When you are preparing to buy a home, whether it’s your first home or your fifth, the process may seem overwhelming.
This is the biggest purchase of your life, so it pays to be prepared. Here are five things to avoid when buying a home.
Don’t Rush Into a Decision
Buying a home is a major investment and it’s important to take your time and make an informed decision. Don’t feel pressured to make an offer on a home without thoroughly researching the property and the area.
Don’t Ignore the Hidden Costs
The price of the home is not the only cost you need to consider. There may be hidden costs such as property taxes, homeowner association fees, and maintenance and repair expenses that can add up quickly.
Don’t Ignore the Home Inspection
A home inspection is a crucial step in the home buying process as it can reveal potential issues with the property that may not be visible to the naked eye. Don’t skip or ignore the inspection as it can help you make an informed decision and negotiate repairs or price adjustments with the seller.
Don’t Overextend Your Budget
It’s important to have a clear understanding of your financial situation and not overextend your budget when buying a home. Consider all of your expenses, including mortgage payments, utilities, and maintenance costs, and make sure you can comfortably afford them.
Don’t Forget About Resale Value
While it may not be on your mind when you’re buying a home, it’s important to consider the resale value of the property. Factors such as location, school district, and neighborhood can all impact the resale value of a home, so it’s important to keep this in mind when making your decision.
If you’re ready to start your journey to homeownership, give us a call! We’re here to guide you every step of the way.
https://www.michmortgage.com/wp-content/uploads/2023/04/gardening.jpg900900Courtney Coonhttp://www.michmortgage.com/wp-content/uploads/2017/12/MM-for-white-background-300x105.pngCourtney Coon2023-04-17 09:34:062023-04-17 09:51:04Five Things to Avoid When Buying a Home
If you’re in the market for a new home, your credit score will determine whether or not you’re eligible. Your score will determine the loan program you qualify for and your interest rate. Your credit score may be the single most important asset you have.
You spend years building your score – here are a few tips to help you maintain it.
Make your payments on time. According to experts, a large portion of your credit score (35 percent, to be exact) is calculated based on payment history. Making your payments on time (within 30 days of the due date), every time can greatly impact your score. This includes credit card bills or any loans you may have, such as auto loans or student loans, your rent, utilities, phone bill and so on.
Consider setting up autopay when it’s available so you don’t run the risk of missing payments.
Keep your balances low. 30%. That’s the magic number! As soon as your credit card balance exceeds 30% of your credit limit, your credit score will decrease. Your score will continue to decrease until you bring your balance below the threshold.
Experts recommend that you pay off your entire balance every month. We know that’s not always realistic, but you should always at least make the minimum payment.
Be cautious when opening new accounts.According to Experian, “Each application can lead to a hard inquiry, which may hurt your scores a little, but inquiries can add up and have a compounding effect on your credit scores. Opening a new account will also decrease your average age of accounts, and that could also hurt your scores.”
There is one exception to this rule. If you’re shopping for a new car or home, it’s OK to shop around and have multiple lenders pull your credit. If these credit pulls occur during the same time frame, they are often ignored by credit bureaus.
Check your credit score regularly. If you practice tips 1 – 3 but forget to do #4, you’re setting yourself up for possible risk. Mistakes are known to happen, and reporting errors can have a negative impact on your score. If someone steals your identity and opens a new line of credit in your name, how will you know if you don’t regularly monitor your score?
If you find a credit reporting error, dispute the mistakes with the appropriate credit reporting agency and your score may improve.
If you have additional questions about your credit score, give us a call! We’re happy to help in any way we can.
https://www.michmortgage.com/wp-content/uploads/2021/03/Notebook.jpg620620Courtney Coonhttp://www.michmortgage.com/wp-content/uploads/2017/12/MM-for-white-background-300x105.pngCourtney Coon2022-11-18 11:24:282022-11-18 11:24:28Tips to Maintain a Good Credit Score
If you’re a first-time home buyer, getting enough money for a down payment can seem like a major hurdle. But there’s good news! The Michigan State Housing Development Authority (MSHDA) has a program that helps home buyers afford their down payment by loaning them up to $10,000 towards it.
This is what you need to know.
WHAT IS MSHDA?
TheMichigan State Housing Development Authority “provides financial and technical assistance through public and private partnerships to create and preserve safe and decent affordable housing, engage in community economic development activities, develop vibrant cities, towns, and villages, and address homeless issues.” Part of its mission is to make owning a home in Michigan an affordable and realistic goal for as many people as possible. In addition to buying a home, it also offers programs for improving existing properties and dealing with foreclosure.
WHAT ASSISTANCE DOES MSHDA OFFER FIRST-TIME HOME BUYERS?
TheMI Home Loan andMI Home Loan Flex programs help first-time buyers with their down payment. In addition to homebuyer education classes, these MSHDA products provide loans of up to $7,500 statewide. In many areas throughout the state, this amount can be increased to $10,000. (Seethis ZIP code list orstate map to see which areas qualify for larger MI Home Loan amounts.)
WHO QUALIFIES FOR FIRST-TIME MSHDA HOME BUYER ASSISTANCE?
If this is your first time buying a home, you should look into the MI Home Loan and MI Home Loan Flex programs. To qualify, you must meet the following requirements:
Additionally, only homes that are priced $224,500 or less are eligible for assistance with down payment.
IS MI HOME LOAN ONLY FOR FIRST-TIME HOME BUYERS?
No – MI Home Flex is available to all home buyers that meet its criteria. And in certaintargeted areas, MI Home Loan is available to both new and repeat home buyers.
SHOULD FIRST-TIME HOME BUYERS CHOOSE MSHDA’S MI HOME OR MI HOME FLEX?
That depends on your financial and personal circumstances. MI Home Flex is a little more flexible and only requires one adult to apply (i.e. one partner out of a couple). Consult with a loan professional for more details – they will help you determine which best meets your needs.
As Michigan’s top MSHDA lender, Michigan Mortgage is ready to help you understand what Michiganloan programs are right for you. We’ve helped many first-time home buyers navigate MSHDA’s Mi Home and MI Home Flex programs, and we can help you find answers toall your home-buying questions.
https://www.michmortgage.com/wp-content/uploads/2022/05/MSHDA-logo.jpg11201120Courtney Coonhttp://www.michmortgage.com/wp-content/uploads/2017/12/MM-for-white-background-300x105.pngCourtney Coon2022-08-08 11:47:302022-08-08 11:47:30MSHDA First-Time Home Buyer Assistance Programs
These three little words will turn the lives of you and your family upside down.
More than 56,000 Michiganders are estimated to be diagnosed with cancer per year. A single diagnosis impacts every aspect of someone’s life, financially and emotionally, effecting not just the patient but everyone around them.
“We are proud to be a part of the solution at Bluebird Cancer Retreats. Our mission is simple: to enhance the lives of those around us experiencing cancer.”
Bluebird was started over 20 years ago by a man named Bill Timm with a cancer diagnosis. His diagnosis led to hope, and hope led to a dream – a dream of sharing inspiration and support with West Michigan. Together with Pete Thuene, Bills dream turned reality.
Today Bluebird Cancer Retreats serves hundreds of participants every year, by utilizing thousands of volunteer hours. Bluebird partners with Bucs Pride, Kathys Krew, Bras for a Cause and many other generous individual donors and business’ throughout Michigan.
“We continue to expand our programming to include community cares baskets for the recently diagnosed, lift of love reclining lift chairs, family camp retreats and the holiday happiness project bringing joy during the holiday season. Not to mention our weekend healing retreats for adults.”
Bluebird will continue to be safe haven and outreach for cancer patients, survivors, caregivers,
and their families for years to come.
“We look to the future to bring our mission to more individuals experiencing cancer, expanding our technology systems, and building a network of virtual support and wellness.”
When you apply for a mortgage, your lender runs a credit report. A key component of the report is your credit score. One of the most commonly used credit scores in the mortgage industry is FICO.
In this article, we describe what FICO is, how it is measured, how it is used when approving you for a mortgage, and steps you can take to maintain and improve your credit score.
What is FICO?
FICO is a credit score created by the Fair Isaac Corporation (FICO). The FICO company specializes in what is known as “predictive analytics,” which means they take information and analyze it to predict what might happen in the future.
In the case of your FICO score, the company looks at your past and current credit usage and assigns a score that predicts how likely you are to pay your bills. Mortgage lenders use the FICO score, along with other details on your credit report, to assess how risky it is to loan you tens or hundreds of thousands of dollars, as well as what interest rate you should pay.
Why is FICO Important?
FICO scores are used in more than 90% of the credit decisions made in the U.S. Having a low FICO score is a deal-breaker with many lenders. There are many different types of credit scores. FICO is the most commonly used score in the mortgage industry.
A lesser-known fact about FICO scores is that some people don’t have them at all. To generate a credit score, a consumer must have a certain amount of available information. To have a FICO score, borrowers should have at least one account that has been open for six or more months and at least one account that has been reported to the credit reporting agencies over the last six months.
FICO Score Ranges
FICO scores range between 300 and 850. A higher number is better. It means you are less risk to a lender.
Scores in the 670-739 range indicate “good” credit history and most lenders will consider this score favorable. Borrowers in the 580-669 range may find it difficult to obtain financing at attractive rates. Less than 580 and it is difficult to get a loan or you may be charged “loan shark” rates.
The best FICO score a consumer can have is 850. Fewer than 1% of consumers have a perfect score. More than two-thirds of consumers have scores that are good or better.
Here’s a breakdown of scoring ranges and what they mean:
Score: <580
Rating: Poor
What It Means: Well below average; Indicates to lenders that you’re a risky borrower
Score: 580-669
Rating: Fair
What It Means: Below average; many lenders will approve loans, but many will not
Score: 670-739
Rating: Good
What It Means: Average or slightly above average; most lenders will approve loans
Score: 740-799
Rating: Very Good
What It Means: Above average; shows lenders you are a dependable borrower; nearly all lenders will approve you
Score: 800+
Rating: Exceptional
What It Means: Well above average; shows lenders you are an exceptional borrower; virtually every lender will approve you
Source: Experian
The 5 Components of a FICO Score
A FICO score take into account five areas to determine the creditworthiness of a borrower:
Payment History. Payment history identifies whether you pay your credit accounts on time. A credit reports shows when payments were submitted and if any were late. The report identifies late or missing payments, as well as any bankruptcies.
Current Indebtedness. This refers to the amount of money you currently owe. Having a lot of debt does not necessarily mean you will have a low credit score. FICO looks at the ratio of money owed to the amount of credit available. For example, if you owe $50,000 but are not close to reaching your overall credit limit, your score can be higher than someone who owes $10,000 but has their lines of credit fully extended.
Length of Credit History. The longer you have had credit, the better your score will be. FICO scores take into account how long the oldest account has been open, the age of the newest account, and the overall average.
Credit Mix. Credit mix identifies your variety of credit accounts — retail accounts, credit cards, installment loans, vehicle loans, mortgages, etc. More variety gives a higher score.
New Credit. New credit refers to recently opened accounts. If you have opened a lot of new accounts in a short period of time, that will lower your score.
How is FICO Calculated?
To determine credit scores, FICO weighs each category differently:
Payment history is 35% of the score
Current indebtedness is 30%
Length of credit history is 15%
Credit mix is10%
New credit is 10%
Here are some things that FICO says it does not factor into its scores:
Participation in a credit counseling program
Employment information, including your salary, occupation, title, employer, date employed or employment history
Where you live
The interest rates on your credit accounts
“Soft” inquiries (requests for your credit report), which include requests you make to see your own credit reports or scores
Any information that has not been proven to be predictive of future credit performance
Tips for Improving Your FICO Score
Here are tips for maintaining and improving your FICO score. The time it takes to improve your credit score depends on the reason your score needs boosting in the first place. If your score is low because you don’t have much credit history, your score can be boosted within months. If your score is low for other reasons, boosting it can take longer.
Keep Credit Balances Below Limits. Getting a high FICO score requires having a mix of credit accounts and maintaining an excellent payment history. You should keep your credit card balances well below their limits. Maxing out credit cards, paying late, and applying for new credit all the time will lower FICO scores.
Dispute Errors. It’s possible to improve your credit score in a matter of weeks. For example, you could successfully dispute errors on your credit report, pay down credit card debt, or pay off collections accounts. These actions could remove negative information from your credit report or add some positive info, either of which may benefit your credit score.
Pay Bills On Time. Realistically, here’s what you need to do: pay your monthly bills on time. A single on-time payment won’t do much to improve your score. Paying your bills regularly on-time will.
Here’s how different actions can negatively affect your credit score and for how long:
Action
Avg. Recovery Time
Credit Score Impact
Applying for Credit
3 months
Minor
Closing an Account
3 months
Minor
Maxing Out a Credit Card
3 months
Moderate
Missed Payment / Default
18 months
Significant
Bankruptcy
6+ years
Significant
Source: VantageScore
Have questions about FICO or anything else mortgage-related? Give us a call!
This blog post was written by experts at Mortgage 1 and originally appeared on www.mortgageone.com. Michigan Mortgage is a DBA of Mortgage 1.
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Our friends at 92.1 WGHN are hosting Story Time and we are so excited to be involved!
We teamed up with the West Michigan Lakeshore Association of Realtors to sponsor the daily segment with Grand Haven Area Public Schools. Tune in at 8:40 a.m. Monday – Friday to hear some of our favorite stories.
Story Time’s first episode aired this morning. Press play below and enjoy a sweet story with your family.
https://www.michmortgage.com/wp-content/uploads/2020/05/Blog-Image.jpg520552Courtney Coonhttp://www.michmortgage.com/wp-content/uploads/2017/12/MM-for-white-background-300x105.pngCourtney Coon2020-05-11 10:52:452020-05-11 10:57:55Story Time with Grand Haven Area Public Schools
2008 was a tough year. Our economy was in turmoil and homeowners struggled to stay afloat. Families across the U.S. – Michigan included – witnessed a housing crunch.
Rock and Jacki Stoltzfus are no exception.
“We had a pretty tough experience with a home in 2008,” Rock said. “A home we had been in for only two years.”
“With the loss of a job that I had since 1995 and an extended illness for my wife Jacki, we eventually lost that home in 2011. Since then, we’ve rented. We didn’t want to try and purchase a home again and we weren’t even sure if we’d qualify.”
That all changed in 2019.
“I contacted our friend and realtor who quickly put us in contact with Dave and the team,” Rock said. “In just a matter of a day or two we found out we were good to go and we immediately began the process of getting pre-approved and looking for a home.”
Rock and Jacki worked with Licia Ackerberg. Things moved fast and efficiently.
“We have known Licia for years and she quickly got us on the right track,” Jacki said. “We found our new home the first weekend we looked.”
According to the couple, Dave and his team at Michigan Mortgage exceeded all expectations. They explained the process clearly and handled their unique situation with great expertise.
“Our experience with Dave and the team was fantastic,” they said. “Just the right mix of encouragement and letting us know what documents and other information was needed from us. They kept us informed every step of the way.”
“We never felt pressured and felt like their goal was to help us get what we wanted,” Rock said. “We were told ahead of time what to expect and so there were no surprises.”
The couple moved into their new home the weekend before Christmas with the help of their grown children. They celebrated Christmas together that same weekend.
“All around, this has been a great experience,” Rock and Jacki said.
We wish them a happy and healthy 2020 in their new home!
https://www.michmortgage.com/wp-content/uploads/2020/01/Rock-Jacki.png481720Courtney Coonhttp://www.michmortgage.com/wp-content/uploads/2017/12/MM-for-white-background-300x105.pngCourtney Coon2020-01-10 14:05:042020-01-10 14:10:52Success Story: Rock and Jacki Stoltzfus