features of FHA Insured mortgage loans:

-Low downpayment requirements: 3.5% of the purchase price

-Purchaser’s can use more of their monthly income to qualify for a loan

-Downpayment can be 100% gifted by a family member or employer

-Credit score requirements are lower than for Conventional loans

-FHA Loans are fully assumable (subject to the new purchaser’s ability to qualify for the loan)

-A Seller can contribute up to 6% of a Purchaser’s closing costs. This is especially useful in the NY Metro region where closing costs average 6%. This allows a potential Purchaser to own a home with a substantially lower cash requirement than Conventional loans. (See Closing Costs In NY for more information about closing costs in NY)

1. Cash requirements lower: If a Purchaser obtains conventional financing with a 5% downpayment, the total cash required on a $475,000 Single Family purchase would be approximately $60,000 (downpayment, closing costs and 2 months PITI reserves). The same Purchaser using an FHA loan would need approximately $20,000 (3.5% downpayment; Seller can pay the Purchaser’s closing costs and no reserves are required).
2. FHA allows for a higher “Debt-To-Income” ratio. Also, FHA allows on a single family or condo that the Purchaser can have Non-Occupying cosignors from the Purchaser’s family assist in qualifying for the mortgage loan.
3. Credit scores lower: FHA does not have a credit score requirement. However, Lenders are permitted to overlay their own Underwriting criteria on FHA guidelines. Currently the credit score standard among most Lenders for an FHA loan is a minimum credit score of 620 (some Lenders go down to 580). For a Conventional loan with PMI (Private Mortgage Insurance) a Purchaser need have at least a 720 credit score.
4. Expanded Opportunity to Purchase: On any given day there are many people wishing to purchase a home who don’t have the money for a large downpayment PLUS closing costs. Living in New York is expensive. For the average New York family earning approximately $100,000 annually to save $60,000 is an extremely difficult undertaking considering the high housing expense and other high cost of living expenses. Saving a $20,000 downpayment is an easier exercise thus making the dream of homeownership more accessible.
5. After Purchase Marketability: The FHA Purchaser in today’s market is effectively locking in today’s interest rate for a future homebuyer in the resale of the home. For example, if a Purchaser of a Single Family home closed today at a 30year fixed rate of 5.375%, that purchaser/owner could conceivably resell the home seven years from now to a person who would assume the FHA loan at today’s rate. If rates are higher in the future, this makes for a more opportune marketing potential.

In conclusion, the FHA program surprises potential homebuyers with its accessibility. These are people who never thought they could own a home. Specifically to the New York market, given the high hurdles for potential purchasers to overcome with regards to credit and cash, the FHA program eases the path to homeownership.

More about FHA and where to find an approved FHA Lending Institution at The FHA Website.

Beware Using Non-FHA Approved Mortgage Brokers

Work only with an FHA approved mortgage broker with a Mini-Eagle or an FHA approved Lender with a Full Eagle.

Since the FHA Insurance program is pretty much the only way to get a mortgage these days, I’d like to caution you against working with any mortgage professional that is not approved by HUD to originate FHA Insured Loans.

The process of obtaining such an approval is difficult and expensive. When a mortgage broker is approved, the office receives what is known as a “Mini-Eagle.” The Mini-Eagle is the permission from HUD to originate FHA loans. A Direct Lender, approved by HUD, has a Full-Eagle.

As we become more and more aware of the excessive lengths some unscrupulous mortgage people will go to in order to make money without paying any attention to legalities, ethics, or professional conduct, we need also understand these same lowlifes will try to jump on any bandwagon in order to make a buck.

Fact is the regulation is in place to prevent anyone from jumping on the FHA bandwagon. That regulation is the Mini-Eagle and Full-Eagle.

FHA does allow in certain instances a Non-FHA Approved mortgage broker to recommend a client to a Full-Eagle Lender and to act as a consultant for the client. This permission is limited to consulting and the fee is limited as to how much the consultant can earn. The consultant is paid by you, the client. Consultant means exactly that: advice, counseling and consulting. The Non-FHA approved mortgage professional cannot originate the loan, cannot write the loan application or become involved in any aspect of the process for loan approval. For that you will work directly with the Lender.

Think of the Non-FHA approved mortgage person as a facilitator who connects you with a Lender, is available to answer your questions and offer advice on the program, but cannot do anything more than that.

Beware of the mortgage people walking around saying, “I can do FHA loans.” More often than not these lowlifes are not FHA approved and they plan on convincing you to doing a loan application with them for an FHA loan. “I’ll find an FHA Lender for you. Sign here.” This is ILLEGAL.

Further, this consultant doesn’t have any real standing in terms of accessing information about FHA products or interacting with the Lender to get your loan processed timely for an approval.

Why should you pay one of these people when you can easily find and work with an approved and experienced FHA mortgage professional?

These folks are just trying to take your money by joining in the current mortgage market opportunity without making the proper professional investment (in time and money) to obtain the proper licensing.

Work only with an FHA approved mortgage broker with a Mini-Eagle or an FHA approved Lender with a Full Eagle. You can find listings of both types of Mortgage Company in your area by visiting www.fha.gov and entering your zip code.

Why You Need To Look At Your 401k Statement

One of the prime methods to getting a mortgage loan approval during the current mortgage-underwriting climate is proving you have reserves: those dwindling 401k accounts might be useful after all.

Mortgage Loans are difficult to obtain these days. Underwriters at Banks are about the craziest I have ever seen in 20 years as a mortgage professional. Arguments over the interpretation of an underwriting guideline—the kind I used to win back in the 90’s—are frequently Cold-War-style standoffs: there is no clear winner, you see it your way, and I see it mine.

Folks think Underwriting a mortgage loan application is some kind of objective exercise. It’s not. Underwriters are human and they are subject to the same day in and day out challenges all the rest of us humans face, with one difference. If the Underwriter is having a bad day, or, in our current market, a BAD YEAR, that Underwriter is making obtaining a loan approval an impossible endeavor.

As a mortgage originator, I have to “pre-underwrite” each and every client’s situation. I have learned to “roll with the punches” as it were to find strengths in any given loan application and help my client get the loan approval for the home they wish to buy or refinance. I’m watching how Underwriters are reacting to market conditions or the directives they are receiving from their bank employers (too often confused and muddled) to gauge the best path to loan approval for my clients.

Thus I look for every little bit of ammunition I can find in order to fight the good fight when I’m prequalifying a client.

One nice bit of artillery is the ubiquitous 401k or retirement account. Underwriters like “reserves” on a loan application. Reserves is the money you have left over after closing on a mortgage loan; it’s the money you didn’t spend on downpayment and closing costs. In the event you experience some life catastrophe in the future, like a job loss, you can use the reserves to pay your mortgage every month while recovering from said catastrophe (finding another job).

Reserves are required for two months’ worth of mortgage payments for Conventional (Non-Government) financing. The FHA does not require reserves for 1 or 2 family home financing; 3 and 4 family homes require 3 months’ reserves. Those are the guidelines, but let’s talk about getting your loan approved during the toughest mortgage underwriting era I’ve ever seen. Reserves count a lot; the more you have, the higher the probability of a loan approval, especially if your application is weak in any of the other areas of loan underwriting (IAC, or Income, Assets, Credit).

Often, my clients come to me for prequalification with their standard documentation in hand: paystubs, Tax returns, bank statements. I always request but never seem to encounter proof of any retirement accounts, like 401k statements. And when I ask my clients, “Okay, you don’t have the statement with you, but how much is in your account right now?” I am often met with blank stares.

Folks just don’t know. Considering how much money they may have lost in those retirement accounts in recent months, they don’t want to know.

I understand a lot of us don’t want to face the bad news of dwindling retirement funds due to markets falling and investments failing. But you need to open up that 401k statement if you’re planning on applying for a mortgage. Those monies, eviscerated by market forces though they may be, can be very useful on a loan application.

In fact, I’d be so bold as to say that right now, one of the prime methods to getting a mortgage loan approval is proving you have reserves. So get out those statements this chilly Sunday afternoon and face the music. Put your 401k statment together with your other documents you’ll need for the loan application. Doing so might be the difference between getting a mortgage approval, or not.

FHA: Mortgage Solution for 2009

The FHA program was created to make it easy for families to acquire their own homes. I say this often these days, “The FHA is the ONLY game in town.”

When I started in the mortgage business in 1989 I was introduced to the FHA Insured mortgage loan. As a Mortgage Banker, the loans I made were typically FHA as this had long been the province of mortgage bankers in general.

During the Sub-Prime “Boom” I found myself often confronted with clients who, in my professional opinion, were prime candidates for FHA financing. The problem with the boom times and FHA was simple: there is a limit to FHA loan amounts, and during the boom, those limits were far below what was needed in the marketplace. FHA loan limits had not kept up with market price advances.

Now, the FHA limit here in the NY Metro region is $625,500 for a single family home. This is something we can work with.

The FHA loan program was created in 1934 during The Great Depression as part of the New Deal. The concept was simple: turn a nation of renters into a nation of homeowners. At the time, 70% of the United States population rented. The FHA program was created to make it easy for families to acquire their own homes. To this end, the FHA was spectacularly successful.

I like that there is so much rich American history associated with the FHA. I have always loved helping my clients obtain their dreams of homeownership with the FHA program. And I am thrilled that during these terrible economic times the FHA has once again come to the forefront to create possibilities of homeownership. I say this often these days, “The FHA is the ONLY game in town.”

And I like that.

I’ll write more about FHA, in the meantime, visit FHA’s website for more information about this wonderful loan program.

Tax Time: A Journey to getting your MONEY.

Use tax time to get in touch with your money; you can get more of it in your pocket by working with a competent tax professional and by knowing the fundamentals of IRS regulations.

I sat with a family last night preparing to buy a home. I sifted through the documents needed for the loan approval process, paystubs, bank statements, 401k account statements, credit report. Finally I came to the clients’ tax returns.

Mom and Dad have their annual returns prepared by the same tax professional they have used for more than twenty years. I reviewed the documents and thought the returns were adequately prepared.

Then I reached for the Son’s tax returns. HoooBoy. There as I reached across their dining room table was that infamous “green and white” folder. I won’t mention the name of the national service (well-advertised on television and elsewhere), only will I state that when I see that infamous folder, a shiver runs down my spine (the kind you get when you read a really scary Stephen King story late at night).

What followed was some stern talking to by me to the Son. “First thing you’re going to do when you buy your home is meet with your Mom and Dad’s accountant. You will no longer visit the folks who gave you that green and white folder.”

I went on to advise him to bring his previous three years’ returns to Mom and Dad’s accountant when he goes there in a few weeks to have his 2008 returns prepared. The IRS allows us taxpayers to revise our returns up to three years back if we feel we missed some deductions and may be entitled to a larger refund than was originally issued.

Having seen many returns stapled into those green and white folders over the years, I knew there was a REALLY good chance my client could amend one or several of his previous three years’ returns and get some more money back from Uncle Sam.

I also told him, since they are soon to buy a home, that he needs to consult with the accountant in the area of getting a lower refund after he buys a home. Instead of waiting for a refund, he should lower the tax deductions from his weekly paycheck thus enabling him to bring home more money. Uncle Sam still gets his fair share (the IRS allows us to change our withholding as many times throughout the year as we feel is necessary as long as we are meeting our tax liability), and my clients—soon to be Homeowners—get more liquid cash every month to help make the experience of buying their first home a happier one.

More money in your pocket every month when you own a home seems to be a pretty good path to happiness to me, no?

The advice I gave these clients is important as you learn to watch out for your money. Use tax time to get in touch with your money; you can get more of it in your pocket by working with a competent tax professional and by knowing the fundamentals of IRS regulations.