Welcome to the best source of information for mortgages, refinancing, and getting the best rates for your loan!
Check out these great articles:

Before You Start Looking for a Home...

Thinking about tapping into your equity? Which way is best?

Thinking About Buying your First Home

Using Your Home's Equity to Consolidate Debt

Getting a Home Equity Line of Credit

Home Equity Line of Credit: The Facts

Home Improvements That Pay Off

Homeowner Tax Tips

Interest-Only Refinancing, What You Should Know

How Market Conditions Affect Interest Rates

The Scoop on Pre-Qualified vs. Pre-Approved

Thinking About Purchasing a Home?

Refinancing: Questions & Answers

Before You Start Looking for a Home...

What kind of home do you want or need?

Before you get out there and start looking at houses, it's a good idea to determine not only what you want in a house but also, more importantly, what you need. It focuses your house hunting, and saves you valuable time by only looking at houses that meet your criteria.

Here are some things to think about as you set your priorities:

Where do you want to live?

Do you want to live close to your family or as far from them as possible? What kind of schools do you want your children to go to? How important is it to you to be close to shopping, work, hospitals, entertainment, community amenities? Is the amount of traffic important to you?

Looking for a house really starts with looking for a neighborhood. Deciding where you want to live will save you a lot of time as well as miles on your odometer and is the key to narrowing your search for a home.

How long do you expect to live in your new home?

If you plan on living in your new home for only a few years, or if you don't have children, then proximity to schools may not be an issue, but resale value may be. On the other hand, if you have a family and plan on staying put for ten years or more, schools and home size will be priorities.

What don't you like about where you're currently living?

Making a list of what you definitely do not want in a home will help you weed out homes without having to waste your valuable time looking at them.

What’s your lifestyle like?

Do you entertain a lot? Then you'll want a home that lends itself to that. Do you work from home? You'll need a home with a place to create an office. Are you a gardener? Then lot size is a priority.

Keep these things in mind as you make your list of home wants and needs. And remember, your list needs to be flexible in case you can't find a home in your price range with all the amenities you want. It's a good idea to put the list in order of importance. For instance, an eat-in kitchen may be more important to you than a fireplace.

How much home can you afford?

Few things are more frustrating than falling in love with a home only to discover that it's not in your price range. The best way to know how much you can afford is to find our how much money you can qualify to borrow.

There are two things you'll want to consider doing even before talking with a home loan expert about how much you can afford to borrow:

1. Check Your Credit

Check your credit by getting a copy of your credit report. Your credit report determines your credit score, which is needed for qualifying for a home loan. Order your credit report from the three major credit bureaus, check them carefully for discrepancies and errors, and have each bureau clear any errors from your report.

2. Know Your Monthly Payment Amount

Be sure to calculate how much of a monthly mortgage payment you're comfortable paying. You may qualify for a loan amount that would require a higher monthly payment than you'd like to pay. Sit down and figure out your monthly expenses for a new home. Remember to include items such as maintenance, home improvements, taxes, insurance, and association fees if applicable.

Mortgage Basics

Simply put, a mortgage is a loan you take out to finance the purchase of your home. It's also a legal contract stating that you promise to pay back the loan on a monthly basis. Your monthly payment typically goes toward interest, taxes and insurance as well as the loans principal.

There are literally hundreds of variations of mortgages. Fortunately, there are just a few basics you need to know in order to understand most of them.

Fixed-rate mortgages have a fixed interest rate over the term of the loan. By far, most mortgages are fixed-rate mortgages. The main advantage of a fixed-rate mortgage is that your monthly payment never changes. The disadvantage is that if interest rates fall below your fixed-rate, and you want to lower your rate and consequently your mortgage payment, you'll have to refinance.

Adjustable-rate mortgages (ARMs) start with a lower interest rate than a fixed-rate mortgage for an introductory period—typically 1, 3, or 5 years. After that, the rate adjusts, usually annually, based on a pre-determined index. An ARM is a good choice if you're expecting to live in your home for less than five years and can also help you qualify for a larger loan.

The term of your mortgage is the number of years you have to pay back the loan. Most people opt for 30-year terms, but 10-, 15-, 20-, and 40-year terms are also available.

The down payment is the difference between how much you borrow and the purchase price of your home. And, in spite of what most people think, you don't need a big down payment to buy a home. There are many low and even zero down payment loans.

Get approved for your home loan before you shop

Why apply for a mortgage when you haven't even started looking for a house yet?

You’ll be in a better position to negotiate because the seller knows that you're already approved for your mortgage and that your offer is good. Having an approval gives you these advantages as a buyer:

• You know exactly how much home you can afford, eliminating the guesswork.
• You're in a better position to negotiate a lower purchase price because the seller knows your offer is good.
• Once the appraisal and title work's been done, you can close on a home in days, not weeks, potentially saving the seller a lot of money—another bargaining chip.
• You're a virtual cash buyer—it's like shopping for a home with the money in your pocket.

Thinking about tapping into your equity? Which way is best?

Looking to tap into your home’s equity? There are several options, and a few things to consider, when deciding which right for you.

If the interest rate on your mortgage is higher than current rates, it may make sense to refinance and take a lump sum of cash from your home’s equity. You'll simply refinance your mortgage to a larger loan amount and take the difference in cash.

Another option is a home equity loan.  A home equity loan is essentially a second loan that you take out in addition to your first mortgage. Commonly referred to as a "second mortgage," a home equity loan allows you to tap into your home equity to get cash without refinancing your first mortgage. A home equity loan is a good choice if you'd like your cash in a lump sum and you already have a great rate on your first mortgage.

A home equity line of credit (HELOC), your third option, is very similar to a credit card except that it uses the equity in your home as the revolving line of credit. You make monthly payments only if and when you use the money.  But, unlike credit cards, the interest is usually tax deductible.* With a HELOC, you can get a lump sum at closing, or elect to take only part of your money and draw on the rest when you need it. Unlike a home equity loan or a refinance, you can get a home equity line of credit in as little as ten days. A HELOC is a good choice if you'd like ready access to your home equity when you might need it.

Thinking About Buying your First Home

If you're a renter and thinking about purchasing a home, there are several things to consider:

How long do you plan on living in the home?

If you purchase a home and then get a job transfer or decide to move after only a short time, you may end up paying money in order to sell it. The value of your home may not have appreciated enough to cover the costs that you paid to buy the home and the costs that it would take you to sell your home.

The length of time that it will take to cover those costs depends on various economic factors in the area of the home. Most parts of the country have an average of five percent appreciation per year. In this case, you should plan on staying in your home at least three to four years to cover buying and selling costs. If the area where you buy your home experiences an economic upturn, the length of the time to cover these costs could be shortened, and vice versa.

How long will the home meet your needs?

What features do you require in a home to satisfy your lifestyle now? Five years from now? Depending on how long you plan to stay in your home, you'll need to ensure that the home has what you'll need. For example, a two-bedroom dwelling may be perfect for a young couple with no children. However, if they start a family, they could quickly outgrow the space. Therefore, they should consider a home with room to grow. Could the basement be turned into a den and extra bedrooms? Could the attic be turned into a master suite? Having an idea of what you'll need will help you find a home that will satisfy you for years to come.

How is your financial health, including  your credit?

Is now the right time financially for you to buy a home? Would you rate your financial picture as healthy? Is your credit good? While you can almost always find a lender to lend you money, solid lenders are more skeptical if your credit history is not so good. Generally, a couple of blemishes on a credit report won’t affect you that much and you will be considered a good credit risk, qualifying for lower interest rates. If you have more than a couple of blemishes on your report, lenders like Quicken Loans may still provide you with a loan, but you may just have to pay a higher interest rate and fees.

Some say that you should refrain from borrowing as much as you qualify for because it is wiser not to stretch your financial boundaries. Another school of thought says you should stretch to buy as much home as you can afford, because with regular pay raises and increased earning potential, the big payment today will seem like less of a payment tomorrow. This is a decision only you can make. Are you in a position where you expect to make more money soon? Would you rather be conservative and fairly certain that you can make your payment without stretching yourself financially? Make sure that whatever you do, it's within your comfort zone.

To determine how much home you can afford, go online and use a home affordability calculator. It will give you a range of what you may qualify for. While some may say that the "28/36" rule applies, in today's home mortgage market, lenders are making loans customized to a particular person's situation. The "28/36" rule means that your monthly housing costs can't exceed 28 percent of your income and your total debt load can't exceed 36 percent of your total monthly income. Depending on your assets, credit history, job potential and other factors, lenders can push the ratios up to 40-60% or higher. While we're not advocating you purchase a home utilizing the higher ratios, its important for you to know your options.

Where will the money for the transaction will come from?

Typically, homebuyers will need some money for the down payment and closing costs. However, with today's broad range of loan options, having a lot of money saved for a down payment is not always necessary, if you can prove that you are a good financial risk to a lender. If your credit isn't stellar but you have managed to save 10-20% for a down payment, you will still appear to be a very good financial risk to a lender.

Do you know about the ongoing costs of home ownership?

Maintenance, improvements, taxes and insurance are all costs that are added to a monthly house payment. If you buy a condominium or a town home, in certain communities a monthly homeowner's association fee might be required. If these additional costs are a concern, you can make choices to lower or avoid these fees. Be sure to make your realtor and your lender aware of your desire to limit these costs.

Using Your Home's Equity to Consolidate Debt

Sometimes it makes good financial sense to use the equity in your home to consolidate debt like credit cards, student loans, and medical bills.

Depending on your financial goals, you may want to:

• Lower your total monthly debt payments
• Pay off credit cards with high interest rates
• Simplify by consolidating many small debt payments into one
• Reduce the interest rate on your high-interest debt
• Turn the interest you pay into tax-deductible* interest

There are a three ways you can access the equity in your home to consolidate your debt:

1. A "cash-out" refinance
2. A home equity loan
3. A home equity line of credit

Cash-out Refinance

When you refinance to get cash out, you're refinancing your mortgage to a loan amount more than you currently owe and taking the difference in cash. Depending on your current interest rate, you may also be able to lower your monthly payment and get cash to pay off other debt at the same time.

Home Equity Loan

A home equity loan is another loan on your home that taps into your equity. Commonly referred to as a "second mortgage," a home equity loan allows you to turn your equity into cash without refinancing your first mortgage—and usually in less time than it would take to refinance your first mortgage.

Home Equity Line of Credit

A home equity line of credit is very similar to a credit card except that it uses your home’s equity as the revolving line of credit. You pay only if and when you use the money. You can get a home equity line of credit in as little as ten days.

When you use the equity in your home to consolidate debt, consider cutting up your credit cards and keeping one for emergencies only.  And if you increase your monthly cash flow by consolidating debt, think about using the extra money you now have to save or invest for retirement or to pay down your other debt faster.

* Please consult your tax advisor.

Getting a Home Equity Line of Credit

Consider getting a home equity line of credit with your mortgage. Here's why:

Credit cards are a good thing, but a home equity line of credit is even better.

A credit card is a revolving line of credit that you use when you need it, and make payments only if you use it. But credit cards can come with a high price — sky-high interest rates.

A home equity line of credit is also a revolving line of credit that you use when you need it, and make payments only if you use it. But, unlike most credit cards, the home equity line of credit comes with a low price — rock-bottom interest rates.

And, unlike credit cards, the interest paid on a home equity line of credit is usually tax-deductible.*

Two for the Price of One

It can make sense to take out a home equity line of credit at the same time you get your mortgage, or when refinancing your current mortgage. It's easy to see why:

• One simple closing for both mortgage and line of credit
• Up to $100,000 line of credit
• Low interest rate
• Make payments only if you use the money
• Revolving line of credit
• Low closing costs**
• Interest paid may be tax deductible*

* Consult your tax advisor.

** Some states require the payment of taxes based on the mortgage amount.

Home Equity Line of Credit: The Facts

A home equity line of credit is a great way to finance home improvements, pay off high-interest debt, finance a car, pay for college tuition or buy a second home.

What Is a Home Equity Line of Credit?

A Home Equity Line of Credit works essentially the same way as a credit card, except that you borrow money from the equity in your home, instead of from a credit card company.  With exclusive options like Quicken Loans’ Home Equity Line of Credit, you can make interest-only payments for the first ten years, greatly reducing your monthly payment. 

How a Home Equity Line of Credit Works

• Your interest rate and annual percentage rate (APR) are typically calculated based your credit score, and the combined loan-to-value ratio (CLTV)
• Your CLTV is determined by totaling balances of any current loans and the amount of the loan you are requesting.  This number is then divided by the value of your home. Generally, the lower CLTV ratio you have, the lower your interest rate and APR will be.
• The interest rate and APR are adjustable. A change in your APR will change your minimum monthly payment.
• Your rate adjusts as the result of an index plus a margin. The index is the Prime Rate as published in the Wall Street Journal at the time of the adjustment period. The margin will be determined at the time of your application. The index can change, but the margin will not.

Applying for a Home Equity Line of Credit

Here is a list of things to keep in mind if applying for a Home Equity Line of Credit:

1. The lender will ask for some basic information about you, your income, the property, and your Social Security number (to obtain a copy of your credit report).  Lenders like Quicken Loans can approve you right over the phone and even schedule your closing online.
2. The amount you’re approved for is typically the maximum amount you’re allowed to borrow based on the amount of equity you have in your home and your ability to repay the loan.
3. Because there is generally less paperwork involved, closing on a home equity line of credit is much quicker than a standard mortgage.  You should be able to close your line of credit, and receive a check, in as little as 7-10 days.
4. Closing fees are generally required.  These fees can include things like city, county and state recording fees and taxes, and depending on the state you live in, you may also be charged attorney fees. These closing fees can either be deducted from your line of credit or you can bring a cashier's check to pay for them at closing.

Home Improvements That Pay Off

One of the smartest things you can do with your home's equity is to put it right back into your home. It's a clear win-win: You enjoy the benefit of an improved living environment and tangibly enhance your home's value at the same time.

But not every project will increase the resale value of your home. It's best to stick with the ones that will give you the biggest return.

Here's how Remodeling Magazine rates top jobs in terms of one-year return on investment (ROI):

Project                                       ROI                    Average Price Tag

Minor Kitchen Remodel                88%                   $8,655

Second-story Addition                  83%                   $73,553

Bathroom Remodel                     81%                   $9,135

Bathroom Addition                      81%                   $13,918

Family Room Addition                 75%                   $30,960

Major Kitchen Remodel                71%                  $31,090

Deck                                         55%                  $8,022

Improvement Tips:

Don't over improve. It's difficult to recover the investment in a home that is already more valuable than most others in the neighborhood.

Keep whimsy in check. Eclectic tastes likely won't appeal to mainstream homebuyers.

Homeowner Tax Tips

Deducting Mortgage Interest

Mortgage interest on a home is usually fully tax-deductible. You can deduct interest on multiple mortgages, as long as they do not exceed $1 million. The purpose of  the mortgage must specifically be to buy, build or improve a home.

Your lender should send you a “Form 1098” that details how much mortgage interest you paid for the year. To claim this deduction, you should fill out Schedule A, labeled “itemized deductions,” and record your interest deduction.

Late payment charges also may be deducted as home mortgage interest, if it is not for a specific service received in connection with your home loan. The same is true for mortgage prepayment penalties—if you pay off your mortgage early and incur a prepayment penalty, you can deduct that penalty as home mortgage interest (subject to the same requirements for late payments).

Deducting Real Estate Taxes

Real estate taxes, which are annual taxes based on the assessed value of a property, also are tax-deductible. Your interest statement may list the amount of real estate taxes you paid if your taxes and homeowners' insurance were placed in an escrow account when you closed on your mortgage. If your real estate taxes aren't included on the statement, you could review your cancelled checks to find your total real estate tax amount.

Deducting Loan Points Paid on a Purchase

The points you pay on a purchase mortgage are deductible the year you made the purchase. You can deduct any points you paid — and that a seller paid on your behalf* — if you meet the following criteria:

• The loan is secured by your primary residence and the loan was used to buy, improve or build the home;
• Paying points (and the amount of points paid) is not an irregular practice in the seller's geographic area;
• The points are computed as a percentage of the loan principal;
• The points are clearly delineated on the buyer's settlement statement; and
• You put cash into your home purchase in an amount at least equal to the points you were charged.

*Seller-Paid Points are Deductible by the Buyer

When a seller pays points for the buyer (or, in other words, buys the mortgage rate down) the buyer gets a lower mortgage rate. The cost of those points is deductible for the buyer.

Deducting Loan Points Paid on a Refinance

If you refinanced last year, you may be able to write-off any points you paid to buy down the mortgage rate. To do this, you deduct the points proportionately over the life of the new loan. For example, if you took out a 30-year loan, you would deduct 1/30th of the points you paid each year.

Have You Refinanced More Than Once in Recent Years?

Many homeowners have overlooked an important opportunity. If you have refinanced more than once, you can deduct unclaimed points from an earlier refinance. Say, for example, you refinanced in 2003 and paid points. You deducted 1/30th of those points in 2003 and 2004. However, rates continued to drop, so you refinanced again in 2005, paying off that 2003 loan. The remaining points you have not yet deducted can now be deducted in full in 2005. This same deduction is available to you if you sold the house in 2005, rather than refinancing.

Deducting Interest on a Home Equity Loan

The interest on a home equity loan may be tax-deductible up to $100,000. However, if the combined amount of your home equity loan and your first mortgage totals more than the property's actual value, that deduction may be limited. Usually, you can deduct the smaller of the interest on a $100,000 loan or your home's value less the amount of your first mortgage.

As always, you should check with your tax advisor to determine which of these deductions apply to you!

Interest-Only Refinancing, What You Should Know

An interest-only loan gives you the option of paying just the interest, or paying interest and as much principal as you want in any given month. The interest-only option is available for a fixed number of years, and always in the initial years of the loan. Interest-only loans can be traditional fixed-rate mortgages or adjustable rates. Quicken Loans offers interest-only refinance options that are interest-only for the first 10 years.

How Interest-Only Loans Work:

If you choose to make the interest-only payment one month, that month's payment is lower than it would be had you made the principal and interest payment. Your interest rate may or may not be lower than a traditional mortgage, but you will have the option of choosing your payment. Sophisticated homeowners know that having this type of payment flexibility is one of the smartest ways to manage your personal finances.

Refinancing from a traditional home loan into an interest-only loan has become popular because it gives you control over your cash flow. This example illustrates the payment flexibility of refinancing a $200,000 mortgage to an interest-only loan.

$200K @ 5.75% Interest-Only Payment.............$958.00

$200K @ 5.75% Principal and Interest Payment....$1,167.00

Cash flow difference is $209.00 a month.

It's this simple: with an interest-only loan, in months when you need more cash, you don't have to pay both principal and interest. You only have to pay the interest. This could significantly reduce your mortgage payment and leave you with more money to funnel elsewhere.

Who Is an Interest-Only Refinance For?

Refinancing to an interest-only loan is a good choice for anyone looking to make their money work harder for them. For instance, making interest-only payments and putting the difference into an investment which brings a higher rate of return. Traditional mortgages offer no such option. That's something to think about if you're not maximizing your yearly 401(k) and IRA contributions.

But there are other things you can do with the extra cash you can have every month:

• Pay down high-interest credit card debt
• Save for your children's college tuition
• Buy or lease a second family vehicle
• Increase your home's value by making home improvements
• Set aside money for a rainy day

Depending on your existing loan balance, refinancing to an interest-only loan could get you access to thousands of dollars over the course of several years to put to use as you think best.

An interest-only refinance may also be a good option for people who expect to be in their homes for less than the interest-only period.

The Truth about Interest-Only Refinancing

A big misconception about interest-only refinancing is that if you're not paying down your loan's principal every month, you're not building home equity. That's not necessarily true. Homes in the U.S. have been appreciating between five and six percent a year. Chances are that even if you're not paying down principal, appreciation is building equity in your home for you.

How Market Conditions Affect Interest Rates

Ben Bernanke, Chairman of the Federal Reserve, lowers interest rates, so mortgage interest rates should go lower, too, right? Not necessarily. Here are a few reasons why mortgage rates typically RISE when the Federal Reserve lowers interest rates:

1. When Bernanke lowers “rates,” he lowers the “Federal Funds” rate. It's the interest rate at which large banks lend funds to one another and is a “short-term” rate. Mortgage interest rates are long-term — up to 30 years. Longer-term interest rates are sensitive to expectations about inflation. When short-term rates fall — like the ones the Federal Reserve controls — borrowing and spending usually increase, which can actually cause inflation. Longer-term rates, like mortgage interest rates, can rise when concerns about inflation increase.

2. Markets are often ahead of the Federal Reserve. Mortgage interest rates are determined every day in active public markets. If those markets believe the economy is slowing, interest rates may fall as markets anticipate that the Federal Reserve might lower short-term rates. This happened in the last half of 2000 when mortgage rates began steadily dropping, even though the Federal Reserve left their short-term rates unchanged. The opposite can happen as well. Mortgage rates can rise well ahead of the Federal Reserve increasing short-term interest rates.

It's almost impossible to accurately predict the future of something as complex as the U.S. economy. However, it is important that we, as mortgage consumers, understand some of these market dynamics. Sometimes, a lack of understanding can cost us a lot of money.

The Scoop on Pre-Qualified vs. Pre-Approved

Pre-Qualified vs. Pre-Approval: What's the difference?

What does it mean to be pre-qualified?

Getting pre-qualified for a loan gives you an idea of how much you might qualify to borrow. You have not actually applied for a loan and the mortgage banker has only your word on your income, assets and liabilities. None of your information has been verified, the loan amount is in no way guaranteed. You may be given a pre-qualification letter that merely states you are likely to be approved for a mortgage. Getting a pre-qualification is generally very fast and you can even pre-qualify for a mortgage online in only a few minutes.

What does it mean to be pre-approved?

Getting pre-approved means that not only have you given the mortgage banker information on your income, assets, and liabilities, but your information has been checked and verified. The mortgage banker may also have pulled your credit report to learn about your credit history and credit-worthiness.

Getting a pre-approval letter means that you are likely to be approved for a mortgage and also states the amount for which you may be approved. It carries a bit more weight than a pre-qualification letter.

However, getting pre-qualified or even pre-approved doesn’t necessarily guarantee that your loan will actually go through. Many things can happen during the process—some lenders may give out pre-approval letters without actually verifying your information or a borrower may not give completely accurate information about his situation.

Thinking About Purchasing a Home?

The following is a list of documents generally required when applying for a home loan. For a fast and easy loan process, have these items available when you're ready to complete your application:

• Credit history: When you apply for a mortgage, it’s necessary for lenders to pull your credit report to know how credit worthy (or risky) you are as a borrower. Be prepared to give your Social Security number and date of birth.
• Signed purchase agreement: It’s possible to get approved based on your income and asset information, but it makes the process faster and easier if you have the signed purchase agreement.
• Proof of income: You'll usually be required to show original pay stubs for the last 30 days.
• Copies of your W-2 forms: Required for each applicant. This will help your lender verify employment and income history.
• Copies of asset information: This includes any accounts where money may come from for closing. You may need to provide statements for your savings, checking and 401(k) accounts; as well as investment records for any mutual funds or stocks.
• Copy of your earnest money deposit: A copy of the check that you gave to the seller helps your lender account for the funds needed at closing.
• Copy of homeowners insurance: This is to verify that you will have sufficient coverage on the property.
• Copy of title insurance: This will help your lender verify the legal description of the property, taxes, and the names on the title. Your lender can track this down for you, but usually it is the home buyer’s responsibility.

Once you've begun the loan process, your mortgage banker will let you know exactly what documentation you'll need to get approved. Keep in mind that the more information you have ready before you apply, the faster your loan will close.

Refinancing: Questions & Answers

Q. Should I refinance?

Sometimes it makes sense to refinance. Sometimes it does not. It depends greatly on what your financial goals are. For instance, wanting to lower your interest rate and/or payment are good reasons to refinance, but there are other factors to consider. Here are a few things to think about:

• How long do you expect to be in the home?
• How much equity do you have in the home?
• How much will your closing costs be?
• To get that low rate, will you have to pay points?
• Will your lower payments more than make up for the closing costs, fees and points if any?

Q. Should I refinance from an adjustable-rate to a fixed-rate mortgage?

It depends on your situation. Generally, it's a good idea to get the lowest fixed-rate possible. However, if you're in the first year of a five-year adjustable rate mortgage (ARM) and you plan on moving in three years, it may not make sense for you to refinance. However, if the rate on your ARM is about to adjust and you think the rate will go up, then it may make sense to get a fixed-rate mortgage.

Q. Are interest rates higher for a cash-out refinance?

The interest rate you pay on a cash-out refinance loan will generally be the same that you pay on a non-cash-out loan. There may be an incremental fee associated with a cash-out refinance loan depending on the specific loan program you choose and the loan-to-value ratio. Using the equity in your home to pay off other bills can be a smart thing. Consider taking some money out to pay off credit cards bills, auto loans and any debt that has interest that is not tax-deductible. You may be able to deduct the interest on the money you take out to pay off that debt. Please consult your tax advisor.

Q. When should I “lock in” an interest rate?

Nobody can predict what interest rates will do. But historically, rates go up much faster than they come down. So if you're thinking about buying a home or refinancing your mortgage, get the good rate now—you can always refinance later if rates drop again. Any near-future drop in interest rates may not be drastic enough to impact your monthly mortgage payment. Of course, every situation is different, so it's important to consider all of your options.

Q. Should I pay points to get a lower rate?

If you're refinancing your mortgage, paying points may not be your best option. Points paid on a refinance can be deducted from your taxes only in small increments—1/30th a year for a 30-year mortgage. This means it could be several years before your lower rate makes up for the points you pay. However, if you're buying a home, points paid are a tax-deductible expense for that year. Please consult your tax advisor.

Q. Are there really loans with “no closing costs”?

There are few loans that truly have no closing costs. Sometimes lenders will not charge application fees and agree to pay the appraisal and title fees, but they may increase the interest rate. Lenders can also roll the costs into the amount of your loan. So, because you're not paying costs up front, it's called a "no closing cost" loan. While slightly increasing your mortgage might be acceptable to you, keep in mind that it's not really a cost-free loan.

Q. How long does it take to refinance?

With Quicken Loans, refinancing normally takes between two and four weeks, depending on a few things:

• Do you have a recent home appraisal?
• Are you in an area that appraisers can get to easily?
• Are there plenty of comparables in your neighborhood?

Often times the home appraisal is what takes the longest to obtain. During refinancing booms, appraisers can be difficult to schedule. Also, being prepared helps tremendously to speed the process—have your paperwork ready.

Q. How much money will I need to bring to closing?

A general guideline is that you'll need two percent of the purchase price of the home for pre-paid interest to cover the time between the date you close and your first mortgage payment. Some states may also require pre-payment of property taxes. When refinancing however, your old mortgage will most likely have money in escrow that can cover there costs. Some borrowers get short-term loans while this escrow transfers back to them, but most pay the money at the closing knowing they'll get it back when their escrow is returned.

Q. How can I reduce my closing costs?

If you're refinancing, you may be able to eliminate some costs by talking to your lender. For instance, your lender might reuse your last home appraisal or your credit report if they're recent enough. Another option may be to have your mortgage lender re-certify some documents (appraisal, title, etc.) for less than the cost of getting new ones.

Top 10 Deductions for Homeowners

Your home may be brimming with tax advantages. How will you get all of the breaks you're entitled to? You should always consult a professional tax advisor for details, but here's a list of the top 10 deductions:

1. Mortgage Interest

Interest on the loan for your primary residence is fully tax-deductible, if you qualify. Quicken Loans Tax Savings Calculator can help you figure the tax advantages of home ownership.

2. Points Paid on a Refinanced Loan

If you refinanced, you may be able to write off the points paid for the new loan. But, there's a twist: you'll have to deduct them proportionately over the life of the loan. So, if your new loan has a 30-year term, you'll deduct 1/30th of your points each year.

A couple of things to consider: If you've refinanced before, and you have points from the previous refinance that you haven't finished deducting, you can write off the rest of those points in the year you refinance.

3. Points Paid on a Purchase Loan

The points you pay at closing when you buy a home are deductible on your income tax statement for that year. If the seller paid some (or all) of your points for you, you may be able to deduct those seller-paid points.

4. Capital Gains with No Income Taxes

Thanks to the 1997 Tax Act, once every two years, single homeowners can realize a tax-exempt profit of up to $250,000 - as long as the seller owned and occupied the home as a principal residence during any two of the last five years. Married homeowners who file jointly on their tax returns do not have to pay taxes on up to $500,000 of gain when they sell their primary residence.

5. Home Improvements

Although you can't deduct the expenses associated with home improvements, keep in mind that making improvements to your home may increase the purchase price of your home. Keeping all of your receipts from home improvements may help you prove your home’s worth at resale and reduce the potential taxable gain when selling your home.

6. Real Estate and Property Taxes

State and local property taxes can be deducted as an expense against income. However the real estate taxes are only deductible in the year they are actually paid to the government.

7. Home Offices

If you have a qualified office in your home, you may be able to deduct costs associated with maintaining the portion of your home exclusively used for business. For example, 100% of your expenses related to the office such as painting and upkeep are deductible, as well as a portion of indirect expenses such as the cost of utilities and garbage pickup.

8. Limited Moving Expenses

Homeowners who have recently relocated for work may be able to write off the cost of moving themselves, their household goods, their vehicles, and other reasonable costs associated with the move. Restrictions do apply. For instance the new job must be 50 or more miles farther from the old home than the old job was.

9. Health-Related Improvements

Any home improvements for medical purposes can be deducted entirely from your taxes as long as the improvements do not add to the overall value of the home and have been made for a chronically ill or disabled person. If you qualify, you may be able to deduct a portion of expenses such as a swimming pool for treating polio victims or an air conditioner to alleviate a specific medical condition.

10. Vacation Homes

Owning a vacation home has more benefits than you may think. You can deduct some of the costs associated with owning a vacation home, such as real estate taxes, personal property taxes, mortgage interest, and points.

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