Pre-Qualification vs. Pre-Approval

Pre-Qualification vs. Pre-Approval

You may have heard of these terms before, but maybe you don’t necessarily know the difference between the two, or for that matter, what either one of them really mean. Below is a short description of each and how both can benefit you as you make your way through the home buying process.

Pre-Qualification

Pre-Qualification is the process of determining how much money you will be eligible to borrow based on an initial interview to exchange essential financial information, including your income, savings and debts. A credit report is not needed.

By “pre-qualifying” you are not only made aware of the general amount of money you’ll be able to borrow, you will also learn about your current financial situation as it relates to purchasing a home. You will also be given tips on how to change or improve your financial status, if needed, to better meet your home purchasing goals. You’ll also learn about specific loan programs that you are qualified for and that will help you meet these goals.

Pre-Approval

Pre-Approval is the act of becoming conditionally approved for a specific home loan, prior to finding and making an offer for a home. The dollar amount submitted for approval is based upon your personal level of comfort, not to exceed an amount that is likely to be approved.

Documents that you must submit in order to obtain this service include*:

  1. Income: One month of pay stubs & two years of W2 forms.
  2. Assets: Previous two months’ worth of savings, checking and retirement account statements.
  3. Credit History: A credit report, which will be used for a mortgage transaction.

Once we receive the necessary documents, a completed loan application and all other required disclosures needed for a home loan can be produced. Typically, within 24 to 48 hours a “conditional loan approval” (commitment to make a loan) can be issued in the form of a letter that can be presented to real estate agents and sellers as evidence that you are ready and able to purchase a home.

Let’s Talk!

To find out what you can be pre-qualified and/or pre-approved for, USACU is here to help:

  • Questions? Contact Steven Raymond, our resident mortgage expert, via email (sraymond@usacu.org) or phone (503.275.0329). He has over 30 years of experience in the industry & loves to talk mortgage.
  • Ready to go? Apply for a mortgage online now.

 

*On a case by case basis more documentation may be needed to provide evidence of additional income, assets or debts.

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Cut Tax Time Stress with These Quick Tips

Key Tax-Preparation Tips to Cut Stress

Although it comes around every spring, tax season tends to inflict the same headaches year after year. To reduce your stress — and maximize your refund — it’ll help to stay organized and be aware of recent changes to the tax code.

For additional motivation to get on track, keep in mind that the average refund has been about $3,000 in recent years. Even if you don’t expect to get that much back, there are plenty of ways to put a refund to good use. But first, you’ll have to file your returns properly, taking advantage of any deductions you might qualify for. Here’s a look at where to get started.

Compiling the necessary information

For starters, you’ll need your W-2 form listing earnings and tax withholdings, which employers typically send out in January or early February. Be sure to have your Social Security number or taxpayer identification number available, as well as those numbers for any dependents you’ll claim. You’ll also need documentation of any income they may have had.

Affordable Care Act penalty

The 2010 Affordable Care Act ushered in one of the most significant tax law changes in recent years. It stipulates that if you didn’t have health insurance for more than three months in 2015 and didn’t qualify for an exemption, you may face a penalty.

For tax year 2015, taxpayers who lack adequate insurance may be penalized at either 2% of a portion of their income or $325 per adult and $167.50 per child, to a maximum of $975 per family — whichever is higher. Those fees are set to increase in upcoming years, which means it’s a good idea to get insured as soon as possible.

Tax deductions reduce taxable income

Deductions reduce the amount of your income that you have to pay taxes on. Sit down and figure out whether the standard deduction or itemized deductions will work best for you. The former is a set amount that reduces your taxable income depending on your filing status; the latter lets you list qualified expenses separately, such as mortgage interest and local property taxes. If your itemized deductions add up to more than your standard deduction amount, go with that.

So what kinds of expenses can you deduct? Contributions to eligible organizations and interest on education loans are among the more well-known deductions you can take. Others, such as medical and home office expenses, aren’t as widely used for various reasons. Make sure to look into which of your expenses you can use to reduce your taxable income, which will probably increase your refund. Bear in mind that income limits and expense thresholds may limit these deductions or eliminate them entirely.

If you qualify to contribute to a traditional individual retirement account, or IRA, you may be able to shield up to $5,500 of income from taxes — plus $1,000 more if you’re 50 or over — by putting it in an IRA. You have until April 15 to make deductible contributions for the previous year. Withdrawals are subject to income tax, however.

Also, if you’re in a same-sex marriage, stay alert for further changes in the rules governing your tax status and other financial issues.

The bottom line

Completing your tax returns won’t be much fun, but it’s the first step in claiming a refund. Once you’ve filed your returns, you should expect to get what you’re due within three weeks — or in less than half that time if you ask for the money to be directly deposited to a savings or checking account. Just remember to compile all the essential paperwork before getting started, keeping an eye out for tax credits and changes to the tax code.

 

 

© Copyright 2016, NerdWallet.

USACU does not provide tax consulting or advising services. For specific tax advice, please consult a certified tax consultant.

A Milestone Year for Credit Unions for Kids

USACU is very proud of our relationship with Credit Unions for Kids, a collaborative nonprofit engaged in fundraising to benefit 170 Children’s Miracle Network Hospitals.

This year, Credit Unions for Kids celebrates its 20th year of fundraising – and the $150 million donated to Children’s Miracle Network Hospitals (CMN Hospitals)!

From our friends at Credit Unions for Kids:

“We are extremely proud of our partnership with CMN Hospitals and the amazing success of the Credit Unions for Kids program over the last 20 years,” remarked Jim Nussle, President & CEO of the Credit Union National Association. “Throughout our history, credit unions have always played a vital role in giving back to the local community and there is no better example of ‘people helping people’ than what we have done through the CU4Kids program.”

Credit unions under the Credit Unions for Kids brand participate in fundraising throughout the year including hosting golf tournaments, wine auctions, change drives, Miracle Balloon Icon campaigns, Miracle Jeans Day and Shop for Miracles which was held on International Credit Union Day® and raised $500,000 in 2015.

“The passion and dedication shown by credit unions across the country is why so many kids can hope for a miracle today. The funds raised by credit unions directly benefit sick and injured children who are in need and who are deserving of the best care available,” said John Lauck, president and CEO of CMN Hospitals. “On behalf of the 10 million kids treated at our Children’s Miracle Network Hospitals each year, we want to thank and congratulate Credit Unions for Kids for reaching these incredible milestones.”

Credit union donations stay local to fund critical treatments and healthcare services, pediatric medical equipment and charitable care. The credit unions legacy of giving and compassion over the last two decades will insure that all children in need of care will have it now and well into the future.

 

About Children’s Miracle Network Hospitals
Children’s Miracle Network Hospitals® raises funds and awareness for 170 member hospitals that provide 32 million treatments each year to kids across the U.S. and Canada. Donations stay local to fund critical treatments and healthcare services, pediatric medical equipment and charitable care. Since 1983, Children’s Miracle Network Hospitals has raised more than $5 billion. Its various fundraising partners and programs support the nonprofit’s mission to save and improve the lives of as many children as possible. 

About Credit Unions for Kids
Credit unions, fundraising under the Credit Unions for Kids™ brand, have partnered with Children’s Miracle Network Hospitals since 1996 and in that time have generated over $150 million in contributions. Today, individual credit unions across the United States collaborate with credit union chapters, leagues and business partners to raise much-needed funds to benefit CMN Hospitals. The funds raised by the credit union community help support new facilities, equipment acquisition, research programs, patient services, charitable care and health education programs benefitting 10 million children annually.