Home Ownership

The sale of a residence is usually reported on Form 1099-S by the attorney at the closing or sale of the property.
It is not reported on Form 1099-S if the seller gives a written certification that the full amount of the gain on the sale qualifies for the exclusion.
Currently you may exclude from income up to $250,000 ($500,000 for married filing jointly) of Gain realized on the sale or exchange of a residence if you owned and occupied it as a principal residence for at least 2 years out of the 5 years before the sale or exchange.
Only taxable gains need to be reported on Schedule D. Form 2119 has been discontinued.

If you have a taxable gain on the sale of a residence after the $250,000 ($500,000 for filing joint return)exclusion then the taxable amount is reported on IRS Schedule D. Form 2119 was discontinued by the IRS in 1999.

Your house equity is the value of your homeowner's unencumbered interest in the house. Equity is the difference between the home's fair market value (FMV)and the unpaid balance of the mortgage and any outstanding liens. Equity increases as the mortgage is paid down over the years or as the property appreciates.

A mortgage "roll-in" loan option is a refinanced loan that rolls any of the closing costs or additional fees into the mortgage loan. Generally, this option best serves people who have a reasonable amount of equity and want to reduce their overall interest expense and plan to stay in their homes for the balance of their mortgage term.

A mortgage loan backed by the Veteran's Administration requires very low or no down payments and has less requirements for qualification. Generally, the interest rates are lower than what is being offered in the marketplace. Members of the U.S. Armed Forces are eligible for the loans under certain qualifying conditions. Contact the local Veteran's Administration office for more information.

The mortgage debt to income ratio is the percentage of a person's monthly earnings used to pay off all debt obligations. Lenders usually consider two ratios when making a loan. The ratios are constructed in different ways. The first is called the front-end ratio. It is the ratio of the monthly housing expenses including principal, interest, property taxes and insurance and that amount is compared to the borrower's gross monthly income. The second is called the back-end ratio. It is when a borrower's other debts, such as auto loans and credit cards are taken into account. Lenders usually look at both ratios to determine an acceptable ratio. Some lending institutions take into account only the back-end ratio.

The buydown option is a process of trading money for a lower mortgage interest rate. The borrower "buys down" the interest rate on a mortgage by paying additional discount points up front.
It is also a mortgage in which an initial, lump-sum payment is made to temporarily reduce a borrower's monthly payments during the first few years of a mortgage.

A mortgage amortization schedule is a timetable for the periodic repayment of a mortgage loan. An amortization schedule indicates the amount of each payment that is applied to interest and principal. It also indicates the remaining balance after each payment is made.

A loan that "bridges" the gap in time between the purchase of a new residence and the sale of the borrower's current residence. The borrower's current residence is used as collateral and the money is used to close on the new residence before the current residence is sold. Some are structured so they completely pay off the old residence's first mortgage at the closing of the bridge loan, while others add on the new debt on top of the old debt. A bridge loan usually runs for a term of four to eight months.