Michigan Rural Development Loans: Why it works

I understand the skepticism of the Realtors I talk to. It seems too good to be true with everything going on. With the masses of lenders that let their imaginations run wild with all of the money they could make on unqualified buyers. So to hear that someone is still helping the very average buyer-the same as they have been for two decades- seems kind of…too good to be true.

But while FHA was running wild with 500 FICO scores and Non-Occupying Co-Borrowers, there was a mortgage insurer that never waivered from their original guidelines. Now that the bottom fell out from under the others and Steve Preston scrambles to wrangle FHA in yet continue to lend…there is the stolid conservationist guidelines that have served median income borrowers for a while now.

Oh, it’s still a United States Government backed program. It’s called the USDA and it is here to stay.

They have never swayed to lower scores, client base, or lower standards. The only thing lower is the rates. They had lower income borrowers’ best interests at heart without compromising their own principles of what makes a good borrower.

Is it any wonder that they are still lending with fervor while FHA is dying and has no idea?

For more information Call Today, or visit our website:
810-953-4266 or www.iconmortgagelending.com

Michigan First Time Home Buyers: Preparing Your Docume

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 your basic documentation! That means they are making promises with no intention of keeping them, a true professional will verify your documents and approved you before making an guaranties.

For More Information- Call Today or Visit Our Website:
810-953-4266 or www.iconmortgagelending.com

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 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 approves you upfront. And do I really have to warn you about using 800 numbers in California or New York to get a loan? FIND HELP AT LEAST FROM THE SAME STATE!

Ok, now you can get excited and look for homes. Get a good Realtor, find what you want, and don’t be afraid to pull the trigger. At the same time, don’t over look the structural integrity of the home, just remember that you will ALWAYS have to paint a room or two to make it yours. Get a home inspection and listen.

Getting your loan will take time. Depending on your situation it can be anywhere from 20-40 days. Anything longer is too much, and you should start to ask serious questions around the 35th day.

Don’t be afraid to ask questions. Simple but rarely used. Just ask any question at any time and if your loan officer or realtor seems to never be available, ditch them. Ditch Them! Don’t feel imposed upon or that you aren’t being taken care of, a lot of sales people are taught to show you how complex everything is to sell you on themselves. Really their job, THEIR RESPONSIBILITY, is to simplify things for you.

Closing will never be simple. Hopefully you have a good loan officer that will explain this to you upfront, but be patient and let those doing the work have time to do the work. If it was simple, you could do it yourself.

The final word: work hard to find people you can have complete face to face confidence in and have confidence in them. This is the most important part of anything you do. Assemble a good team of professionals that can put everything into perspective for you and will have YOUR best interests at heart.

For more information Call Today or visit our website:
810-953-4266 or www.iconmortgagelending.com

Michigan Mortgage: BORROWERS BILL OF RIGHTS

“BORROWERS BILL OF RIGHTS”

 

1. You have the RIGHT to shop for the best loan for you and compare the charges of different mortgage brokers and lenders.

2. You have the RIGHT to be informed about the total cost of your loan including the interest rate, points, and other fees.

3. You have the RIGHT to obtain a “Good Faith Estimate” of all loan and settlement charges before you agree to the loan or pay any fees.

4. You have the RIGHT to know what fees are nonrefundable if you decide to withdraw your loan application.

5. You have the RIGHT to ask your mortgage broker to explain exactly what the mortgage broker will do for you.

6. You have the RIGHT to know how much the mortgage broker is getting paid by you and the lender for your loan.

7. You have the RIGHT to ask questions about charges and loan terms that you do not understand.

8. You have the RIGHT to a credit decision that is not based on your race, color, religion, national origin, sex, marital status, age, or whether any income is derived from public assistance.

9. You have the RIGHT to know the reason if your loan application is turned down.

10. You have the RIGHT to receive the HUD settlement costs booklet “Buying Your Home”.”

Michigan Realtors: Why explore Rural Development loans?

You’ve probably met me face to face and don’t even realize it. If not, you’ve certainly seen my cards pass through your office in the last six years. I’m the guy that was in your office with a smile, a free pen, and a Rural Development (RD) loan flyer. I’m here again to tell you why you need to find yourself a great RD loan officer to refer client to.

 

RD eliminates the most common deal killer. “Cash to close” kills more deals than anything, I am certain of that. Whether it kills deals in process or stops potential buyers from proceeding, the money a buyer has to bring to the closing table is the biggest obstacle in Michigan. RD eliminates this by allowing your borrowers to finance closing costs even above normal LTV guidelines. We don’t need concessions to achieve stress-free financing for buyers.

RD has no down payment requirements. RD sees other ways to protect their own investment, but for most Michigan borrowers these requirements are not an issue. The last 100% financing available is Rural Development.

RD is set up for a first time home buyer. First time buyers ARE our market right now. They control our business, or at least mine. RD truly is for first timers. RD understands limited credit history- something FHA and Conforming just don’t seem to get. Fannie loves someone overextended to the max that has never really paid a bill. TONS of credit elicits approvals with other financing. Why do we have a crisis again? Oh, yeah

RD would rather see someone that isn’t in a position of failure. Buyers that can’t seem to qualify elsewhere because of this, but want to own a home…they will fit with RD

RD is available in far more areas than you realize. I know it seems weird but look at Fenton. Fenton is a huge town with far more “metropolitan” area than Flint, yet everything in the 48430 qualifies. Go Fig!

RD has the absolute best interest rates.  I’ve had Realtors tell my buyers that I could not deliver on the rate I quoted; only to have the buyer laugh all the way to the bank. I’ve had to show Realtors how I could deliver and end up with undying allegiance.

This is about the buyers, thought. FHA, Fannie, Freddie, MSHDA are like jokes next to RD. Granted, RD only finances certain geographical areas, but they dominate the areas they finance.

The final word. Try it once and you won’t go back. Non-believers become believers. Find yourself a good RD loan officer and try them out. Your clients deserve to know what a great deal they can get, and MORE IMPORTANTLY those buyers that got turned down by Dort Federal, Citizens, and Mclair deserve to have a chance at financing that doesn’t rely on their archaic guidelines

For more information: Call Today or visit our website:

810-953-4266 or www.iconmortgagelending.com

Michigan Real Estate Purchase: Choosing a Loan Officer

Proceed with Caution: The weirdest part of talking to people about their loan experiences is that people usually are more particular about their Realtor than their Loan Officer. In reality, your Loan Officer is responsible for ten times more than your Realtor, especially in a foreclosure transaction.

 

They will be digging through every aspect of your life; they are exposed to some of your most sensitive information. They are responsible for organizing the entire transaction from open until close. Most importantly, this is the person that represents you, and your application to the powers that be, so you need to believe in them to portray your strengths and represent you well.

 

This is also a good time to realize that cheaper rarely means better. A good bit of advice I would give anyone…choose wisely, make sure your Loan Officer is making as much as your Realtor, and demand excellence.

 

Interview with a Vampire.  No, it’s not that bad. Actually the vast majority of bad loan officers and bad lenders are out of business or are being sued, but you need to do a thorough interview with anyone you may hire to represent you. Always ask the following questions.

 

How long have you been in business?

How many loans do you close each month?

Have you done a foreclosure purchase before? How many?

What type of loan is your specialty? This should be one or two, not many.

Where do you get your clients from? Someone that gets referrals from Realtors and other professionals, may be better than someone that just answers the phone at a bank…just and opinion.

How do you get paid? How much will you get paid? Someone that dances around this…whew you’d be hard pressed to convince me to use them for anything.

What do I need to pay at closing time?

If what I need to bring to closing changes, who will be responsible for paying it? Why?

When will you lock my rate, how often will you update me? *This is important because a foreclosure purchase will usually take close to or more than 30 days to close and fund. It is generally impractical to lock a rate for more than 30 days, and any good loan officer will update you when rates change and give you the option to chose when to lock while advising you based on market trends.

Are you available to me outside of banking hours? Most of you are working people, and the banking system is setup during to function 9-5. It is important to have contact info and know that your loan officer is available to answer your questions at any time, otherwise you will end up a very frustrated individual. It is best to test this theory right out of the gate by calling after hours and expect your loan officer to either answer the phone or call you back within an hour or two.

 

The final word is to keep a positive attitude, recognize that most likely the effort is worth the reward, demand excellence from those you pay and pay those you demand excellence from.

 

For more information, go to our website or call us today:

www.iconmortgagelending.com or 810-953-4266

Michigan Real Estate Purchase: Escrow Account

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 account with enough money to make not only the next upcoming payment, but enough to make sure you never get behind on future payments. The amount collected will change slightly depending on the time of year you close, but in general you should plan on 3 months of your monthly Home Owner’s insurance payments and 8 months of your monthly Property Tax payments to be collected at closing.

 

These reserves, while painful at closing, will end up making you very happy in the long run though. When your taxes go up- as they inevitably do- this will cushion the blow to your monthly payment and make the hike a more steady increase and easier to deal with.

 

For more information, go to our website:

www.iconmortgagelending.com or call us at 810-953-4266

Michigan Real Estate Purchase: Pro-Rated Taxes.

Pro-Rated Taxes: Oh, the agony! Nothing causes headaches the way pro-rated taxes do. What exactly are they? It’s your tax bill…and yes…it is YOUR tax bill. In most places in Michigan you get two bills for Property Taxes. One for winter and one for summer. In the vast majority of places, you pay these taxes in advance meaning you are paying in July for the tax bill between July of that year and July of next year; same for the winter bill Dec.-Dec. If you buy a house, let’s say in August, the seller has already paid for the taxes through July of next year. Even though they have paid through July, they will only own the home for one month covered under that bill and you will own it for the remainder of time covered by that bill. You will be required to reimburse them for the time that you will own the home- August through July for the summer bill and August through December for the winter bill.

 

How to calculate what you will have to pay. It’s no secret; you can calculate this yourself to check it. Take your closing date. Count the number of days from that day until December 1^st. call this (a). Count the number of days from the closing day until July 1^st. call this (b).

Now take your winter tax bill and divide by 365, take your summer tax bill and divide by 365. Then you have the daily amount of each tax bill. Multiply the days you have by the daily amount and you can come up with the two amounts. Add them together and this is the amount of pro-rated taxes you will have to pay.

 

EXAMPLE: You close January 15th. So you have 320 days until Dec. 1 and 166 days until July 1^st.

The tax bills are winter: $565 divided by 365=$1.55 and summer: $1786 divided by 365=$4.89

320 days (a) x $1.55 = $496 and 166 days (b) x $4.89 = $811.74

$496+$811.74 = $1307.74 is your pro-rated tax bill.

 

Seems simple, why all the headaches? Well, with all of the foreclosure properties being bought now, there is rarely upfront truth about what the Property Taxes for your purchase are. Most times the MLS listing will reflect what the Property Taxes were before the bank took possession. When a bank owns a property they are unable to claim a Homestead Exemption like you and I. Think of the homestead exemption as a discount on taxes for you Primary Residence. The bank is not a resident, so they pay more. This also means that when you buy it from them, you pay more. Ask your Realtor upfront what the non-homestead tax amount is. This will help eliminate the possibility of a BIG surprise come closing time.

 

If you are still uneasy about whether the tax information provided is accurate or not, call the county tax assessor about the true tax amount you will be paying at closing time. Google: “county name” tax assessor to find the correct phone number.

 

For more information, visit our website:

www.iconmortgagelending.com or call us at 810-953-4266