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Top 4 Frequently Asked Questions
Additional Questions
If a borrower refinances
a WHEDA Home mortgage loan, will that trigger the need to pay a recapture
tax? No, refinancing will not trigger the recapture tax. The event which could trigger the recapture tax, is the sale of the house when the title actually changes hands. The borrower would account for the recapture tax when preparing taxes for the year during which the title changes hands. It is worth noting that WHEDA Home Loan borrowers probably will not be subject to recapture tax. For recapture tax to come into play, the borrower's income would have to substantially increase between the time the house was purchased and the time it is re-sold. If the borrower's income does not go above the recapture limit, there will be no recapture tax. Also, if the borrower lives in the house for nine years and still has the WHEDA Home Loan, there is no recapture tax at all. The federal government, not WHEDA, levies the recapture tax. The borrower has always paid
for everything in cash. What can I do if he has no credit history? If the borrower does not have a traditional credit history, you can build an alternative credit history. Obtain payment records of items that are paid on a monthly basis, for example, rent verification; electric, gas, telephone, and cable TV bills; and car insurance (if paid on a monthly basis). Once I lock the WHEDA Home mortgage
loan rate, how long is the rate good? You have 45 days from the date of rate lock to submit the complete loan application package. Once the loan application is approved, you must close the loan within 60 days. Does a bankruptcy disqualify
someone from a WHEDA Home mortgage loan? A bankruptcy does not automatically disqualify the borrower; however, the bankruptcy must have been discharged at least four years ago and your customer must have re-established good credit.
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