Best Tax Deductible Home Improvements for Homeowners

Best Tax Deductible Home Improvements For HomeownersBefore delving into tax-deductible home improvements, it’s important to understand that these tax deductions won’t be applied immediately. In most cases, homeowners can only benefit, tax-wise, from their home renovations later, when they sell their home.

It’s important for homeowners to keep receipts for their improvements, though so they have proof of the improvements they made, even if it’s years later when they sell their residence.

Typical Renovations/ Home Improvements That Can Yield Eventual Tax Benefits

A home improvement is any project that substantially adds value to a home. It can include adapting it to be more useful or be improvements that allow it to be used differently. The following are some general home improvements that can yield tax savings when a home is sold for a profit.

  • Room additions.
  • Upgrades to plumbing.
  • Kitchen improvements.
  • A new roof.
  • New bathrooms.
  • Upgraded landscaping.
  • Improvements to fencing.
  • New decks.
  • Improved wiring.
  • New walkways.
  • Driveway improvements.
  • Plumbing upgrades.

How Delayed Tax Benefits Work

While a homeowner can’t take the amount of money they spent on one of the above home improvements and deduct it that same tax year, they can sometimes benefit from the investment in their home. This is true because a homeowner can effectively reduce the amount of taxes they have to pay if they sell their home for a profit down the road.

When an improvement is made, the cost of those improvements are added to the tax basis of a home. The basis is the investment in a home for tax purposes. The greater this number becomes, the less the profit is from selling a home.

The following explains it a little better:

Example Of Tax Basis And Home Improvement Tax Savings

A fictional homeowner purchases their home for $600,000 and sells their home 20 years later for $1,000,000. Their original “profit” from the sale would have been $400,000, which would have been taxable income at the time of the sale. However, throughout the 15 years when they resided in the home, this homeowner made around $60,000 worth of home improvements, including a roof improvement and a kitchen update. The $60,000 is then added to the original investment this homeowner made in their home, bringing their tax basis to $660,000.

The homeowner’s profit when they sell their home is then reduced from $400,000 to $340,000. Many homeowners use home improvements as a way to reduce the amount of taxes they will one day have to pay when they sell their home for a substantial profit.

Other Ways For Homeowners To Benefit From Their Home This Tax Season

Homeowners can make their home work for them each and every tax year by qualifying for the home office deduction. This only works if they own and operate a legitimate business out of their home, though. A part of the home must be used either regularly or exclusively for the business to qualify.

The above is some pertinent information on how homeowners can use home improvements to reduce their tax burden.  As always, check with your trusted tax professional for accurate advice on your personal situation.

Pros and Cons of Adjustable Rate Mortgages

Pros and Cons of Adjustable Rate MortgagesWhen you are in the market for a new home, you may be faced with numerous options for financing your home. One of the choices you will have to make is whether to apply for a fixed or adjustable rate mortgage. In some cases, an adjustable rate mortgage (ARM) may be your best option, but keep in mind, they are not the answer for everyone.

Adjustable rate mortgages can be risky for some borrowers and it’s important to understand both the pros and cons.

When To Consider Adjustable Rate Mortgages

Perhaps one of the best things about ARMs is they typically have a lower starting interest rate than fixed rate mortgages. For some borrowers, this means it is easier for them to qualify for a loan. ARMs are beneficial for borrowers who:

  • Anticipate an income increase – for borrowers who are anticipating their income to increase over the next year or two, an ARM may be the right option.
  • Will be reducing their debt – those borrowers who have automobile loans or student loans that will be paid off in the next few years may benefit from an ARM which would allow them to qualify for a larger mortgage today anticipating their ability to covert to a fixed-rate mortgage.
  • Are purchasing a starter home – when you anticipate living in a home for five years or less, an adjustable rate mortgage may help you save money for a bigger home.

Adjustable Rate Mortgage Concerns

There are a number of different types of adjustable rate mortgages and they are each tied to specific interest rate indexes. While an ARM may offer borrowers some flexibility in terms of income and debt ratios, the downsides cannot be ignored. Some of the cons of using an ARM to finance your mortgage include:

  • Rate adjustments – borrowers should carefully review their loan documents to see how frequently their interest rates may increase. Some loans adjust annually while other may not increase for three to five years after the mortgage is signed. For borrowers, this means they may anticipate an increase in their monthly payments.
  • Prepayment clauses – oftentimes, lenders include a prepayment penalty with ARM loans which can be surprising for borrowers. Before agreeing to an ARM, make sure you read the documents very carefully to determine how long you need to hold the loan and if there is a prepayment clause.
  • Home values – one of the biggest challenges borrowers face with an ARM is what happens if the property value decreases: Refinancing a home into a fixed-rate mortgage may be more difficult if this occurs.

Borrowers who are searching for the right mortgage should discuss all options with their loan officer. There are specific instances when an ARM may be the best option and there are other times, such as if you plan to stay in your home for more than five years, where a fixed-rate mortgage may be your best option.

Should You Pay Discount Points When You Get Your Mortgage?

Should You Pay Discount Points When You Get Your MortgageOne of the challenges you will face when deciding how much money to put down on your new home is whether to put down a larger down payment or to take a bit of money from your down payment and use it to buy “discount points” to lower your interest rate.

There are pros and cons to doing both and each borrowers situation will be different so it’s important to understand which option is best for your individual situation. Some factors you should consider include:

  • Cost of borrowing – generally speaking, to lower your interest rate will mean you pay a premium. Most lenders will charge as much as one percent (one point) on the face amount of your loan to decrease your rate. Before you agree to pay points, you need to calculate the amount of money you are going to save monthly and then determine how many months it will take to recover your investment. Remember, closing points are tax deductible so it may be important to talk to your tax planner for guidance
  • Larger down payment means more equity – keep in mind, the larger your down payment, the less money you have to borrow and the more equity you have in your new home. This is important for borrowers in a number of ways including lower monthly payments, better loan terms and potentially not having to purchase mortgage insurance depending on how much equity you will have at the time of closing
  • Qualifying for a loan – borrowers who are facing challenges qualifying for a loan should weigh which option (points or larger down payment) is likely to help them qualify. In some instances, using a combination of down payment and lower rates will make the difference. Your mortgage professional can help you determine which is most beneficial to you

There is no answer that is right for every borrower. All of the factors that impact your mortgage loan and your overall financial situation must be considered when you are preparing for your mortgage loan.

Talking with your mortgage professional and where appropriate your tax professional will help you make the decision that is right for your specific situation.

What’s Ahead For Mortgage Rates This Week – April 16th, 2018

What’s Ahead For Mortgage Rates This Week – April 16th, 2018Last week’s economic reports included readings on inflation, the minutes of the most recent meeting of the Fed’s Federal Open Market Committee and weekly reports on mortgage rates and first-time jobless claims. The University of Michigan released its Consumer Sentiment Index for April.

Inflation Grows, Fed Indicates Future Rate Hikes Likely

The minutes of the Federal Open Market Committee Meeting held March 20 and 21 indicate Fed policymakers are likely to increase the target federal funds rate at their June meeting. Economic indicators including strong labor markets and low unemployment rate were cited as contributing to expectations for federal rate hikes throughout 2018.

How the Fed moves on interest rates affects private sector interest rates as financial institutions typically follow the Fed’s lead regarding raising or not raising consumer lending and mortgage rates.

FOMC minutes said that members noted increasing consumer credit card balances, but also said that sub-prime borrowers continued to have trouble in getting adequate credit at favorable interest rates.

Mortgage Rates Hold Steady, New Jobless Claims Dip

Mortgage rates were little changed last week according to Freddie Mac. The average rate for a 30-year fixed rate mortgage rose two basis points to an average of 4.42 percent; the average rate for a 15-year fixed rate mortgage was unchanged at 3.87 percent.

Rates for a 5/1 adjustable rate mortgage averaged one basis point higher at 3.61 percent. Discount points averaged 0.40 percent for fixed rate mortgages and 0.30 percent for 5/1 adjustable rate mortgages.

New jobless claims were lower last week with 223,000 claims filed; analysts expected 230,000 new claims filed based on the prior week’s reading of 242,000 new claims filed. In other news, the University of Michigan released its Consumer Sentiment Index with an index reading of 97.8 for April. Analysts expected a reading of 101.8, which was based on the March reading of 101.4

Consumers surveyed were fearful of possible trade wars resulting from recent tariffs on foreign goods; the consumer sentiment index dipped from its March reading of 101.4 to 97.8. Builders have said that tariffs will increase prices on building materials and such increases would drive home prices up.

Whats Ahead

This week’s scheduled economic releases include readings on builder sentiment from the National Association of Home Builders, Commerce Department reports on housing starts and building permits issued and readings on retail sales. Weekly reports on mortgage rates and new jobless claims will also be released.

The Humble Vegetable Garden: A Fun, Health-conscious Home Project for the Entire Family

The Humble Vegetable Garden: A Fun, Health-conscious Home Project for the Entire FamilyWhether you are hunting for a project that will pry the kids away from their phones or you just want a head start on the spring, few home projects are as rewarding as a vegetable garden.

Invest a few hours in planting today, some maintenance throughout the year and soon you’ll be enjoying some delicious, home-grown veggies. Ready? Let’s get started!

Selecting The Right Spot For Your Garden

The first decision you will need to make is where your garden will live. If you are new to gardening, you can start with a small patch of land in the corner of your backyard. The area needs to have full exposure to sunlight at least six to eight hours each day. Your plants will also need watering, so ensure that your hose can reach the plot or that you have another water source nearby.

Having good soil is necessary but not critical as you can buy a load of topsoil from a local nursery. You may want to invest in a composter as well so that you can make efficient use of food waste.

Choosing Which Vegetables To Grow

Next, you will need to choose what you want to grow in your garden. As mentioned above, if you are new to gardening you can start small with a few simple vegetables. Tomatoes are an excellent choice as they continue to produce throughout the year and can be used in so many different types of food. Root vegetables like carrots and potatoes are also a great choice. If you like fresh herbs, consider setting aside a part of your garden for basil, thyme and other herbs.

Materials You’ll Need To Get Started

As you might imagine, you do not need very much to start a garden. Some soil, gloves, a few hand tools and seeds or starter plants are enough to get going. Take the family out for a trip to a local nursery and ask about the best plants to start in the spring. From there, a trip to one of the large home supply stores will provide you with the rest.

Make What You Can, Buy What You Can’t

Finally, don’t forget that this is supposed to be a fun project! If you decide you need planter boxes, try to build them instead of buying them. Figure out what you can recycle or upcycle from around your home to use in the garden. Try to avoid buying over building unless you’re stuck.

Follow the steps above and before you know it, you’ll be enjoying the fruits of your labor. If you decide you need a more substantial yard, contact our offices today!

Look Beyond The Interest Rate: What Else Matters When Choosing A Mortgage Lender?

Look Beyond The Interest Rate What Else MattersMost consumers securing a mortgage plan to remain in that loan for 30 years. During that time, the borrower maintains a relationship with the loan servicer or lender. Most often, home buyers do not think twice about who the mortgage lender is, but rather focus on the interest rates offered.

Look beyond this information. Borrowers need to take into consideration much more before they sign on the dotted line. Here’s what to look for specifically:

Choosing a Specialized Lender Can Help

Home buyers interested in special loan programs must select a lender approved to provide those loans. FHA, USDA and VA loans, in particular, must come from an approved lender. A specialized lender like this not only has approval for the loan but often will provide more support and guidance throughout the lending process.

Recognize That Competition Is Heavy

The mortgage lending market is very competitive and with that comes the ability to negotiate deals and discounts. It also means lenders will be aggressive in trying to close the deal. A good mortgage lender will never cause the borrower to feel rushed or as if they must agree to terms immediately. Rather, they should feel comfortable enough with the lender to discuss terms at length and even to think about it before buying.

In-House Lenders Versus Independent Lenders

Many real estate agents have an in-house lender that works alongside the agency helping to secure loans for would-be buyers. Sometimes, they can help with lower interest rates or promises of better access to credit, but not always. Again, buyers should never feel pressured into working with a specific lender or in settling for a loan they are not confident they can afford. Buyers should not feel as though they must work with the real estate agent’s recommended lender.

Take A Close Look At The Advertising

To be clear, the real estate lending industry has many fantastic offers to provide to home buyers or those refinancing now – including low interest rates and low down payment requirements. However, advertisements from some lenders may try to sway a buyer by looking more promising than the competition. However, most of today’s mortgage lenders offer many of the same benefits even if they do not explicitly advertise them.

For example, most offer a lock-in period to hold a specific interest rate for a length of time. Most offer discount points and incentives to help buyers to save money. Virtually all lending agents and loan offers will work “aggressively” as some marketing may state, to secure a low-cost loan for the buyer. In other words, buyers need to look beyond these flashing promises and at the actual terms.

How to Find a Comfortable Fit with a Lender

Considering all of these points, many home buyers still will make a decision about who to borrow from based on interest rates and available borrowing credit. It makes sense to consider lenders with lower rates or better terms.

Yet, there are other factors that contribute to which lender is the best. Perhaps most importantly is finding a lender that feels right. What does that mean?

They should work closely with the buyer as a team, together working to find the best loan opportunity possible. That often means that the mortgage lender needs to be ready to say no. For example, if a home buyer hopes to buy a home that he or she really cannot afford, the lender needs to be willing to caution against such investments.

Worthy lenders do more. They will help a buyer to qualify for a loan, but also provide advice on how to get the best deal possible in their situation. For example, they may be able to tell the home buyer what to do about their current credit score to boost it a bit before locking in a loan. They may offer advice about monthly payments and how much a buyer can expect to pay in mortgage payments, insurance, utilities, and so on. They work with the buyer, not sell to the buyer.

Does Personal Experience Matter?

Many times, consumers receive advice that they should ask for referrals from family and friends. This can be helpful, but that does not mean the recommendation is the best fit. For those that choose to use referrals, be sure there’s a comparison that’s recent and that the recent buyer can offer specific reasons why one lender was better than another.

The same is true for a local bank. Many times, consumers instantly turn to their local bank, perhaps one they have experience with spanning 10 or more years. This can be one option, but it should never be the instant, only option considered. Take the time to compare numerous opportunities.

History Matters, Too

Mortgage lenders come and go. Often, lenders sell a loan to another serving agency, which can make any mortgage holder a bit on edge about what to expect. Buyers should ask whether or not the lender will remain the long-term loan servicer or if they could see their new mortgage sold to another company. There are protections in place to ensure that the borrower isn’t penalized during the transfer of servicing, but it’s a good question to ask up front.

Here’s the Bottom Line

Home buyers need a mortgage lender they can trust and count on to provide their mortgage loan. They also need:

  • To feel as though the lender is knowledgeable and willing to share that knowledge with them
  • A lender that makes time for them to ask those questions and never rushes a decision
  • An organization that offers competitive rates and is willing to work hard to qualify the buyer
  • To feel valued as an investor, not just sold to
  • To offer competitive services including the type of tools borrowers need for online payments

The good news is some lenders work hard to stand out from the others. They provide incredible offers, reliable service, and a feel-good atmosphere for buying a home. Any home buyer who is making this type of financial decision needs a lender by their side they feel good about and trust to have their best long-term intentions in mind. Those loan offers who stand out tend to ensure the entire buying process is successful.  

How The 2018 Tax Changes Can Affect Your Mortgage

How The 2018 Tax Changes Can Affect Your MortgageWhen the chatter was at its peak on the 2018 tax law changes being proposed, one of the big areas of concern for homeowners was the elimination of the mortgage interest deduction. Right behind that issue was a similar treatment with regards to property tax deductions.

As the rumors swirled and Congress moved, many feared both deductions had finally met their day and were going to be entirely eliminated, resulting in a major financial hit that many homeowners and particularly those in high real estate cost states would have felt painfully. As it turned out, there’s no reason to panic or suddenly dump titled real estate just because it has been bought with a mortgage. 

Yes, both issues were impacted by the 2018 tax law changes, but neither the mortgage interest deduction nor the property tax deduction were eliminated entirely. Instead, they were modified.

The changes include:

  • Mortgage interest deduction – the new laws cap the eligible debt to $750,000. While old loans originated prior to the law change date are still eligible up to $1 million, new mortgages created after the enactment date are caught in the lower universe. However, being realistic, most homebuyers are not in the bracket that afford a $750,000 plus priced home except maybe in a few communities such as New York City or the San Francisco/Bay Area in California. So the change basically means business as usual for 9 out of 10 homeowners in the U.S.
  • Real estate property taxes – total state and local taxes eligible for deduction are now capped at $10,000. This is where some homeowners could feel a pinch as a typical home in higher cost states easily generates property tax levels of $5,000 to $7,000 for a $300,000 home. So those units assessed a higher value by tax auditors will likely feel this new limitation take effect.
  • The standard deduction increase – remember, the above items are only useful to the extent that a tax filer itemizes his deductions. With a standard deduction now at $12,000 for an individual and $24,000 for a married couple, filing jointly, the option to itemize could go away entirely if the standard deduction provides a higher level of tax savings overall. And then that makes the above two deductions entirely moot and useless. Of course, it’s not entirely a plus since the personal exemption is also eliminated, thus reducing the benefit of the higher standard deduction by as much as $4,150 per person. In essence, the change is a wash, but could be enough to bar use of itemization, which would hurt greatly.

So the changes did not wipe out any benefit entirely (except the personal exemption). Instead, the real impact depends on which change applies to a specific taxfiler’s situation.

This is why two homeowners in the same town with the same house and market value could end up having very different tax results with the 2018 changes. Because there is so much variance.

As always, work with a trusted tax professional in order to understand how these changes will affect your personal tax situation.

Manage These 3 Items Before Applying For A Mortgage

Manage These 3 Items Before Applying For A MortgageMortgage lenders weigh the risk of getting their principal and interest paid back by looking at the qualities of the prospective borrrower. And due to the amount of money being requested and lent to purchase homes, those requirements can become daunting.  Working with a trusted and qualified mortgage professional makes this sometimes confusing process a little clearer.

To this end, there are three things that a potential homebuyer can do to prepare for the mortgage approval process.

Manage Debt And Credit Levels

For many homebuyers, managing their credit score is the biggest challenge. Mortgage lenders like buyers with strong credit. While getting strong credit usually isn’t something that can be done overnight, paying bills on time, all of the time can help to build a positive profile.

Using as little credit as possible is also helpful, since high utilization of existing credit lines can harm a borrower’s score. Having less debt can also reduce monthly payments, making it easier to qualify for a larger mortgage.

Manage Income And Qualifying Ratios

Lenders look for two things when it comes to a borrower’s income:

  1. Stable incomes are preferred, so being able to prove the income with a W-2 form or other documentation is usually required. Self-employed people will typically need to prove their income with their tax returns, so taking high write-offs can make it harder to qualify.
  2. A borrower’s income should be significantly higher than his total monthly debt payments. Lenders divide a borrower’s monthly payments — including their proposed mortgage — into the gross monthly income. If the payments exceed a set percentage, the lender will shrink the mortgage until it considers the payment affordable.

Collect Required Paperwork Early

To qualify for a mortgage, borrowers typically need to submit a comprehensive file of supporting documentation. This can include tax returns, pay stubs and bank and investment account statements.

Since lenders frequently want some historical data, it can be a good idea for people considering applying for a mortgage to start collecting documentation before they actually begin the mortgage application process. Once again, working with a qualified mortgage professional will make this process a lot more comfortable.

What’s Ahead For Mortgage Rates This Week – April 9th, 2018

What’s Ahead For Mortgage Rates This Week – April 9th, 2018Last week’s economic reports included readings on construction spending, mortgage rates and weekly jobless claims. Other labor-related claims included ADP payrolls, Non-Farm Payrolls and the national unemployment rate.

Construction Spending Rises in February

Construction spending was higher in February according to the Commerce Department. Spending on building projects rose by 0.10 percent in February Reuters reported that construction spending rose 0.10 percent as compared to expectations of an 0.40 percent increase and January’s unchanged reading. Seasonal weather conditions typically cause lulls in building. Analysts said that residential construction spending increased by 0.10 percent to its highest level since January 2007.

Real estate analysts have consistently indicated that building more homes is the only solution to lingering shortages of available homes in the U.S. Recent news about tariffs on foreign building materials may cause builders to wait and see how tariffs will impact business before going all-out on building homes.

Mortgage Rates Fall as New Jobless Claims Rise

Freddie Mac reported lower mortgage rates last week; the average rate for a 30-year fixed rate mortgage was four basis points lower at 4.04 percent.15-year fixed rate mortgage rates averaged 3.87 percent, which was three basis points lower than the prior week. Rates for a 5/1 adjustable rate mortgage averaged 3.62 percent and were four basis points lower than for the prior week. Discount points averaged 0.50 percent for 30-year fixed rate mortgages and 0.40 percent for 15-year fixed rate mortgages and 5/1 adjustable-rate mortgages.

Weekly jobless claims rose to 242,000 new claims filed as compared to 225,000 new claims expected and 218,0000 claims filed the prior week.

Labor Reports Show Mixed Results

ADP reported fewer private-sector jobs created in March with 241,000 jobs created as compared to February’s reading of 246,000 new private-sector jobs. The Labor Department reported a sharp drop in Non-Farm payrolls, which measures public and private-sector job growth. 103,000 jobs were added in March as compared to February’s revised reading of 326,000 jobs added. Jobs added in March were at their lowest level since fall 2017.

Analysts put the low Non-Farm payrolls reading in perspective; on average 202,000 jobs were added monthly during the first quarter of 2018 and jobs growth was faster than during first quarters of 2016 and 2017. The national unemployment rate was unchanged at 4.10 percent; this was the lowest rate in 17 years. Low unemployment rates typically indicate few layoffs and suggest strong economic growth.

Whats Ahead

This week’s scheduled economic releases include readings on inflation, core inflation and consumer sentiment. The Federal Open Market Committee of the Fed will release minutes from its last meeting. Weekly readings on mortgage rates and new jobless claims will also be released.

6 Money Making Tips For The First Time Home Seller

6 Money Making Tips For The First Time Home SellerToday’s homebuyers can have specific ideas and personal preferences that influence their decision on what attracts them to a particular property. While some prefer a fixer-upper, many desire a home that’s as close to turn-key as possible.

First time home sellers may help expedite the process with these six home selling tips. 

Determine Right Listing Price

A home priced competitively in its market typically sells faster. Professional REALTORS® know the area and look at comparative listings to help determine the right listing price.

First time home sellers often think their home should list higher, and this can turn away buyers. Trust a real estate agent to know the right price that will attract potential buyers for a sale that makes all parties happy.

Curb Appeal Makes a Difference

Great curb appeal has the power to attract buyers and create a positive first impression. Simple enhancements add to curb appeal:

  • Mow the lawn or make sure the walk/driveway is clear of snow/ice
  • Prune overhanging branches and trim bushes
  • Remove any sickly or dead vegetation
  • Replenish missing mulch or rocks in landscape beds
  • Replace worn house numbers and/or mailbox
  • Add fresh potted plants to porch for pop of color
  • De-clutter yard by removing lawn ornaments/art and all kids’ toys
  • Have all exterior lighting in working condition

A fresh coat of paint on the front door, clean windows, and a sidewalk swept free from leaves and debris also add to the overall welcoming look. 

De-clutter and Depersonalize

Once potential buyers enter the home, it’s time to make another important impression. Homebuyers should be able to visualize themselves living in the space.

De-cluttering and depersonalizing the home helps. The fewer items in a room, the larger the space feels. Key areas to de-clutter include the kitchen and bathroom, in particular the countertops. Remove all personal items, storing out-of-sight in a closet or cabinet. 

In addition, remove personal photographs and large collections if possible. Children’s rooms don’t need to be completely depersonalized, but it’s essential to de-clutter the space to show it to its best advantage.  

Repairs and Replacements

Every home has a few small items that need repair but have fallen to low priority. Before listing the home, take the time to make these repairs and replacements.

Tighten that loose cabinet in the kitchen, replace the torn bathroom window screen, and refresh the caulk in the showers. Sometimes it’s the little things that turn off homebuyers and these small repairs may be the tipping point for a sale. 

Offer the Extras

In a competitive market, offer extras to entice buyers. Generally, these extras are appliances that stay with the home as part of the sale. Other extras a seller may include within the price of the home are items like window treatments and outdoor accessories like patio furniture. 

Consider a Pre-inspection

A pre-inspection can help reduce concerns potential buyers have regarding the home’s current condition. It’s a way to reassure buyers that the house doesn’t have any hidden issues.

However, getting a pre-inspection doesn’t mean homebuyers won’t want their own home inspection, too. Consult with a real estate professional to help determine if a pre-inspection may be helpful.

First time home sellers don’t have to be overwhelmed with the process. With the right preparation and the help of a professional real estate agent, home selling can move swiftly. 

 

Consumers wishing to file a complaint against a company regarding the origination and/or servicing of your mortgage loan or a complaint against a residential mortgage loan originator concerning residential mortgage loans on real estate located in Texas should complete and send a complaint form to the Texas Department of Savings and Mortgage Lending, 2601 North Lamar, Suite 201, Austin, Texas 78705. Complaint forms and instructions may be obtained from the department’s website at www.sml.texas.gov. A toll-free consumer hotline is available at 1-877-276-5550. The department maintains a recovery fund to make payments of certain actual out of pocket damages sustained by borrowers caused by acts of licensed residential mortgage loan originators. A written application for reimbursement from the recovery fund must be filed with and investigated by the department prior to the payment of a claim. For more information about the recovery fund, please consult the department’s website at www.sml.texas.gov.