Michigan Mortgage Blog by Mortgage Matt of Icon Mortgage

It’s so odd to me that so many people claim to have been mistreated by their mortgage lender. There is a litany of paperwork we are required to provide to you when you apply. I am sure there were plenty of less than reputable loan officers out there that didn’t care to go through the numbers, but an even slightly educated borrower can’t be taken advantage of. So, here’s how to become an educated borrower. The Good Faith Estimate. Make sure you get one, make sure you get one from several lenders, make sure you compare them row by row and not the bottom line. Some lenders may trick you by not providing certain numbers that will pop up later (read my other blogs), make sure you don’t use anyone that leaves numbers off. The Borrower’s Bill of Rights. Make sure you get one, make sure you understand it. You can get it right here: Borrower’s Bill of Rights, but don’t trust anyone that doesn’t give you one- you know since it’s required by law and all. They are easily understandable, just act...

Call me a softy and a nerd. It’s hard to believe, but yes I was one of the few that sat and watched Steve Preston’s address to the National Press Club this past Wednesday. Many of you may not know who that is, but he is one of the most powerful people in the nation right now because he is the Secretary of the U.S Department of Housing and Urban Development (HUD) and he is trying to create hope for thousands of Americans that are currently facing foreclosure, or are soon to be facing foreclosure. Unfortunately, as powerful as he may be, he is still all but hog tied by private industry and private industry is not budging. How bad is it? It was said that in the first two weeks of October 42 people applied for the Hope for Homeowners and all 42 were denied. First of all…42? Nationwide 42??? That’s a joke. A joke that Steve Preston did not find funny. Why has it failed? Simple, the private markets are already strapped for cash and not looking to spend more. FHA’s flaw is that it cannot move...

I talk to hundreds of first time buyers year after year and there are hundreds that don’t qualify by just a bit. They are so close but can’t get it done. I explain to them how close they are and offer direct advice on how just a month or two of fixing their issues will get them where they want. I go through the trouble to give them the advice they need knowing full well that they will not follow up. Whether it is the lack of confidence to overcome or just plain laziness, so many of them give up and never come back. So if you are just dipping your feet in the water and thinking about buying in the near future, let this help you prepare now to never have to feel the sting of denial. Your Income: I know a lot of you work jobs where you get tips, or you are just now getting raises, or are new on the job. If you are in any type of training period you will not be able to get a mortgage, but don’t worry as soon are that’s done, you are qualified. If you have gotten tips and never claimed muc...

There is a whole bunch of confusion concerning this new First Time Home Buyer Tax Credit and I am looking to simplify things for you like I have been trying to do with all of my blogs. I think that the most important thing to realize here is that it is not free money! It is not. It is in effect a no-interest loan from the government. It is to be repaid over a 15 year period. You won’t be able to default because it will be taken out of your income tax refund of added to your charge every year. So, I shouldn’t take it? Of course you should take it! If you aren’t sure why you should, call up Citibank and try to get a 0% loan from them with a 15-year term. Unless you are complexly set credit and savings wise…which I think it pretty much NOBODY in Michigan, you should take advantage of this. What you have to be careful of is blowing this money on useless stuff and then ending up owing it back to government. There are many good ways to use this money, here are a few examples: Pay down the p...

If you are going to buy a home in Michigan, especially in this foreclosure driven market, nothing is more important than the team of professionals you choose to represent you. Consider these points in your search. Rome wasn’t built in a day. Do you not rush into any situation. Take at least a week to look around for reputable companies to deal with. Talk to friends and family, do some research on a few companies you target, and never consider only one source for information. Your loan officer is the first step and most important step. This person will be digging through all of your most personal documents, and trust is necessary. It should probably be an actual person that you actually meet and actually believe in. The biggest mistake is to judge just by numbers and promises, which are easily fabricated. Judge their willingness to provide written estimates of their services. Sit back, and listen…are they mentioning a Good Faith Estimate? If they don’t chances are they want to tell you...

I know, seems so simple. Pay your bills on time, don’t claim bankruptcy, but there is a lot more to it than that. So, what goes into a good credit score? Good Payment History: Obviously. Length of Payment History: One of the distinct disadvantages of a younger person. Balance to Limit Ratio: For your credit cards it is essential to keep the balance below 50 percent. If you really want to have great credit, 30% is even better. The dollar amount is not important, it’s the percentage. Diversity of Accounts: Mortages, car loans, installment loans, student loans, credit cards, and charge cards they all help to show the variety of debt that you can properly manage. Manageable Inquiries: No more than one per month. This will show that you are not trying to obtain new debt at a rate faster than you can handle. Solely Owned Debt: Fairly new to the credit factor, but it is essential to have debt you obtained on your own rather than cosigned accounts. Take all of these into consideration wh...

I have close a lot of foreclosure purchases over the last two years and have ran into some very odd demands from the selling banks. I would like to provide you with some of this information now on what these banks can and can not do that might help you in your own pursuit. They can demand that you provide them with a pre-approval letter. They can not demand that you obtain a pre-approval letter from any specific lender or broker. The doesn’t mean you won’t be told otherwise, but RESPA prohibits a seller, real estate agent, insurance agent, or anyone else from demanding an individual use any specific lender. They can demand that your lender’s pre-approval letter states that you are credit worthy. They can not demand to have your credit report or credit scores be provided to them. The Gramm-Leach-Bliley Act protects your privacy from any entity involved in the transaction that is not your financial service provider. You can give written permission for the selling bank to see these, b...

I know it is hard to understand exactly what your credit score is, how it is calculated, and especially how it affects you when you want to buy a home. Here is a general, and easy to understand guide to your score in reference to obtaining a mortgage. Below 500: Well I can’t sugar coat it, you are in pretty deep. This is where it may be a good option to seek consultation from a good attorney or a non-profit credit repair service (emphasis on non-profit). 501-560: You score is pretty low, but not beyond repair. You will not be able to qualify for a mortgage while your score is in this range. However, if you struggle through some high interest credit cards, maybe a secured card or two, you can bring it up. 561-619: You can probably obtain a mortgage, but it will be a very trying experience. You may be better served by simply waiting a month or two, trying to pay down some credit card balances, whatever you can do to optimize your score. 620-680: It may still seem just average, but in...

Bum Bum Buummm. Enter scary music and cold sweats, you just fell in love with a home that has a broken furnace and a big orange stain where a bathtub used to be. Chances are your financing is going to resemble that orange gunk on the tile right? There are options. With conventional financing, yes you will be sunk. The bank will only want a safe asset to secure. There are some programs that allow flexibility here like HomePossible, but it is very impractical. The good news is, that with the foreclosure boom, came the need to repair existing homes as production of new homes slowed to a crawl. Government financing fills the void of sensible repair financing. Actually it filled a long time ago before the housing boom started and home construction grew out of control. With FHA there is a possibility for a repair escrow; however the repairs must be minimal. The better option is the 203k loan that will allow a closing to take place like normal but provide you with money for all sorts of repa...

We all hate it…but few of us know what it is. First, the insurance I am talking about is different than what you would get from AAA, which is home owner's insurance. A lot of first time buyers get that confused. It is very similar though, except instead of you insuring your home, the lender is insuring its money. When you get a loan, if you put less than 20% as a down payment, the lender requires you to pay an insurance premium on this 20% that they are lending you. This is strictly for your lender and it is insurance for them in case you do not pay them back...the 20% would be covered on the insurance that you pay each month for them as a part of your mortgage payment. It is basically a penalty for not putting down the “standard” down payment amount. If you look at the bottom of the GFE your loan officer provides you, it breaks down the payment and what goes where. You will see “mtg. insurance” and the monthly affect on your payment. Unfortunately, if you are putting less than 20...

We have talked about a lot of different aspects about buying a foreclosure property. I realize now that I have yet to give you the most important overview people want- a timeline expectation. Let me remedy that now by explaining what needs to be done and what the reasonable expectation should be. You found your dream home, and you made an offer, now what? Well this is the second hardest time of the entire transaction- waiting to hear from the bank. This can take anywhere from a day to a week or two all depending on what bank owns the property. The best thing to do during this time is to talk to your loan officer as much as possible. Make sure you ask to actually submit your loan to the underwriter, rather than rely on a pre-approval. This is precious time to work on clearing conditions that most loan officers will squander if you let them. Your offer was accepted, what still needs to be done? Assuming you used a good loan officer, underwriting is mostly done. There are still many thing...

Undoubtedly, one of the first concerns of a first time buyer is their credit. What I see in a lot of first timers is merely a confidence issue. Like I said, this starts with credit but permeates every aspect of the loan process. Much like any good team, confidence in each other is really the fuel that fires success. I have this conversation with all of my first time buyers. If you don’t believe in me, don’t use me. The same way that if I don’t believe in you, I won’t work for you. Especially in this foreclosure driven market, you can’t go half-hearted into a trying transaction. What makes so many first time buyers lack confidence in their credit? They have only had a few opportunities to get credit. Most potential first time home buyers that don’t get approved, simply have never had any credit. An old collection from Sprint, will not get it done. However, if you have an auto loan or a credit card (preferably both) we are in business. I know it may not seem like much, but it works. Und...

Come find out how Icon Mortgage Lending empowers Michigan Home Buyers and let us give YOU the ultimate feeling of buying power. We know how important the bottom line is to you. You want to know upfront how much money is required to close on your new home. At Icon, we give YOU the ability to eliminate this worry all together. YOU have the power to chose to pay your costs at closing or to finance them. We think you should keep your money where it belongs- in YOUR POCKET! As always, we give our clients a full look at the numbers before you even start your shopping. Michigan Foreclosure Purchase has a new energy. What kills more loans than anything else when trying to buy a foreclosure property? Minor repairs your lender requires before you can close. Other lenders will tell you to go in and fix these if you want to close. Repair a house you don’t even know will be yours or not??? Don’t listen to them! We can get you the money to make these repairs as an escrow without holding up the clos...

First, why would you want concessions? Well if you refer to my other blogs about closing costs, you will see all the various closing costs and pre-paid items involved with obtaining a mortgage. All of these costs will need to be paid at the closing table. The financing you are obtaining will most likely not allow you to include these in your loan amount. Most mortgage programs will not allow your loan amount to go over the purchase price. In fact, there is only one viable mortgage program left that will allow you to roll your closing costs in without seller’s concession. Depending on your financial situation or your ability to leverage, you may not want to bring all of this money to the table to close. The concessions provide a way for the seller to pay them as a part of the transaction. Ultimately, you are still paying for them as a part of your purchase price, but with concessions you will be paying them over the course of 30 years instead of paying them upfront. Free money? Awesom...

So, you want to buy a home, but with so much new to you it can become a whirlwind of confusion and indecision. That’s why I bring you this vastly important blog about the mental aspect and general overview of being a first time home buyer. First, don’t panic. Listen to the people and professionals around you, filter it through your own common sense, and believe in yourself. I want to own a home so much that I won’t: Listen, much like dealing with yet another embarrassing season from the Lions…you will go through many emotional stages when buying a home ranging from: “we’re only 0 and 4 and still in the hunt,” to, “WHY DID THEY SIGNED CULPEPPER?” This translates into your situation as, “We can get so much for so little,” to, “EVERYTHING IS TOO EXPENSIVE.” The most important things to realize are the same lessons that thousands of Americans learned when the housing bubble burst. It’s not a house; it’s a home. It’s not a status symbol; it’s where you build your future. And, it’s not a...

Let's face it, the only properties that are really selling in Michigan, well most of the country actually are foreclosures. While this market does present a unique opportunity for purchasers to end up with a steal, it is also a very tough transaction which will require a lot of patience and savvy on your part. I offer you this Foreclosure Survival Guide now, to hopefully save you some headaches once you are already in the process. 1. Patience Really is a Virtue. The first thing to realize is that purchasing a home is in many ways exciting and in even more ways stressful. It used to be, that we could get a purchase mortgage closed in about 2 weeks. With a foreclosure purchase, it could take 2 weeks just to get the bank (meaning the bank that owns the property) to sign a purchase agreement. In general, you should plan on about 25-45 days from start to finish. Most of this depends on the bank and how fast they are to respond. 2. Expect the Unexpected...huh? Dealing with a bank as th...

We have all heard horror stories about good folks being buried in surprise fees, or fees being buried so deep in paperwork that nobody could tell who was getting what. Please use this as a common sense approach to making sure you are getting a good deal on your mortgage. I will start by listing the fees that all loans will be charged. These, no matter what someone tells you, will ALWAYS be charged to close a loan. 1. Title Charges: $350-450 for a closing fee . You pay this to the person that coordinates your closing and goes through the paperwork with you and tells you where to sign. If you have the choice in title company you may get a better price, but with a purchase (particularly a foreclosure purchase) expect $450. $350-$? For title insurance. This is charged based on your loan amount. In general if you take your loan amt. In Thousands multiplied by 3.5, you will get the answer. So for $100,000 loan amount you figure as (100x3.5=$350). Note: When purchasing a foreclosure, plan o...

The number one question we get in the mortgage business is: What will my interest rate be? It's an important question to ask, that is agreeable by all. But, more importantly than asking the question is to know whether you are getting a straight answer or not. That's why I ask you to consider these important points before shopping for a mortgage. Never Trust any lender about your interest rate until you are shown a rate lock. This is the most important point...do NOT trust a lender about your interest rate until it is written in stone. I talk to hundreds of people every month and their first concern is always the rate. I say to myself, "Self, you know was well as I do, that I am going to tell this person the truth about needing to apply before we talk about rates, yet I have only a 50/50 chance of landing this client." The reason being simple...if they talk to someone else, they probably are going to get the same old lame lines about how rates are low and that they h...

I have written a few different blogs about closing costs and how to understand where your precious pennies go. This time I am focusing on one of the most misunderstood sections of the Good Faith Estimate (GFE)- The Pre-Paid Items. Don't worry "pre-paid" simply means paid at the closing, whether paid for by you or by the seller as a part of the seller's concessions, but nothing is due prior to closing. 1. Per Diem Interest: A good way to spot a phony loan officer is one that only uses a day or two of per diem on their GFE because it is an easy way to shave off a couple hundred bucks from your bottom line and easily explainable as a last minute change. So what's this for anyways? It's your first mortgage payment (but just the interest portion)- calculated from the day of your closing until the end of the month. You won't have a payment due for the next month. The interest collects through the month and your first principle and interest payment (P&I) is ...