Michigan Real Estate

Get Started!

2007-05-17T07:24:00.000-07:00

What is the process of buying a home? Here is a step by step checklist to get you into a home. Buying Real Estate in Michigan is simple!

1. Apply for a mortgage using the link on the right side of the screed.
2. Collect your two most recent pay stubs, 2 years W2's and a bank statement for the money you are using for a down payment.
3. Once you are approved for a mortgage you can begin to look for a home.
4. I can assist you in your search.

It's that simple!

Our New Website

2007-05-17T07:11:00.000-07:00

Now is the time to buy! If you are interested in purchase or refinancing you can click on the Mortgage link on the right side of this screen and click on Loan Application. Scroll down to my name and you will see my picture (I look like a bird in that picture) and fill out your application! Have a great day!

New Website up and running!

2007-05-15T09:09:00.000-07:00

Hey everyone my Mortgage company has a new website www.loansuc.com you can log on and fill out your mortgage application! Sorry it's been so long since the last post. It's the spring and it's very busy! Make it a great day.

As Promised

2007-04-15T15:04:00.000-07:00

Hey everyone! As promised I posted some pictures from our trip to Guatemala. There is a link on the bottom right of the web page. Have a great day!

Before you buy get pre-approved!

2007-03-26T06:38:00.000-07:00

Before calling your professional agent, get pre-approved! Getting pre-approved will keep you from looking at homes you can't afford. Not to be confused with a pre-qualification. A pre-qualification is just a review of your finances. A pre-approval equips you to make a strong offer in confidence knowing that your financing will not be a problem. The weather is getting warm and the market is gaining momentum. Now is the time to get pre-approved!

Attitude

2007-03-22T06:56:00.000-07:00

I visit a lot of real estate offices and one of the things that is really getting to me is the complaining. It's in the mortgage world as well. This is not the real estate market that it was four years ago, but instead of complaining we should try to think of creative and innovative ideas to grow our business. Mumbling and complaining only makes things worse. Let's MAKE it a great day and a great year!

Credit..Final Entry

2007-03-20T07:19:00.000-07:00

Hey everyone. My wife and I had a great trip to Guatemala. We are so blessed to live in America! I will post some pictures really soon. Here is my final entry for credit. I am just going to break it all down.

35% Payment History
30% Amounts Owed
15% Length of Credit History
10% New Credit
10% Types of credit used.

If you have any more questions about credit please feel free to e-mail me or give me a call. Have a great day!

Credit Entry #2

2007-03-14T06:35:00.000-07:00

Yesterday we went over how payment history affects your credit. Amounts owed also affects your credit score. It makes up 30% of your total credit score. Below is an itemized list.

- Amount owing on specific types of accounts
- Lack of specific type of balance (trade lines)
- Proportion of credit line used. Try to keep your credit cards under 33% of limit
- Proportion of installment loan amounts still owing

My wife and I are going to Guatemala tomorrow to do humanitarian work. I will finish up on credit next Tuesday and post up some pictures from our trip. Have a great weekend!

Credit Entry #1

2007-03-13T07:17:00.000-07:00

A credit score is a mathematical model that evaluates many types of information on file. Various factors determine your credit score and I will be going over those over the next week or so. Each factor carries a certain percentage that determines a credit score. One factor is your payment history. It makes up 35% of your credit score! Any recent delinquent payments, frequency of delinquent payments and the severity can affect your score in a negative way. A 90 day would be more sever than a 30 day for instance. Tomorrow we will discuss two of the other factors. Have a great day!

Bad Credit? Now is the time to get started!

2007-03-12T06:29:00.000-07:00

Credit is a great tool when financial institutions try to decide on borrower eligibility, but it's not always accurate! If you have poor credit now is the time to get a plan in order to buy a house, or apply for a mortgage. Due to the foreclosure rate in Michigan and pressure from the government, sub-prime lenders are not as lenient as they were even eight months ago. Many lenders have pulled out of Michigan all together! What can you do? Apply for a loan now or get a plan to clean up your credit if you plan on buying in the future. It's never too late to work on your credit. The next few blog entries will be dedicated to credit. Many of my customers do not have perfect credit, but I work with them and six months later get them into a house. Financial peace is the ultimate goal. Even if you are not planning on buying a home, the next few blog entries can help! Till tomorrow!

Top Ten American Houses

2007-03-09T06:14:00.000-08:00

I put a new link up in the real estate links section on the right. It's for America's Top Ten Houses by money.com. I am a big Frank Lloyd Wright fan and he has a few houses in there. Check it out and enjoy your friday!

Another "Before You Buy" Entry......

2007-03-08T08:24:00.000-08:00

I know I have put up a "before you buy" blog entry before, but I really want to make sure that buyers know exactly what they are getting into. When making the decision of buying or renting consider these points.

1. How long do you want to live in that particular area
2. What is your financial situation (Use my rule of thumb entry below to help you out)
3. Current mortgage interest rates
4. Tax consequences of owning versus renting property
5. What may happen to tax laws and home prices in the future

If you need any help with these factors talk to an honest broker or realtor. Have a great day!

Crying shame!

2007-03-06T13:22:00.001-08:00

A Good Rule of Thumb

2007-03-06T06:31:00.000-08:00

Owning a home is a big responsibility and it's important to measure your risk before you make your next move. A good rule of thumb when trying to decide how much to borrow is to add your monthly cost of buying and maintaining a home-mortgage payments, taxes and insurance. It should not exceed 28% of your gross (before tax) monthly income. The payments on all debts (credit cards, cars etc.) should not exceed 40%. An example is below.

$3,000.00 gross monthly income x 28%= 840 total housing expense ratio
$3,000.00 gross monthly income x 40%= $1,200.00 total housing and other debts (DTI)

I am making a funny mortgage video that I will be posting soon so stay tuned. Have a great day!

Creative Financing

2007-03-05T06:36:00.000-08:00

Many first time homebuyers and buyers with less than perfect credit often feel like they have little or no options when buying a home. In a previous blog entry I listed the benefits of using a mortgage broker. If you go into a bank and they deny your loan, the banker will get paid regardless. Brokers can be very creative when it comes to financing. We work with literally hundreds of lenders and can usually find a spot for everyone. Interest rates are still very low and the market is very soft. Now is the time to buy even if you have less than perfect credit or very little money for a down payment. Until tomorrow……

It's a great time to buy!

2007-03-02T05:56:00.000-08:00

I visit a lot of real estate offices, title companies and banks and its official. It’s a buyers market! What is so great about this market is that you can almost name your price. Unfortunately a lot of jobs have left Michigan and houses are just sitting on the market. One of the great things about this market is that rates are still very low!!! We have heard a lot of hype about rates over the past couple of years from mortgage companies looking to cash in on the refinance boom. Now that almost everyone has refinanced the hype has cooled. For people looking to purchase a home the rates are still very good. It's a great time to buy!

VA Loans

2007-03-01T05:58:00.000-08:00

VA loans are great for first time homebuyers who served in the military. You can finance almost everything into your loan and get into it with no money down. There are a few warnings about VA loans. If you are not a first time homebuyer and you want to use your VA benefit a second time you will be charged a VA funding fee of 1.5%. It may be more beneficial to do a conventional mortgage the second time around. Ask your loan officer if VA is the best option for you. One of the benefits of a VA loan is that it does not require mortgage insurance. Depending on your loan to value, you may not have to pay mortgage insurance on your second home. You could also buy down your rate instead of paying a funding fee and the mortgage insurance could be a wash. Ask you loan officer before you lock in your loan. Have a great day!

Broker vs. Banker

2007-02-26T05:49:00.000-08:00

There are many benefits to using a broker over a banker. What are they? Brokers get paid when they write loans, bankers get paid regardless. Brokers work when there is work. Bankers work during the day. Familiar with the term "banker’s hours"? What about flexible lending options? Not all borrowers have perfect credit. Some have below average credit for very valid reasons, such as medical expenses or emergencies. Banks may not even talk to them, but brokers work with hundreds of lenders and can usually find a lender for their client. There are many benefits for the customer to use a broker. If you get a good broker it is very beneficial. One good thing about using a bank is reputation. Banks are better regulated than brokers and if you get a bad broker they may try to take advantage of you. When you are working with a bank or a broker make sure you have a good relationship with your loan originator. Till tomorrow!

Out for the week

2007-02-20T16:20:00.000-08:00

I am in class all week, but I will continue to post on monday.

Stated Income

2007-02-16T06:12:00.000-08:00

As mentioned in the previous blog post there is a loan that will allow you to state your income. No pay stubs required. However, most investors require a verbal or written verification of employment. There are a few guidelines that you must remember. Investors do require a reasonable income. For instance you can't state 100k a year when you are employed at a job that normally pays minimum wage. Assets will strengthen your loan application when you are doing a stated income loan. If you have a 401k or a significant amount of assets in any account tell your loan officer. This loan was created for self employed and commission employees who have trouble proving all of there income. Have a great weekend!

Commission or Self Employed?

2007-02-15T06:19:00.000-08:00

I work with many clients who are either self employed or get paid on commission. Often times when I inquire about my client’s income, they state a figure before any deductions and in most cases I am required to use a lower amount for income. I do not believe my clients are lying to me, but they may not understand how banks calculate income. How do banks calculate commissioned and self employed clients? Most investors require two years of employment in the same line of work. What you can do to figure your income is add the last two years gross income after all of your tax write off’s. Take the number and divide by 24. They want your monthly average for the last two years. I put an example below.

2005 Income 2006 Income Months Income Used

($75,000.00 + 62,000) / 24 = $5,708.33

In some cases business owners and commissioned employees may want to choose a stated income or no documentation loan. We will discuss that tomorrow. Till then happy buying and selling!

Secondphobia?

2007-02-14T08:07:00.000-08:00

I speak with some clients who have a fear of second mortgages. Secondphobia is understandable, but is not always good. Many people have misconceptions of second mortgages. Years ago second mortgages were not as common as they are today, but back then people were less willing to spend more than they make. Unfortunately in society’s quest to keep up with Jones’s people over spend and get themselves into tight situations. If you have untapped equity in your home, you may want to access that to consolidate your debt and change your spending habits to keep yourself from getting into that situation again. In most cases the interest you pay on the second mortgage is tax deductible and depending on your credit score, your interest rate could be lower than what you are paying on your unsecured debt. Until tomorrow…..

80/20? Who likes fractions?

2007-02-13T06:09:00.000-08:00

In every industry there is jargon and unfortunately I think banking has the most by far. Remember fractions? Most people don’t use them every day like we were all warned by our math teachers. One fraction in particular has made it into the industry and it’s 80/20. It’s not really a fraction as much as it is a banker’s vocabulary word. This simply means doing 80% of your purchase price on one loan and 20% on the other loan. This will keep you from paying mortgage insurance. However, this is not always the best for the customer. The problem with the second mortgage is that interest rates are typically higher than on second mortgages. If your rate is high enough on the second mortgage your payment may be more than if you took one loan and paid mortgage insurance. You have to balance it out. Also, often times the second mortgage is interest only. This may save you a small amount off your monthly payment, but in most cases it’s really not worth it. Until tomorrow happy buying and selling!

Mortgage Insurance?

2007-02-12T06:04:00.000-08:00

What is mortgage insurance? Some people are under the impression that it's an insurance that will pay off your mortgage in case of an emergency. This is the wrong impression. Many years ago consumers could not purchase a home with no money down. Often times a down payment was a gift from friends or family. It was too risky per investors. Over time investors began to realize that there was a market for no money down loans. How would they manage the risk? Mortgage insurance. On a conventional loan you are required to pay mortgage insurance if your Loan to Value (see previous blog post) is over 80%. If you default on your loan the mortgage insurance protects the investor not the home owner. Many brokers and bankers will do 80% loan to value on one loan and write a second mortgage on your home for the other 20%. This will keep the buyer from paying monthly mortgage insurance premiums. Beware of FHA mortgage insurance. The premium is less than a conventional loan, but you are required to pay mortgage insurance for five years regardless of your homes appreciation of if you pay the balance down below 80% loan to value. We will discuss 80/20 loans tomorrow. Until then happy buying and selling!

How To Calculate Your Loan To Value Ratio

2007-02-09T06:21:00.000-08:00

Loan to value is a very important ratio when it comes to lending. It's often referred to as LTV. How do you calculate and why is it so important? In order to calculate your loan to value you take the loan balance and divide by the value of your home. I provided an example below:

Loan Value LTV
85k / 100k = 85%

Why is it so important when it comes to lending? It's a measurement of risk. The lower your LTV the less likely you will default. If a person has a substantial amount of equity in their home, they are less likely to walk away from it. The lower the LTV the lower your rate and in most cases if you are under 80% LTV you will not have to pay mortgage insurance. What is mortgage insurance and why are some people required to pay it? We will discuss that tomorrow. Till then, happy buying and selling!