Michigan Mortgage Blog by Mortgage Matt of Icon Mortgage

Michigan First Time Home Buyer: An Overall Guide For a first time buyer, there is so much to worry about and so many levels of details to address, that I just want to provide a good general guide to how to start the process. You can refer to my other blogs for more detail, but I think this is a great overview. Purchasing anything, will cost you money. A home is the biggest purchase you will ever make, but most people expect to spend less than when getting an apartment. Any decent complex will want first, last, and possibly a security deposit. That’s at the very least $1000. Have this much at the very least before you consider buying a home, otherwise you really are setting yourself up for failure. Now, Before you do anything else, find a loan officer. Before you contact a Realtor, before you look at homes, you have to qualify. In today’s market there are so many intricacies to qualifying that the first thing you need is to get approved. Approved, not pre-approved like so many tell you....

First Time Home Buyer: Conforming at a glance The following was a general overview of the Conforming loan programs such as those offered by Fannie Mae or Freddie Mac and a guide to figure out if this is the loan program for you. Availability: Available in all areas. Type of Homes they finance: Single Family Properties and Multi-Family Properties will qualify. Site Condos are viewed the same as Attached Condominium Properties and are acceptable if they are approved condominium projects. You can search approved projects here: ******. Manufactured properties, Modular, Stick-Built, or BOCA-code properties are acceptable in some circumstances but not likely to be accepted. Working Farms, unique properties, and dome-homes will not qualify. Down Payment Required: 10% or greater in conjunction with Private Mortgage Insurance. 20% to meet conforming loan standards. In general, funds for down payment can be a gift from family. Private Mortgage Insurance: Emphasis on the “Private” since it is obt...

First Time Home Buyer: FHA at a glance The following was a general overview of the FHA loan program and a guide to figure out if this is the loan program for you. Availability: Available in all areas. Type of Homes they finance: Most property types. Single Family Properties and Multi-Family Properties will qualify. Site Condos are viewed the same as Attached Condominium Properties and are acceptable if they are approved condominium projects. You can search approved projects here: ******. Manufactured properties are acceptable if they meet individual lender requirements. Modular, Stick-Built, or BOCA-code properties are acceptable. Working Farms, unique properties, and dome-homes will not qualify. Down Payment Required: 3.5%. Can be a gift from family, friend, or employer. Down payment assistance is only available from grant programs. Mortgage Insurance: 1.75% financed into your loan and and .55% is billed monthly. Interest Rates: Vary greatly because of the great variance between lende...

First Time Home Buyer: Rural Development at a glance The following was a general overview of the Rural Development loan program and a guide to figure out if this is the loan program for you. Availability: Available outside of high-density urban areas. For a more detailed area of qualification contact your lender or view our website: www.iconmortgagelending.com Type of Homes they finance: Most property types. Single Family Properties, Site Condos, Multi-Family Properties, Modular, Stick-Built, BOCA-Code, large parcels, and some unique properties will qualify. Attached Condominium Properties are acceptable if they are approved condominium projects, you can contact your lender to check on approved condominiums. Manufactured properties will NOT qualify unless they are newly built and permanently attached to a property. *Properties with in-ground pools will come under added scrutiny. Down Payment Required: No down payment is required. Any down payment can be a gift from family, friend, or e...

So, regardless all of the jibber-jabber out of Washington lending is continuing to tighten. I figured I would write just a general overview of some of the significant changes or non-changes here in my blog in case any of these issues may affect you. First Time Home Buyers: Most of the news for you is good. So much is aimed at finding you and inspiring you to help get the economy moving again, that your business is still in demand. The current change is that banks are looking for a little more investment on your part to ensure that they are making a good investment with you. This doesn’t necessarily mean a down payment, but do expect to be accountable for past credit discretions and to able to show paperwork on where you are getting the money to pay for your appraisal, down payment, or other requirements. This can still be a gift from family, but expect to show proof of where you are getting it. More emphasis if being put on the 620 FICO phenomenon on a daily basis. Those borrowers ove...

I will be adding to this list as I go along, but I wanted to start a nice comprehensive FAQ for homebuyers. I put “first time” in parenthesis because really this can apply to anyone buying a home, but this will apply mainly to the questions I get from first time homebuyers. Q: Why buy instead of rent? A: Well, pride of ownership and having something that is yours to do with what you want. A home is also a long-term investment for your future. Don’t let all of the exploding market talk scare you. Real Estate prices go up and down, but just like investing in stocks, you buy low and sell high based on when you enter the market. If you put yourself in a position where you have to sell within a very short period of time you had better make a sound investment or you will fail as many are now failing because they relied on an implied return without realizing preparing for a long-term goal. In addition to the equity investment, a home is also a valuable tax incentive. You can deduct your mortg...

I find that the first hurdle a First Time Buyer faces is getting their paperwork together. I am not sure why, but honestly this simple task dissuades many people when they start to apply. Perhaps following this list and having it ready at the outset will help the process seem smoother. Last two years of W-2s or Tax Returns. If you can’t find them, you can always contact your employer, your tax preparer, or the IRS for a copy. Most recent month of pay stubs. 1 month worth…the most recent available. Most recent 2 Months of bank statements. If you don’t get paper statements, you can print your online statements, but you will need to take them to your bank to get verified and stamped. Most recent 401k statement. (If you have one.) Copy of your driver’s license and social security card. The Patriot Act requires us to check these. Have these items ready to go before you look for a loan officer and DO NOT trust anyone that will try to quote you a payment or interest rate before they even see ...

For a first time buyer, there is so much to worry about and so many levels of details to address, that I just want to provide a good general guide to how to start the process. You can refer to my other blogs for more detail, but I think this is a great overview. Purchasing anything, will cost you money. A home is the biggest purchase you will ever make, but most people expect to spend less than when getting an apartment. Any decent complex will want first, last, and possibly a security deposit. That’s at the very least $1000. Have this much before you consider buying a home. Now, Before you do anything else, find a loan officer. Before you contact a Realtor, before you look at homes, you have to qualify. In today’s market there are so many intricacies to qualifying that the first thing you need is to get approved. Approved, not pre-approved like so many tell you. Finding a good loan officer is finding someone that doesn’t talk about pre-approval. Find one that runs Underwriting and a...

What is it? An escrow account is basically a mandatory savings account to pay your taxes and insurance from. Every month you will pay your mortgage payment and a portion of that payment will go to the mortgage and a portion will go to the escrow account. When your tax and insurance bills come due, they will be paid from your escrow account company automatically. You will never see a tax or insurance bill, yet they will get paid. Why do you need it? With almost all loans an escrow account is required by the lender you are getting your loan from. The same as with your mortgage payment, if you do not pay your taxes, you will face foreclosure. Instead of being foreclosed on by your lender, you will be foreclosed on by Uncle Same. The possibility of tax foreclosure threatens your lender’s ability to ensure you repay them. Hence, they require that you have an escrow account so that you can’t simply stop paying your taxes. How will this affect your closing? You will need to fund the escrow...

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...

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...

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...

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...

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 ...