Educational Information Archives Page 9 of 11

Reasons to Sell this Summer

June 27, 2019/0 Comments/in Blog/by Courtney Coon

It’s (officially) summer in Michigan! The sun is shining and temperatures are rising.

For most of us, our air conditioners are running for the first time in months and we’re gearing up for an exciting 4th of July holiday at our favorite lake hangout.

Selling your home may be the furthest thing from your mind; if you’ve thought about downsizing or moving into a bigger home to fit your growing family, now may be the time.

Interest rates are low, home values are high and houses are moving quick in West Michigan.

Here are four reasons why you should consider selling this summer.

There’s very little competition. If you were to ask any Realtor in the area, they’d tell you the same thing. There are not enough homes for sale to meet buyer demands. According to experts, housing inventory is under the 6-month supply that is needed for a “normal” market.
Buyer demand is high. Buyers are on the hunt for their dream home! At Michigan Mortgage, we have a number of pre-approved buyers that have yet to write an offer. According to the National Association of Realtors (NAR), properties were on the market for an average of 26 days in May and 53 percent of homes sold in May were on the market for less than a month.In West Michigan, homes are going under contract before Open Houses are able to be scheduled. Yard signs are changed to “Sold!” in the matter of days.
The home you hope to buy will continue to appreciate. According to NAR, “The median existing-home price for all housing types in May was $277,700, up 4.8 percent from May 2018 ($265,100). May’s price increase marks the 87th straight month of year-over-year gains.” If you’re looking to move up and into a bigger home, you will need to spend more in 2020.Lawrence Yun, NAR’s chief economist said this: “Though inventory is up, the month’s supply numbers remain near historic lows, which has a direct effect on price. Solid demand along with inadequate inventory of affordable homes have pushed the medium home price to a new record high.”
Interest rates are low. Over the past few months, mortgage interest rates have been on a steady decline. This isn’t expected to change. Not only has this trend transformed renters into buyers, it has benefitted sellers when they purchase their forever home.

Summer is here and it’s time for you – and your family – to start living the life you’ve always dreamed of!

Image of a couple searching for homes online.

Five Reasons You Should Consider Refinancing

May 29, 2019/0 Comments/in Blog/by mimortgage

There are many great reasons to refinance an existing mortgage. Mortgage interest has historically been treated differently than all other debt. In fact, mortgage debt is the only debt eligible for a reduction in federal income taxes.

Done correctly, refinancing can be a good financial move (always consult a financial adviser first, of course). Once you’ve decided to refi, reach out to a Michigan Mortgage professional to get the process going.

Here are 5 reasons to refinance.

Your credit score has improved since the original mortgage closing. Normally just adding a mortgage account that has been paid on time for a year or more can have a significant positive impact on an individual’s credit score. Mortgage rates are discounted for every 20-point increase in borrowers credit score up to 740. Depending on how much higher a consumer’s credit score has improved, the potential savings could be substantial, especially if combined with reason number two.

Your originally purchased with less than 20 percent down and you are paying Private Mortgage Insurance (PMI). Refinancing can be a great way to remove those extra premiums for their monthly payments. Since 1991, home values have increased an average of 3.3 percent each year, according to the Federal Housing Finance Agency’s (FHFA) House Price Index (HPI). Just in the past year, home prices went up an average of 6 percent across the country.

You want to reduce the terms of the loan. When combined with number one and two on this list, a borrower could actually get a similar payment with a big reduction in years left to pay their mortgage. Going from a 30-year to a 15-year mortgage can result in thousands of dollars of interest savings over the life of the loan.

You want to combine high-interest loans to a lower, tax-deductible payment. Student loans, personal loans and auto loans traditionally are secured with higher interest rates than mortgage loans. Refinancing and paying off higher-interest loans can be a great way to simplify the number of payments made each month and reduce overall monthly payments.

You want a low-cost source of cash for home improvements or investments. Home improvements can improve the value of the home and many investments that pay higher than the after-tax cost of can provide a source of income over the cost of a mortgage.

A consumer’s best move to always to sit down with a Michigan Mortgage professional to determine the best course of action and match their mortgage to the consumer’s goals. If you would like to start, just 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.

Mistakes to Avoid When Shopping for a New Home

May 2, 2019/0 Comments/in Blog/by Jill Garrison

Shopping for a new home can be one of the greatest experiences of a lifetime! When you venture out to purchase a home, make sure you set yourself up for success and an amazing experience.

Avoid these common mistakes:

Not having your financing in order when you are ready to make an offer. It is critical to have a pre-approval from a trusted lender. Especially in a low inventory, competitive market, the buyer who has financing in place is ready to write the offer and “win” the home. So, don’t put yourself in the position of falling in love with a home that you aren’t able to bid on quickly!
Not taking the time to educate yourself by window shopping and researching the market. Noel Berg with At Home Realty says, “A critical step in home buying is going to Open Houses, driving through neighborhoods and having a Realtor who educates you on home values so that you feel comfortable and confident when you find THE home! The more properties you can visit, the more confident you feel making an offer!”
Submitting a low-ball offer. Make sure you look at all of the variables before making a low-ball offer. How long has the home been on the market? If it’s a seller’s market, it’s probably off the table. Does the house need updates, making it over priced? Your Realtor can craft an offer that won’t be too aggressive or offensive in the current market.
Including too many contingencies. Contingencies are basically “walk away” clauses. It is important to protect your own interests, but, typically, the more contingencies in your offer, the less enthusiastic the seller may be to deal with you, especially in a seller’s market. Your Realtor will guide you as to which contingencies are the most critical to protect your interests.
Using the seller’s agent. A real estate agent’s loyalties and responsibilities change depending on the transaction. A seller’s agent works for the seller to get the highest amount of money in the shortest period of time. Their fiduciary responsibility is to the seller at all times. The buyer’s agent works with the buyer to teach their clients about the market, to show them houses, and advise them when it comes time to make an offer and negotiate with the seller.
Blindly listening to friends and family members. Though your friends and family have your best interests at heart, unless they are a Realtor, they are simply not experts; often times offering inaccurate and incorrect advice.
Buying a home that is too expensive. Many buyers get their pre-approval letter and set out to look at houses at the top of the price range without thinking it through. It is important to work through a budget, and evaluate your spending habits and the increased cost of owning a home.
Letting your emotions guide you. Purchasing a home will likely be one of the biggest and most important purchases in your lifetime. So, it makes sense that there will be emotions, concerns and questions weighing on you during the process. Make sure you take the top seven guidelines seriously so that you are empowered by logic, market awareness and professional advice!

A professional lender and Realtor will guide you home with confidence and authority.

Image showing a family in their new home.

Own a Home with Only 3 Percent Down

April 25, 2019/0 Comments/in Blog/by mimortgage

Can you really own a home with 3 percent down?

Yes, yes you can!

The 3 percent down payment option is similar to existing conventional loan programs with much higher requirements. This program, however, can better serve first-time homebuyers because of the following.

The mortgage provides the security of a fixed-rate loan.
The property can be a one-unit single family home or condo.
At least one borrower has not owned a home in the last 3 years.
The property will be the new owner’s primary residence.
The loan amount is below $453,101.

According to the National Association of Realtors, the average home price is around $250,000. The 3 percent down conventional loan is a great way to expand homebuyers purchasing power.

According to Fannie Mae’s Loan Level Price Adjustment (LLPA) graph, borrowers can have a score as low as 620 to qualify.

Interest rates can be appealing as well.

These loans include rates only about one-eighth to one-quarter of one percent higher than rates available to borrowers putting 5-10 percent down.

Is it worth it to try and save more? The time it takes to save an extra 2 percent for a larger down payment could mean higher home prices and tougher qualifying conditions in the long run.

Are you ready to find out your options? Contact one of our Loan Officers to learn more.

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.

Finding it hard to save for a down payment?

April 18, 2019/0 Comments/in Blog/by Rob Garrison

Making small changes to your habits can make a big difference in your ability to save. Saving takes some pre-planning and discipline and a well-executed strategy.

Here are a few ideas to help you save.

Take it right out of your paycheck and transfer a fixed amount into a special savings account. This is probably the most convenient and practical way to save. Take it right out of your paycheck. Make sure you set up an automatic direct deposit into a savings account that is earmarked for your down payment only. Commit to using this money for a down payment and no other purpose.
Take advantage of special programs including down payment assistance programs. Check with your lender to see what type of down payment assistance programs they offer. See if you qualify with the FHA, the U.S. Department of Agriculture Rural Housing Service and the Veterans Administration. Also, check out local housing authorities, such as MSHDA. If the lender doesn’t offer these programs find a knowledgeable, reputable local lender that specializes in these programs.
Skip vacations for a year. Make if a fun goal to forego any large vacations. Plan a staycation, or a night somewhere, and focus on how great it feels to get closer to your goal.
Lower your expenses. Look at your budget to see what small things you can cut per month. Cut out a coffee per week, make your own pizza on Friday night. If you don’t have a budget, sit down and make one and evaluate it quarterly to see how you are doing. Shop at Costco, Aldi and other discount stores.
Sell your stuff on EBAY or Craigslist. If you have Designer clothes, furniture, antiques, art, gaming devices that you barely use, consider selling them and putting the proceeds in your down payment account.
Start a Side Hustle. Commit to a temporary period of time and put all of the money in your down payment account.
Ask for a raise. If you’ve been thinking about a raise, and feel you deserve one, now may the time to talk to your superior about the value you bring to your organization.
Use gift money. Parents or relatives may be able to gift money to help out a first-time home buyer. Gifts can come from your family, spouse or a domestic partner. Be sure to include the amount of the gift on your loan application and check with your lender as the best way to obtain and track this. To be recognized as a “gift” the donor will have to sign a gift letter saying there’s no expectation of repayment, interest, or anything else.
Be wise with your money. Think about your purchases before you make them. Are there cheaper brands at the grocery store that are the same quality as the premium brand? Are there restaurants that offer the same quality and experience that are a little less expensive? Do you need another tan sweater? Be mindful about your purchases and avoid impulse purchases.
Use your tax refund. Set aside a percent of your tax refund to deposit into your down payment savings account.

For more ways to save for a down payment, reach out to our team at Michigan Mortgage. We’re here to help in any way we can.

Home Maintenance Checklist: Leave Buyers with a Great Impression

April 3, 2019/0 Comments/in Blog/by Jill Garrison

First impressions matter!

According to the National Association of Realtors, the average home buyer will look at 10 homes before making an offer. When a potential homebuyer walks in to your home, how will your home make a positive and lasting impression?

Most buyers are looking for a move-in ready home that appears to be well maintained, with ample storage, and it’s the little things they notice when assessing the over-all condition.

Make sure you inspect your home through the eyes of these potential buyers, then fix the most obvious items. Take inventory of all repairs and get to work.

Make sure all door hardware is in working order and replace if necessary.
Do all windows open easily and have a secure window lock?
Reglaze bathtubs if needed. This is a very easy, inexpensive but important fix.
Make sure caulking is clean and applied well in bathrooms and kitchen.
Repair any cracks in ceilings and walls.
Fill in any holes left by picture hangers and wall art.
Touch up painting in all rooms.
Replace shower head with a new, clean one.
Repair any leaking faucets or supply valves.
Make sure all outlets and light switches are working.
Replace old, dirty and paint covered electrical covers with new ones.
Put the correct bulbs in light fixtures and make sure there are no bulbs burned out.
Buyers are looking for neutral colors, so if there are boldly colored rooms, repainting in neutral tones will be helpful.

Cleaning and Decluttering

Remove clutter. Picture frames, accessories, files, books, small appliances should be removed from counters.
Scrub all surfaces.
Make sure your home is free of all smells including animals, food, cigarette smoke, etc.
Clean all baseboards.
Clean all light fixtures and ceiling fans.
Clean windows and sills inside and out.
Clean all closets and keep them tidy and clean.
Have carpets professionally cleaned and/or replaced if necessary.
Hardwood floors should be mopped and oiled.
Dust blinds.
Replace old, moldy shower curtains.
Remove grease and grime from kitchen cabinets and appliances.
Make sure cupboards and drawers are wiped out and clutter free.
Make sure garage can house cars not boxes and junk.

Enlisting a reputable Realtor will insure that your home is in tip top shape to sell. Your local Realtor knows what homebuyers in your area are looking for!

Can you get a mortgage with no credit?

March 21, 2019/0 Comments/in Blog/by Rob Garrison

Sometimes young clients who have not established credit are interested in getting home financing. Other times, clients who have never taken out any credit and pay cash for everything decide it is time to buy but don’t have enough cash.

How did those folks get into a home loan?

With most sub-prime loans going by the wayside, options for these people are limited but not completely closed.

FHA has a no credit loan when a borrower has no credit score but can prove a 12-month pay history on three lines of non-traditional credit.

For example, if someone has utility bills, car insurance, rent, or even something like Netflix, they may be able to get financing. We simply have to get the pay history from the creditor to show they have been on time for 12 months. Note that if they have any derogatory credit like collections, they can negate this option.

Oftentimes, clients with no score also have no non-tradition credit they can add. These clients will need to establish a score. This is not as difficult as it sounds.

If they cannot get a traditional credit card, they may be able to get a secured credit card. Most banks and credit unions will give a credit card that is secured by cash. There may be a minimum amount required, but usually $300 deposited with the bank can secure a card. The consumer then uses that card just like any other credit card to establish credit. This will take about six months and will be good credit for them as long as the balance is under 30 percent of the high credit limit when credit is pulled.

Pitfalls: Many people think that paying off derogatory credit (like collections) or closing out accounts with late payments is s good thing. While this may be the right thing to do, it may not help their score. Having new activity on a derogatory account can often LOWER the score!

Every situation is unique. That is why a consultation with a knowledgeable advisor is the best course of action. Call us for more details on how to establish credit and what is not advisable given your situation.

HELOC vs. Cash-Out Refinance

February 21, 2019/0 Comments/in Blog/by Rob Garrison

The mortgage industry has one flaw: There is no built-in way to access equity.

For many home owners who want to use their equity to pay off debt, start a business, invest in the market, or just use the money for purchases, they cannot unless they take out another loan. The two most popular ways to do this is with a home equity line of credit (HELOC) or a cash-out refinance.

A HELOC is a second mortgage secured by your home. A cash-out refinance is a first lien mortgage that “cashes out” some of your equity in your home. Which is better depends on your situation, the market and your goals.

Here are a few factors that might help make the decision easier for you and your family.

1. Take a look at your current interest rate. If your mortgage interest rate is low compared to the current market and you are borrowing a low amount compared to what is owed on your first mortgage, a HELOC maybe you best option. Why? Although the equity line is higher interest, it is only on a relatively low amount and you can keep your low rate on your first mortgage.

If current rates are lower than your first mortgage or if you are borrowing an amount approaching 50 percent of the current amount owed on the mortgage, it may be better to do a cash-out refinance. This is because the equity line interest is generally higher than the current market rate could make your payment higher. Additionally, because the equity line is generally adjustable, there is a risk that volatility will make your payment unpalatable.

2. Analyze payment vs. interest savings vs. risk. If your ultimate goal is to keep your payment as low as possible, an equity line might be a good choice. Remember, the equity lines are usually interest only and therefore the monthly payment stays relatively low. However, there is a risk in them because they are also adjustable.

If you’re goal is to pay your mortgage off as quickly as possible and pay the least amount of interest, a cash-out refinance is often times better. Again, this is because you pay both principal and interest on cash-out refinances and they are fixed rates.

3. Pay attention to costs. If the up-front costs are a determining factor, the equity line is the way to go. HELOCs are generally free, whereas, a cash-out refinance will add principal to your current mortgage.

4. Keeping it all in one loan. Many people do not like the idea of having two different loans. Even if the equity line is with your first mortgage servicer, there will be two different loans with two different payments and two different statements. These will also have different terms and most likely different rates. On a cash-out refinance there will all be one loan, one term and one rate.

When determining whether to do an equity line or the cash-out refinance it is important to determine long term goals, what your current needs are, and which option will put you in a better position in the long run.

Talk to a trusted advisor to help you navigate your best options.

Is there a “perfect” time to buy a home?

February 7, 2019/0 Comments/in Blog/by Jill Garrison

No matter what is happening with home prices and mortgage interest rates, the right time to buy a house is when you are ready to take on the financial and emotional responsibilities of homeownership.

It’s easy to fall in love with a house, but committing to one for the long term can be more challenging.

“Buying a home is a serious investment,” said Loan Officer Rob Garrison. “Before you start shopping home listings, it is important to sit back, do your homework and analyze your personal and financial goals as well as your lifestyle before you take the plunge.”

“Don’t buy just because everyone else is, make sure you are ready.”

Start by answering these questions.

1. Why do you want to buy?
An important first step is to evaluate your reasoning behind wanting to buy. What do you hope to gain from purchasing a home? How does that fit into your short and long term goals? Consider how long you plan on spending time in one place, as it can tie you to that place. It is
important to take your career into consideration as well as the possibility of an expanding family.

2. Do you know what you can afford and still continue to live the lifestyle you are accustomed to?
You will likely need to take out a mortgage. It is important to begin by checking your credit score from three different reporting bureaus to assess whether you are able to obtain a mortgage. Then, there is the question of your down payment. There are zero down government options as well as 3-20 percent options, depending on your situation. Looking at your cash savings is an important first step.

3. Will you be staying there for five years or more?
When you purchase a home, the general rule is that you want to be sure you will be in the same location for at least five years. Otherwise, you are likely to take a hit financially. Of course this depends on the area you live in.

4. Do you have 3-6 months of emergency savings?
A good rule of thumb is that you have 3-6 months of living expenses in an emergency fund for unforeseen events. Home ownership also requires maintenance and repairs, so a slush fund is recommended to pay for repairs as they crop up.

If after careful evaluation you aren’t ready to purchase a home, there are great short term options to fit your needs. If you are looking for guidance to get yourself ready to purchase, enlisting a trusted, knowledgeable mortgage advisor is a great first step to realizing your dream,
whenever that might be!

Image of a family and their Realtor during an open house.

Should I Hire a Real Estate Agent to Sell My Home?

January 24, 2019/15 Comments/in Blog/by Jill Garrison

There’s a reason nearly 90 percent of sellers use a listing agent: selling a home takes time, knowledge of neighborhood trends, and negotiating skills. So, while eliminating the agent’s commission – 6 percent of the sale price, on average – sounds tempting, try to resist.

According to the National Association of Realtors, 82 percent of real estate sales are the result of agent contacts from previous clients, referrals, friends, family and personal contacts.

The Realtors priority is to help set the right price and then get buyers in the door. Agents have access to the most up-to-date information regarding recent sales of comparable homes and competing homes in your neighborhood. You may know that a home down the street was on the market for $350,000, but an agent will know if that home had upgrades and sold at $285,000 after 65 days on the market and after it fell out of escrow three times.

With a market that can shift weekly, if not daily, it is critical to keep abreast of those changes as they impact your home’s marketability and sale price. Realtors know the market conditions data, such as the average square foot cost of similar homes, median and average sales prices, average days on the market, and ratios of list-to-sold prices, among other criteria, will have a bearing on your home.

Contrary to popular belief, Realtors do much more than put an attractive “For Sale” sign in your front yard. Perhaps the most important exposure is through the MLS because it fans out to so many other sites and reaches most people directly and indirectly through its data feed.
Additionally, the agent will help stage and prepare your home for sale, providing professional quality photos and often videos of your home. Great Realtors promote your property through multiple social media channels such as Facebook, Instagram, Twitter, etc. They will promote open houses, have Realtor walk throughs, and most importantly, vet potential buyers so you only deal with serious prospects.

Once you have found a buyer, the agent will make sure buyers are preapproved and negotiate on your behalf. Your agent will help you evaluate very buyer’s proposal without compromising your marketing position. The initial purchase agreement is only the beginning of a process of appraisals, inspectors, title, financing – a lot of possible pitfalls. Your agent will help you write a legally binding, win-win agreement that will be more likely to make it through to closing.

Before skipping a full service Realtor, think hard about the time and effort you want to spend, particularly if the process drags on. The average home takes about 4 months to sell (six in the slowest cities), according to NAR. If costs are a concern, have a frank conversation with your Realtor about what they expect to be paid.

Considering the relatively small cost of hiring a Realtor and the large potential risk of not haring one, it’s smart to find a professional to sell your home.

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