When applying for a mortgage loan, you will receive a Good Faith Estimate (GFE) from each lender you apply with. This is your tool to compare fees and make an informed decision. Here are some tips to help you accurately read the form:

Points and Lender Fees

Near the top of the quote, you will find charges specific to the lender, i.e. origination points, processing fees, credit fees, etc. This is a good place to compare your lenders. If lenders are offering you the same rate, the one with the lowest charges in this area is often the best lender for you.

Taxes and Insurance

Below the lender fees you will find the section that includes your real estate tax and insurance costs. This section also highlights projected prepaid interest. These costs should be the same no matter what lender you choose; therefore, you will want to evaluate how conservative or liberal each lender is with what they are quoting here. This is a section that lenders will often undercut to make their quote seem more competitive.

Title and Miscellaneous Fees

Below the aforementioned tax and insurance quote, you will generally find a quote for title insurance, deed recording, document preparation, transfer tax and other state and local taxes. Although you will likely be told that these fees are fixed costs, many of them are arbitrary depending on what title company handles your settlement. Remember, you have the right to choose a title company with lower fees than the ones quoted by your lender.

You will also want to note the interest rate, term, and whether or not your rate is fixed or adjustable. Remember, you should always obtain more than one estimate, and you should understand that these fees represent “estimates” that are likely to fluctuate some at closing.

Recommended Online Mortgage Lenders – We maintain a list of low rate mortgage lenders and update the list frequently. Try applying with one of our recommended lenders first. Tips For Getting a Mortgage Loan with Bad Credit- Read this article to learn some tips on getting approved for a mortgage loan with bad credit.

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Before Congress went on recess for the holidays, it passed a new tax break for middle-income taxpayers who plan to purchase a home in 2007. The tax break, neatly sandwiched in an omnibus tax bill, allow new homeowners to claim a deduction on their mortgage insurance premiums.

Many home buyers cannot afford to make an initial down-payment of 20% of their home value and are thus subject to paying home owners mortgage insurance, an insurance designed to protect banks from home owners that may default on their payments. Mortgage insurance is estimated to be about $75.00 a month on a $180,000 home, or just about 1% of the mortgage.

The Mortgage Insurance Companies of America, a trade group for private mortgage insurers, estimates that the tax deduction will save homeowners approximately $300 to $500 a year on taxes. There are some caveats, however:

For one, the deductions will expire at the end of 2007 unless congress is pressured to extend it, which is very likely. In addition, only homeowners with adjusted gross income of $100,000 (middle-income taxpayers) or less qualifies for the deduction. Moreover, if you are paying homeowners insurance on an existing home you probably will not qualify for the tax deduction. It remains available explicitly for new home mortgages issues after December 31.

Home owners who refinanced their mortgages after December 31 are also qualified for this tax deduction in so far as the amount being refinanced exceeds not the amount of the original loan, states Jeff Lubar, of Mortgage Insurance Companies of America.

Tax deduction on mortgage increase was not the only tax break that Congress enacted before taking a holiday recess.

Teacher’s classroom expenses tax deduction was extended allowing teachers and others in the education arena to deduction up to $250 in classroom expenses that they purchase with their personal cash. The CCH reports that over 3 million taxpayers claimed the deduction in 2005.

Deduction for state and local taxes, which expired in 2005, was resuscitated until 2007. This gives taxpayers the option to deduct sales taxes instead of state income taxes on their federal returns. This, however, is more frequently used by taxpayers in states with no income tax.

With tuition cost rising higher than inflation, it was indeed good news for many students for Congress to extend a deduction of up to $4000 for college tuition, books and related cost. To qualify for the full tax deduction single taxpayers must have an adjusted gross income of up to $65,000 and married couples with an adjusted gross income of $130,000 or less. Single taxpayers with an adjusted gross income of $80,000 or less and married taxpayers with an adjusted gross income up to $160,000 can deduct up to $2000.

Earnest Young is an accounting and tax writer for http://www.accentaccounting.net/. Earnest Young is an accounting and tax writer for http://www.accentaccounting.net

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