Michigan mortgage rates & information

Reducing your mortgage payment

2008-04-01T08:35:00.000-07:00

How to Reduce Your Michigan Mortgage
One Additional Mortgage Payment a Year

There's a simple trick to significantly reduce the length of your mortgage and save you thousands of dollars. The trick is to make one extra mortgage payment a year and apply that payment toward your loan's principal.

This is the method being used by "Bi-Weekly Mortgage Reduction Services or mortgage saving programs". What they are doing is taking your 1/2 your mortgage payment every two weeks holding on to it until you send the other half and then sending it in. You are doing that 26 times a year. So it adds up to one extra mortgage payment a year. For that they charge you a set up fee of $75 - $500. And about $3-7 dollars each time you send money in. It costs you a approx $182 a year to do it. Over the length of the loan it cost you $4500 to do it. If you are disciplined you can do it yourself and save the $4500. Only, when you do it yourself, you don't pay a third party unnecessary set-up costs and fees! If you pay an extra payment at the beginning of the year it is better because it is that much less that interest is accruing on. So you are paying off your Michigan home quicker.

Example: $100,000 loan, 30-year mortgage, 6.5% fixed interest rate
Extra Mtg Pymts/ Year-Principal & Int-Additional Monthly Pmt-SAVINGS-Total Pd-# of yrs
0-$632.07-0-0-$227,542.98-29.92 / 359 mos.
1-$632.07-$52.68-$29,088.02-$198,454.96-24.12 / 290 mos.
2-$632.07-$105.35-$28,399.71-$181,050.85-20.5 / 246 mos.
3-$632.07-$158.02-$58,320.95-$169,222.03-17.92 / 215 mos.
4-$632.07-$210.69-$66,969.79-$160,573.19-15.92 / 191 mos.
5-$632.07-$263.36-$73,607.77-$153,935.21-14.34 / 172 mos.

Look at the savings and the final row. That is how many months you can cut your mortgage down to. Tremendous mortgage savings. What a do it yourself mortgage reduction plan!

One-time Payment
It may not be possible for you to increase your monthly mortgage payment. Keep in mind that most mortgages will permit you to make additional payments to your mortgage principal at anytime. Perhaps, five-years after moving into your home you receive a larger than expected tax return, or an inheritance or a non-taxable cash gift. You could apply this money toward your loan's principal, resulting in significant savings and a shorter loan period. Some banks will allow you to re-amortize your loan. Ask your mortgage person or lender for their rules. Where this comes in to play many times is when a seller still has his old home. When they finally sell the home then they have a large amount of cash to put on the mortgage. They don't want to refinance and be charged closing costs. Ask your bank about re-amortizing your loan.

Example:
With a $100,000, 30-year, 6.5% fixed interest rate mortgage loan, the borrower will pay a total of $227,542.98 to pay back the loan in 30 years. That equals $127,542.98 in interest payments.
If the same borrower makes a one-time $5,000 payment the first day of year 6, he/she will pay a total of $204,710.75 and pay off the loan in 27 years (324 months). That's a savings of $22,832.23 in interest. That is a huge savings for your Michigan home and you.

So the bottom line is: You don't have to pay some company to make an extra payment a year for you. You can do it. Divide your payment by 12. Add that amount to your monthly payment and pay that amount from now one. You will cut years off your mortgage and it did not cost you a dime! For more on Michigan Mortgages go to my website www.RussRavary.com

Improving your credit score

2008-03-23T18:40:00.000-07:00

You can take steps to improve your credit score. There are many variables that come into play with credit scores. Here are some good guidelines.

To get a great score is pay your bills on time, keep account balances low, and take out new credit only when you need it. People who do that faithfully have very high scores. It usually means that you use credit wisely and you are not buried in debt. Start by pulling your credit report to check your credit score to see where you are. What you're looking for on your report are factors that could be affecting your score. Look for errors in the report, such as accounts that aren't yours, late payments that were actually paid on time, debts you paid off that are shown as outstanding, or old debts that shouldn't be reported any longer (negatives are supposed to be deleted after seven years, with the exception of bankruptcies, which can stay for as long as 10 years).

Call or write each credit scoring company with the errors. Sometimes it can take up to four weeks for errors to be corrected. Be sure to have paperwork proving you paid the debt or a letter from the creditor as proof.

After repairing errors, the fastest way to a better score is paying down balances on credit cards. It is possible to increase your score 20 points by paying down your credit lines," because the credit bureaus look at how much debt you owe as compared to how much the available credit is.

If you have had a few late payments in your past get auto deduct from your checking account or savings account. If you find yourself in some financial difficulties, you can protect your score by making sure your payments don't go 29 days past due. Even if you've paid your bills late in the past, you can improve your credit score by paying every bill on time from now on. Though it will take time for the history to show up.

One thing you shouldn't do if you're just trying to boost your score is close unused accounts. It won't help you and it can hurt you. Closing unused accounts without paying down your debt changes a ratio that the credit bureaus look at. The credit bureaus look at the amount of your total debt divided by your total available credit.

When you appear closer to maxing out your accounts your score can drop. Credit scores can sometimes reflect when people are using credit cards and equity lines to stay alive financially.

The length of your credit history is another factor in your score. If you close the account of the credit card you got when you were a freshman in college and leave open the ones you just got within the last couple years, it makes you look like a much newer borrower. Keep a couple of the oldest open. Don't worry about the interest rate is, just don't use that card. Creditors don't care what the rate is., they care about the history and the length the card has been open. Creditors and mortgage companies also like to see three credit lines open for 1 to 2 years. The higher the credit limit the better they like it.

Working with credit card balances is another strategy for bringing up your score: Transfer balances from a card that's close to being maxed out to other cards to even out your usage. Or just spread out your charges between a few cards. Try to get the usage on all of them at 20 to 30 percent instead of a bunch at zero and one at 85 percent. Remember the credit reporting companies drop your score when you get close to maxing out your limit on credit cards. It is better to have 2 or 3 at 33% than one at 90%.

Rapid rescoring If you're in the middle of qualifying for a mortgage and need a score boost in a hurry, you can speed the process along with rapid rescoring. If you've got legitimate negative information on your credit report, such as late payments or accounts in collections, you're out of luck. But the process of rapid rescoring can help increase your score within a few days by correcting errors or paying off account balances.

You can't do this one yourself; you'll need a lender who is a customer of a rapid rescoring service. Generally, the service will run roughly $50 for every account on your credit report that needs to be addressed, but it could save you thousands on your loan. If a consumer can find a lender who is a customer of a rapid rescoring service, new information can be posted within 72 hours.
The bottom line, the experts say, is that you're not powerless when it comes to your credit score.
There are a lot of things you can do to improve your score. For more help email me at info@RussRavary.com or go to my website www.RussRavary.com

Seller paid closing costs

2008-03-21T16:34:00.000-07:00

Do you have a little bit of money to put down on the Michigan real estate that you want. Let's say you have 3 -5 % to put down but you do not have enough money to pay for mortgage closing costs or to pay the prorated taxes on the Michigan Home. How do you buy the house?

Depending on the mortgage lender that you go with mortgage closing costs are from $1200 - $2500. That is not even counting setting up an escrow account or paying back the prorated taxes on your new Michigan home. So what can you do when you found the home of your dreams? Your mortgage lender and your real estate agent need to talk. You need the seller to pay for your closing costs. Some lenders allow a home seller to pay 3 to 6% of the closing costs. most lenders allow at least 3% of the mortgage closing costs to be paid by the seller.

By asking for 3 or 4% to cover your mortgage closing costs will save you from borrowing the money from family members and allow you to buy your new Michigan home. This is very common in many Michigan real estate transactions. Sellers are willing to give sellers concessions to get the home sold and have a solid deal.

But remember the seller paid closing costs is money out of the seller's pockets. The seller will then get less money than if he sold the house without seller's concessions. The seller may not be willing to give seller's concessions and a lower price.

So if you have the money for mortgage closing costs and you want a low price on the homes do not ask for seller's concessions.

For more on Michigan Mortgage Rates, Michigan mortgages, Credit information, How to buy a bargain Michigan Home and Michigan Real estate go to www.RussRavary.com

Bear Stearns & the mortgage fallout.

2008-03-17T04:46:00.001-07:00

Boy I was right! I had predicted that there would be bank troubles. I could not imagine that banks can take these kinds of hits. Banks are losing a lot of money when they go to re sell these foreclosed homes. I was in one Detroit foreclosure on Saturday. The bank had not gotten to the home quick enough and the pipes had frozen. There was tremendous water damage.

The bank was owed over $150,000. They had it up for sale for $39,000. There are all sorts of foreclosed homes that the banks are losing 2/3's of its investments. How can banks take those types of hits? THEY CAN'T AS WE FOUND OUT WITH BEAR STEARNS.

Now here is a prediction from me. There will be another one. It is a West Coast Bank that did a lot of exotic mortgages. They were a bigger seller of option arms. They also did sub prime mortgages. I don't see how they can survive.

For more on Michigan mortgages go to my website www.RussRavary.com or if you would like a Michigan foreclosure list of your city email me at Info@RussRavary.com

Is it a great time to buy or not

2008-03-16T07:49:00.000-07:00

My perspective on this is that home prices will continue to fall this year. BUT WHAT WILL INTEREST RATES DO? Remember that if rates rise one percent the cost savings you save on the price of the house may be lost in higher mortgage payments. Nobody knows where the interest rates will go or when the housing market will bottom out.

So what I recommend to anybody that is thinking about buying a home is watch the area you want. Browse the Michigan homes for sale on my website on and off. There may be a home that comes up. It may be your dream home. It might sell before next year.

You may not see any home you like for 6 months to a year, but you may find the exact home you want 4 months from now. The bottom line is getting the home you want. It may not be at the absolute rock bottom price but if rates are good I would consider putting an offer in on the home you want. For more on Michigan Mortgages, Michigan Real Estate, Detroit Real estate or to search over 70,000 Michigan Homes for sale feel free to go to my website www.RussRavary.com If you want a Michigan Foreclosure list email me at info@RussRavary.com

How mortgage brokers get paid

2008-03-15T10:18:00.000-07:00

I am a mortgage broker. And I am not afraid of telling you how we get paid. Banks and lenders want to sell loans. The more they buy, the more they can sell to bulk mortgage investors. Whether banks sell loans in house or get mortgage brokers to sell them for the bank, the bank pays it's employees or mortgage broker a commission.

I once did a Michigan mortgage for a client. He asked which bank it was going through. I didn't think anything of it. He called me the next day and asked me how I could get a mortgage interest rate cheaper than the bank itself was giving out. He couldn't believe it!

Here is the secret. Banks and lenders sell mortgages to investors. They have to set mortgage interest rates according to what the bulk investors will pay that day for the mortgage. So what the bank and the lender do is send out rate sheets by email and fax to mortgage brokers.

For example a bank or lender may 1% of the loan amount for a 6.0% mortgage. Then they may pay 1.45% for a 6.125% mortgage. They may pay 2.5% for a 6.5% mortgage.

So the mortgage broker decides what he is willing to make on a loan. Some mortgage brokers like me work on volume and are willing to give a lower rate. Where other mortgage brokers may charge a little more. We as mortgage brokers represent 20 -30 banks. We see what they want to charge and we can shop your Michigan loan around.

Remember mortgage brokers and banks are getting a paid a percentage of the loan amount. So usually they like loan amounts over $150,000. Small loan amounts under $80,000 they do not make much money on and can be more trouble than they are worth. Think about it. 1/2% of $60,000 is $300 whereas 1/2% of $200,000 is $1000.

So know you know how banks, lenders, mortgage brokers make their money. That is why different places have different rates and closing costs. Sometimes mortgage brokers pay some of the fees out of their commission. Which is good for you the consumer. You can get a good rate and good closing costs. For more on Michigan mortgages go to my website www.RussRavary.com For Michigan things to do, Holiday trivia, Michigan facts, real estate tips, mortgage information. Or email me at OurMortgageGuy@yahoo.com for Michigan Mortgage rates

Pre-approval letter.

2008-03-14T05:24:00.000-07:00

Pre-approval letters
So you were pre-approved last year for a Michigan Home. That approval letter may not be Worth the paper it is printed on! Banks and Lenders have tightened up lending guidelines. In the last year mortgage lending has completely changed. There is no more 100% loans in Michigan. Even 95% loans are getting tougher. Though the alternative is an FHA loan. With an FHA loan you can get up to 97% of the purchase price and have the seller pay some of the closing costs.

Every week banks and lenders are looking at how to stop their bleeding. How to stop foreclosures. That is why they are tightening up the lending guidelines. Banks do not want to take the risk. Some people that bought homes in the last 5 years can not even refinance because many lenders do not do sub prime loans anymore. They do not have the mortgage programs they had last year, or even 6 months ago. Even a 620 score is not considered very good anymore.

So don't get caught with your pants down. Get your pre-approval today from a qualified lender. If you are thinking of buying a Michigan home give me a call. I will help you get pre-approved, straighten your credit out so you can buy a home of your own. For more on Detroit Real Estate, Michigan Real Estate, Wayne County real Estate, Oakland county real estate go to my website www.RussRavary.com I have lot of great Michigan mortgage information, credit report information, Michigan home buyers tips

Michigan Foreclosures

2008-03-13T05:06:00.000-07:00

Michigan Foreclosures, Northville Foreclosures, Farmington Hills foreclosures - what to remember

When buying a Michigan foreclosure, REO, or any bank owned property around Michigan, Oakland County, Wayne County, or Livingston county you need to remember a few things.
1) When buying a Michigan foreclosure remember to read and re-read the contract and addendums from the bank. Many times the bank has language protecting them. Sometimes they push some of the title closing costs on you. Beware. Anything you do not understand ask your Realtor to explain.
2) When buying a Michigan foreclosure remember that the bank is not going to fix anything. You are buying the home "as is".
3) When buying a Michigan foreclosure you should always have an inspection clause and have a professional inspect the property. Don't let uncle Joe inspect your Michigan foreclosure. You need to be aware of all the possible problems with the home.
4) When buying a Michigan foreclosure remember it takes time to get the deal closed. Most foreclosure departments are only open during the week Monday through Friday. Be patient when bidding on a Michigan foreclosure.
There are many Michigan foreclosures out there. There are many bargains in the Michigan foreclosures. If you would like a list of Michigan foreclosures sent to you email me at info@RussRavary.com or email me at OurMortgageGuy@yahoo.com I will send you a list of Michigan foreclosures in the city you request that you can open and browse through at your leisure.
For more on Michigan foreclosures, Michigan Real estate, and Michigan Mortgage go to my website www.RussRavary.com see my website for Michigan real estate investing (Flipping) or to search over 70,000 Michigan homes for sale free

Michigan mortgage rates

2008-03-11T07:57:00.000-07:00

Michigan mortgage rates are once again on the rise. The reason being is that investors are shying away from buying mortgages and mortgage back securities. Investors are wary of putting money into mortgages.

What that means to mortgage companies and consumers is that rates may continue to rise even though the Fed continues to cut the rates. You can see my article on the difference between the Fed rate and the mortgage interest rate at www.activerain/blogs/russravary It explains a lot why it happens.

The bottom line is that mortgage rates do not always go down when the Fed cuts the rate. Especially right now when big investors are afraid of buying mortgages. No pension fund manager want to take a chance on putting somebodies retirement at risk because of the mortgage fiasco. Not many foreign investors want to take the chance at this time either. What that means is that mortgages are getting harder for the banks and lenders to sell. Rates may continue to rise this year.

For more on Michigan mortgages, Michigan real estate go to my website www.RussRavary.com Search over 70,000 Michigan Homes for sale at your leisure. Email me for a Michigan foreclosure list in your city at info@RussRavary.com

What has happened in the last week

2008-03-07T15:22:00.000-08:00

Detroit mortgage market and Michigan mortgages. A lot has happened in the last week in the mortgage world. That what happens when you go on vacation in Florida and try to keep up by phone and glimpsing at the news.

Most of Southeastern Michigan real estate has been determined a "declining market." What that means to you as a consumer in Michigan is that banks and lenders are going to loan less on your property. Some banks are reducing the amount they will do for home equity loans. They used to loan up to a 100%, now some banks will not even loan 75% of your homes value. One of the ladies at my wifes office was upset with their loan officer and bank because of the "declining market" situation. The bank was making them come up with an extra 5% to buy the home. The ladies husband thought he was going to be able to talk the bank out of it. But they didn't. They had to put more money down. It doesn't matter even if you have the greatest credit you have to put more down.

It is not about the credit. It is about the value of the house. Why would a bank loan 95% on a house and have the chance that it may be only worth 90% next year! You the borrower would owe more than it is worth. The bank doesn't want those types of loans. It wants to protect it's assets. It wants you to have a financial interest in what you buy.

One of my fellow realtors got an email from his mortgage broker quoting that by March 1 most banks are only going to loan 90%. That means buyers will have to come to the table with 10% down or do a FHA Loan. Most buyers don't have 10% to put down, so FHA may be the loan of choice for many people. FHA loans may be the only choice for many people. If you are thinking of buying a Michigan home and want to see your mortgage choices.

Many people will be trapped in their Michigan mortgages and will not be able to refinance because of the lower loan limits. The key for many people now is to work harder at paying off their second mortgage. Reduce that higher payment. Get rid of that high interest payment. Pay extra on your second mortgage.

For more on Michigan mortgages and Michigan real estate go to my website www.RussRavary.com

Your home as a bank

2008-02-23T04:32:00.000-08:00

If you have used your Michigan home or any home as a bank to finance your life style, now may be the time to re-evaluate your finances, your life style. I want you to be able to retire, to help your kids through school, to have no mortgage payment when you retire.

The only way to do these things is to live within your means. To spend less than you make, to save a little, to be a little more frugal. There will always be friends that make more than you, neighbors that are buying something new, or a family member that seems to be doing extremely well. GET OVER IT !!!!

America has become a competitive society. Everybody wants new and more "stuff" But does it improve your quality of life? Now is the time to plan for your future. Step back and think about were you want to be in 10, 15, 20 years. Are you ever going to be able to retire? Or are you going to be a WalMart greeter. Or the older lady showing people to a restaurant seat. Those people are not doing it to keep busy, they are doing it because they have to. They need the money.

I'm in the mortgage business. I make money off of people doing home equity loans to pay off credit cards. Don't do it. Pay those cards down, start living within your means. Your life will be less stressful and less demanding if you quit trying to keep up with the Jones. For more on Michigan mortgages, improving your credit score, or Metro Detroit Real Estate feel free to go to my website www.RussRavary.com Have a great day Russ Ravary

Isn't this the craziest thing?

2008-02-20T14:47:00.000-08:00

Is this the craziest thing?
Banks are doing the dumbest things lately.
For example. I have a borrower who has $30,000 saved up. He wants to use some of it for a down payment. But he can't qualify for the program. You see the guidelines for the program say they will only loan him 95% if only he doesn't have any money. He has to show nothing and that he is going to borrow the money from somebody else. No isn't that dumb? They won't do a home loan for somebody that has saved the money but, will loan it to somebody that hasn't.

Another example is the My community program. They will loan 95% if you are under a certain income. But my borrower makes too much money. He makes over $70,000 a year. The guidelines say he can't fit into that program, believe it not he makes too much money!!! No isn't that dumb, they will put somebody into a loan if they make a little bit of money. They will stretch their finances, but NO DON'T EVER LOAN MONEY TO SOMEBODY THAT MAKES TO MUCH EACH YEAR. Now isn't that dumb.

Another example is my buyer wants to buy a house for $181,250 and put 5% down. We got such a great deal that other comparable homes in the were selling for more. The home was brand new, and appraised for more than the selling price. It appraised for $190,000. 4.6% more than the purchase price. You are going to love this one. The bank has to deduct 5% from the loan amount because Detroit is a declining market. The appraiser did his job right and even though the bank is letting other appraisals slide. (Everybody knows Detroit and other areas around the country are declining markets)

So they will only loan 90% on a person that has money saved, has a down payment, makes good money, has great credit scores, and the house value is greater than the purchase price.
But they will loan 95% to people that make less, have less saved and No money for a down payment. ISN'T THAT DUMB.... Try explaining this whole scenario to the guy that was turned down. I don't understand it, how can the borrower.

And we wonder why there are so many foreclosures around the country. They make it hard for a good credit risk person to get a loan and loan the money out to higher credit risks. You have to love it.

To top it off I sent this to a bank official that denied this loan and wouldn't do it.... He laughed about it. He basically said rules are rules. That's why we survive.

I sent the loan to a different bank first thing this morning and got an approval for the loan. Quicker service, less grief, and nicer. My client is happier with this new bank and their ability to give him the 95%.
For more on Michigan Mortgages, Credit and credit scores, mortgage information and Michigan real estate go to www.RussRavary.com

How are you going to buy a home?

2008-02-18T17:44:00.000-08:00

Banks have tightened up the guidelines to buy a home. That doesn't mean you can't buy a home. I think it is good they have gotten a little tougher with the guidelines. America has been on a shopping spree for too long. Many home owners have used their home to finance their life style and now the bank is closed. They are having to give up the home becuase they can't refinance. They are going into foreclosure.

I feel that your goal when you buy a home is to pay off as much of that mortgage as you can before your retire. To be mortgage free if you can in your retirement years. This mortgage crisis is going to make people live within their means more, they can't borrow against their house.

What is means to you as a new home buyer is that you have to save a little to put a downpayment on a house. Sure you can't buy right away. Sure you can't have instant gratification of your wants. But it is going to teach you to save to acquire the things you want. That is a good thing. Many homes that went into foreclosure were in a state of disrepair. the homeowners couldn't afford to fix things.

If you can't come up with $5,000 to fix the furnace, or $8,000 to get a roof then you really should not be in that house. Those are necessary repairs. By learning to save for a downpayment will help you in the long run.

For more on mortgages, credit and credit scoring, buyers tips go to my website Michigan homes for sale at www.RussRavary.com

Mortgage delinquencies and foreclosures continue to rise

2008-02-15T14:24:00.000-08:00

According to an article on CNN Money Countrywide's Mortgage foreclosures and delinquencies continued to rise in January. Another article said that the median home price in Lansing, Michigan fell 18% to 109,600 in the fourth quarter of last year.

That is what I believe is in store for us all year. I believe home prices will continue to fall, there will be more foreclosures on the Michigan real estate market. I believe the overly optimistic stance by many realtors that the real estate market will start turning around in the last quarter of the year is wrong. It is going to take time to work out of this mess.

The fed may continue to drop the fed rate, but I don't know what affect it will have on the mortgage interest rates. They have dropped it quite a bit already, but as of today's mortgage rates are higher than when the fed dropped thefed rate the first time this year. For more on the difference between the fed rate and mortgage interest rates you can go to my other blog www.activerain.com/blogs/russravary look on the right hand side for "fed rate" or "difference between"

Gambling on whether mortgage interest rates will come down more is like gambling on whether a stock will go up on a certain day. If you can lock in a good mortgage rate lock it in, don't be a glutton waiting for the bottom. It may never come. Some "experts" believe the mortgage interest rates may go up instead of down. Who knows which way they may go, it is anybody's guess. For more on mortgages, Michigan foreclosures, or Michigan homes for sale go to www.RussRavary.com

President Bush's economic stimulus plan

2008-02-13T15:27:00.000-08:00

What does President Bush's economic stimulus plan mean to the Metro Detroit area and how soon can we expect the changes to occur?

Everything is uncertain as how it will affect Detroit and the Detroit suburbs? FHA, Fannie Mae, and Freddie Mac are the government and quasi government agencys that now have to set guidelines for mortgages. It may take time for those agencies to come up with guidelines.

Some of the issues that have to determine is which areas are high cost areas, which area will be included in the changes, what is the median home cost. All of these factors will determine whether Detroit and metro Detroit mortgage holders will benefit from the plan.

Even after FHA, Fannie Mae, and Freddie Mac determine the new mortgage guidelines, the banks have to set their guidelines. One bank even sent out an email stating that they have to determine the impact the guidelines have. The banks owe it to their share holders to minimize risk and make money. So you may see some banks still shy away from those big loans. Would you as a big bank want to put $600 -$700,00 at risk at one loan or would you rather do 3 $200,000 loans. It is in the banks best interest to spread the risk amongst 3 loans than 1 big one. I bet that you will see a higher rate from the banks for the high loan amounts. Only time will tell. I'm just guessing, but whatever the outcome there will be people that benifit from the plan. No it will not solve all the problems, but it is a start. I hope for the people of Detroit, the people that live in Metro Detroit suburbs that they get relieve in this mortgage crisis. Have a great day. Russ Ravary. For more on Michigan mortgages, house hunting tips, buying a condo (what you should think about) go to my website www.russravary.com

2008-02-13T15:17:00.000-08:00

Northville Real Estate
Latest Maple Hill Subdivision Neighborhood Update, Northville, MI as of January 1, 2008 There is 1 Northville home currently for sale in the sub. The average list price is $395,000 and on the average has been on the market for 285 days
Price-Address-Bed
$395,000-17333 VICTOR CT-3

IF YOU OR ONE OF YOUR FRIENDS, OR CHILDREN WOULD LIKE TO SEE ONE OF THESE LOVELY NORTHVILLE HOMES EMAIL ME AT INFO@RUSSRAVARY.COM OR CALL ME ON MY CELL AT 313-310-9855
Here are all the Northville homes that have sold in Maple Hill, Northville, MI in the last year as of 1/1/2008
Price-Address-Bed-Sold Date
$292,000-17870 MAPLE HILL DR-4-9/25/2007
$307,500-17236 CAMERON DR-4-8/3/2007
$317,667-17540 MAPLE HILL DR-3-11/25/2007
$335,000-17200 VICTOR DR-4-5/31/2007
$345,000-17892 MAPLE HILL DR-3-1/3/2007
$349,000-17871 MAPLE HILL DR-3-7/24/2007
$350,000-17305 MAPLE HILL DR-4-11/12/2007
$368,000-17280 SUMMIT DR-4-5/23/2007
$380,000-17800 MAPLE HILL DR-4-6/10/2007
$380,000-17265 MAPLE HILL DR-4-10/2/2007
$390,000-17297 VICTOR CT-4-2/12/2007

1 Northville home has sold Maple Hill Subdivision in the last year with an average price of $346,742 after being on the market an average of 110 days.

Remember when you price your Northville home right it will not sit on the market as long. So if you have to move call me for the latest comparative market analysis (CMA) of your Wayne County Subdivision or Oakland County subdivision.

If you want other Northville subdivisions or City of Northville, MI info go to my website http://www.russravary.com/ You can get buyers tips, sellers tips, or search Michigan homes for sale for free without giving any personal contact info or logging in! IF YOU WANT A NEIGHBORHOOD UPDATE FOR YOUR SUBDIVISION EMAIL ME AT INFO@RUSSRAVARY.COM I hope this Michigan neighborhood newsletter helped you! And helps keep you up to date. If you are thinking of selling a home give me a call or email me at info@russravary.com Or if you know somebody that is looking to buy a home I will help them search out a good deal. Have a great day. Russ Ravary

Lakes of Northville subdivision real estate update, Northville Township, MI

2008-02-13T15:04:00.000-08:00

Northville Township Real Estate
Latest Lakes of Northville Subdivision Neighborhood Update, Northville, MI as of January 1, 2008

There are 6 Northville Township homes currently for sale in the sub. The average list price is $332,267 and on the average has been on the market for 226 days
Price-Address-Bed
$2,200-41584 WATERFALL RD-3
$294,900-41881 PON MEADOW DR-4
$310,000-41934 PONMEADOW-3
$325,000-42400 BRADNER RD-4
$325,900-17148 PON VALLEY DR-4
$337,900-41584 WATERFALL RD-3
$399,900-42359 BRADNER-4

IF YOU OR ONE OF YOUR FRIENDS, OR CHILDREN WOULD LIKE TO SEE ONE OF THESE LOVELY NORTHVILLE HOMES EMAIL ME AT INFO@RUSSRAVARY.COM OR CALL ME ON MY CELL AT 313-310-9855

Here are all the Northville Township homes that have sold in Lakes of Northville, Northville, MI in the last year as of 1/1/2008
Status-Price-Address-Bed-Sold Date
Leased-$1,850-42092 N WATERWHEEL CT-4-8/31/2007
Leased-$2,100-42155 WATERFALL RD-4-4/15/2007
SOLD-$257,500-17233 LILYPAD CT-4-5/19/2007
SOLD-$301,500-42016 CRESTVIEW CIR-4-10/15/2007
SOLD-$315,000-42063 CRESTVIEW CIR-3-8/10/2007
SOLD-$315,000-18080 WINCHESTER-4-9/13/2007
SOLD-$325,000-42035 CRESTVIEW CIR-4-6/5/2007
SOLD-$331,500-41473 WATERFALL RD-4-10/26/2007
SOLD-$332,000-42144 CRESTVIEW CIR-4-4/10/2007
SOLD-$333,000-17732 FARMCREST CT-4-8/3/2007
SOLD-$380,000-42164 N WATERWHEEL CT-5-3/8/2007

3 Northville Township homes have sold in Lakes of Northville subdivision the last year with an average price of $236,667 after being on the market an average of 124 days.
Remember when you price your Northville home right it will not sit on the market as long. So if you have to move call me for the latest comparative market analysis (CMA) of your Wayne County Subdivision or Oakland County subdivision.

If you want other Northville subdivisions or City of Northville, MI info go to my website http://www.russravary.com/ You can get buyers tips, sellers tips, or search Michigan homes for sale for free without giving any personal contact info or logging in! IF YOU WANT A NEIGHBORHOOD UPDATE FOR YOUR SUBDIVISION EMAIL ME AT INFO@RUSSRAVARY.COM I hope this neighborhood newsletter helped you! And helps keep you up to date. If you are thinking of selling a Michigan home give me a call or email me at info@russravary.com Or if you know somebody that is looking to buy a home I will help them search out a good deal. Have a great day. Russ Ravary

The death of 100% mortgages

2008-02-12T18:21:00.000-08:00

We got an email today stating that after March 1, the PMI company will no longer insure over 97.01%.. What that means to the consumer is the only way you can get an 100% mortgage is if you can find a company to do a 80% first and a 20% second (80/20 loan). That is not likely in our market right now. Very few if any banks are doing a 100% loans any more. So if you are thinking of buying a home this year, start saving money. You will either need to borrow 3% from a relative or have 3% of the purchase price in your savings account. FHA loans may become very popular. For more on credit scores, mortgages, buying foreclosures, FSBO's, negotiating tips, and Michigan real estate go to my website www.RussRavary.com

4 things to do before buying a home

2008-02-11T18:08:00.000-08:00

1. You should, get preapproved for a mortgage before you go looking for a home.
Pre-approval is easy, and you can be relaxed when shopping for your new home. Your local mortgage broker can provide you with written preapproval for you at no cost and no obligation, and it can all be done quite easily over-the-phone or via email. Do not pay to submit an application! Most Real estate agents want you to have a pre-approval letter before you start looking for a home.
2. Know what monthly payment you can feel comfortable with.
When you discuss mortgage preapproval with your bank or Mortgage broker, find out what amount you qualify for. But you should have determine what kind of monthly mortgage payment you can afford each month yourself first. Many banks and lenders will give you an approval for a bigger amount, but you have to be smart. Just because they give you a bigger amount doesn't mean you should take it. It is just like a credit card. Just because your limit is $30,000 doesn't mean you should spend that much. Your credit situation may give you a pre-approval amount that is higher (or lower) than the amount of money you would want to pay out each month. By talking with your mortgage broker or bank to determine what this payment amount is, and what value of home this translates into at today's rates, you won't waste time looking at homes that are not in your price range.
3. You should be thinking about your long term goals and situations, to determine the type of mortgage that will best suit your needs.
My belief is that most people should get a fixed mortgage. There are a number of questions you should be asking yourself before you commit to a certain type of mortgage and be honest with yourself! How long do you think you will own this home? Are you discliplined in saving for taxes and insurance payments? What direction are interest rates going in, and how quickly? Is your income expected to change (up or down) in the near term, impacting how much money you can comfortably afford to pay monthly? The answers to these and other questions will help you determine the most appropriate mortgage you should be seeking.
4. You should seriously consider dealing with a Mortgage Expert that you are comfortable with. Consider dealing only with a professional who specializes in mortgages that is not pushy. An expert that will take the time to explain the mortgage process. Remember your home is one of the biggest investments you will make. You need to understand the mortgage and financing process.

For more on Michigan mortgages, mortgage information, and credit go to my website www.RussRavary.com Also you can view testimonials from some of my clients.

Adjustable Rate Mortgages

2008-02-10T04:26:00.000-08:00

I was on www.Activerain.com (another blogging site) this morning and read a blog from a mortgage person recommending or promoting adjustable rate mortgages. He was partially right in some aspects. Yes some adjustable rate mortgages rates are better than a 30 year fixed rate right now. Yes you can save money. Yes if your plans are to move in 3 or 5 years it may be a good alternative.

HOWEVER, ADJUSTABLE RATE MORTGAGES HAVE GOTTEN MANY PEOPLE IN TROUBLE. You have to look at the down side that is possible. Not just at how much you are going to save. You have to think what happens if I can't refinance later on because the rates have gone up. Or you can't refinance because the home value has gone down. ( like right now)

I am an old school person. I believe you should be trying to pay off your mortgage, not have a mortgage when you retire. I believe more in a 30 year fixed mortgage, though there are cases when a Adjustable rate mortgage is okay. An adjustable rate mortgage is okay if you plan on selling before the rate adjusts. But for me to promote them as a great way to no. No way, no how.

For more on Michigan mortgages, Michigan real estate, and Michigan things to do
go to www.russravary.com

Have a great day. Russ Ravary

Tougher refinancing rules for Michigan Mortgages

2008-02-09T06:00:00.000-08:00

New guidelines in the mortgage industry is making it tougher for many people to refinance or purchase a home. 100% loans are just about a thing of the past. The reason why is that Lenders have categorized much of Michigan as a "declining market" What that means is that Michigan home values are falling. Lenders are worried that if they make a 100% loan it may only be worth 95%. So what the lenders are doing is taking 5% off of the maximum value they will loan. So many banks and lenders will only 95% of the appraised value or the purchase price of the home.

Home equity lines are getting tougher to get. Chase will now only do 75% home equity loans in Michigan. Countrywide Home Loans sent out about 200,000 letters to clients across the country. They closed down the clients home equity lines. They just closed them down and the clients are out of luck. No warning. You do not have any available credit anymore on your home if you got one of those letters. I believe you will see many lenders following suit on high percentage home loans over the next few years. Home equity loans have some of the highest foreclosure and deliquency rates. So banks are going to be more careful about granting a home loan. For more on Michigan mortgages, credit scoring, and Michigan real estate go to my website www.russravary.com. Southeastern Michigan's #1 informational real estate and mortgage site. Have a great day Russ Ravary

FHA Refinancing

2008-02-07T18:28:00.000-08:00

If you have a FHA mortgage you may still be able to refinance even though your home value has fallen. FHA does streamline refinances. Which means that you may be able to refinance your home without getting an appraisal. What you need to have is good credit for the last year. You may be able to have a few credit blemishes. Take the time and see a mortgage person or Loan officer to see if you qualify.

Too many people assume they can not refi. Take the time and go to a mortgage broker. They usually don't charge to review your situation. The biggest thing is don't be sucked into a higher rate or higher payment. Do not pay high fees or an application fee. There is no sense in giving somebody an application fee if it can not be done. There are many lenders that do not charge an application fee. You can find out whether you can refinance without paying a fee.

There are many options that may be available to you. One that many people are not taking advantage of is calling your existing lender. Call your existing lender to see if they will make your adjustable rate mortgage into a fixed rate mortgage. Some lenders are willing to do that so you do not go into foreclosure.

If you live in Michigan and have a mortgage and would like to go over your options feel free to give me a call at (313) 310-9855 or email me at info@russravary.com For more on mortgages and Michigan real estate go to my website www.russravary.com

Foreclosure looming?

2008-02-05T18:22:00.000-08:00

Are you behind in mortgage payments? Your financial life and world spinning out of control? Are you overwhelmed by all your debts? You should check out all your options. Go see a debt counselor and go see a bankruptcy attorney. Tell them both that you are seeing the other one before you make a decision what to do. Bankruptcy would be the easiest way to start over and get back on your financial feet. Yes, it will take time to get your credit scores back and you will not be able to buy a car or get credit cards for a few years. You need to make a plan to be sure you are covered in those aspects.

If you let your home go into foreclosure you will not be liable to the mortgage payments any longer, but the bank may send you a 1099 for the money they forgive. Can you afford to pay the extra taxes. You may also want to see your tax person to see the consequences of getting a 1099.

The other option with the debt counselor: Can you make the payments they set up? They will most likely negotiate with your creditors to get a lower balance and lower interest rate. Remember as soon as you sign up with the debt counselor and they negotiate with your creditors it will show up on your credit report. A debt counselar is a negative to lenders. Remember why would they loan you more money if you need a debt counselor to pay the debt you have.

What ever you do, explore your choices. Then make a sound decision on what you can do. The sooner you start the sooner you get back on the path of good credit. For more on credit scores, and Michigan mortgages go to my website www.RussRavary.com

Should I refinance part 2

2008-02-04T04:30:00.000-08:00

So you are thinking about refinancing. If you are in a fixed mortgage and have been in the mortgage for 3 or 4 years it may not make sense to refinance.

You have to work the numbers. Lets say you are going to save $50 a month, it is a no-closing cost loan, and you have been in your other mortgage for 4 years. So what you do is multiply your mortgage savings a month by the number of months left. So 26 years times 12 months a year times $50= $15,600 savings

But you are going to have a $200,000 at 5.75% and now you are back to 30 years. You have 4 extra years of mortgage. So what you do is multiply $200,000 times .0575 times 4 years= 46,000 in interest costs.

So sure you are saving $50 a month but you are adding on 4 years and $46,000 in interest.
That doesn't make sense financially.

If you live in Michigan and want to find out if refinancing is good for you email me at info@russravary.com For more Michigan mortgage articles and mortgage info feel free to go to my website www.russravary.com

Should I refinance?

2008-02-01T18:17:00.000-08:00

Whether you should refinance your mortgage is simply a numbers game. Does it make sense financially to do it? Will it reduce your payment? Will it shorten years off your mortgage? What will be the payback? You have to figure out what the closing costs will be versus how much you will save each month. For example if you are going to save 50 dollars a month and it is going to cost $1600.00 to refinance. Then your payback time is 32 months ($1600 divided by $50). So you will not be saving any money until the 33rd month. If you sell or refinance again before 32 months you will have wasted your money!

Take the time to figure out what you are saving. Sit down with your mortgage broker, bank loan officer to go over the numbers. Then make a solid decision based on the numbers! If you are a Michigan home owner and would like to find out whether it makes sense for you to refinance your mortgage give me a call on my cell at (313) 310-9855 or email me at ourmortgageguy@yahoo.com Feel free to visit my website at www.russravary.com for more mortgage information, types of loans available, and Michigan real estate

No-cost loans and how they work

2008-01-31T15:26:00.000-08:00

How can people do a no-cost loan, there must be a gimmick. No cost loans are they for real? True No fee loans or true no cost loans are done by many mortgage brokers, banks, mortgage lenders. When you borrow money you usually have to pay appraisal fees, title insurance, title closing costs, bank processing fees, flood insurance checking. These fees add up to $1200 -$2500 depending on the bank and the size of the loan. So how can somebody do a no cost loan?
Here is how they work. Loan officers, banks, mortgage brokers make more money the higher the rate they sell you. For example at 4% they may make get 1% of the loan amount. So at 4.25% they may make 1.4% of the loan amount and at 4.65% they may make 2% of the loan amount.
So lets use the example above on a $200,000 loan. If your Michigan mortgage person does a 4% loan for you they make 1% of $200,000 or $2000 that is split between the company for overhead and the mortgage person.
Now if you have $2000 in closing costs they can give you a rate of 4.65%. They make 2% of $200,000 or $4000. They take $2000 of that money to pay the closing costs out of their pocket. That is how a no cost loan works. It is also how one bank or mortgage broker may have lower closing costs than somebody else. They are taking some of their commission to pay your closing costs.
Is it worth doing a no cost loan? Let's say you have a 5 1/8% loan on $200,000 with a payment of $1088.97 a month that you got last year. Your mortgage person offers you a 4.65% no cost loan with a payment of $1031.27 that does not cost you a dime or raise your mortgagebalance. You save $57.70 a month! You would save $20,772 over the life of the loan. It is a no brainer.
But let me play the devils advocate here. Why wouldn't you do the 4% loan? I this case I would if I had the $2000 in closing costs and I did not have to roll it in. The payment on 4% is $954.83 a savings of $123.04 a month which means it would take 16 1/2 months to break even. Are you going to stay in the house for over 16.5 months. Then it would be worthwhile to do the lower 4%. The payback time is different for every loan and every percentage rate.
You have to work the numbers when offered a no cost loan. Ask your mortgage person for the full fee loan too. Then make a decision after you run both payments and figure the payback time. Many times it is not worth it to refinance but it might make sense to reduce your payment if it does not cost you a dime.
For more on Michigan mortgages, credit scoring, and Michigan real estate feel free to go to my website www.russravary.com Have a great day!!! Russ Ravary

Fed drops rates again

2008-01-30T17:43:00.000-08:00

The Fed drops it rate again, and it had no effect on the Michigan mortgage interest rates today. 30 year Mortgage interest rates are still below 6% but have not dropped dramatically for any length of time. Hopefully in the next month we will see rates slowly creep down. There are a lot of people out there that could use a break to get their adjustable rate mortgages changed into a fixed rate mortgage.

If you have an adjustable rate mortgage you should contact a mortgage person. They can check the value of your Michigan Home to make sure a bank will even loan against the house. Many homes have lost a lot of value making it impossible to refinance. Also the loan officer can put you on a watch list so when the rates do come down that you will be notified. It may make sense for your neighbor to refinance at 5 3/4% where it may not save you any money because you had a lower rate than he did before. You may need it to come down to 5 3/8% before it makes sense to do it. A No-closing cost loan may make sense for you. Email me at info@russravary.com to find out when it would make financial sense for you to refi and to be put on a rate watch list. For more on Michigan mortgages and Michigan homes for sale go to my website www.russravary.com

Have a great day. Russ Ravary

Why rent, when you may be able to buy

2008-01-29T18:13:00.000-08:00

If you are renting the main question you should ask yourself is "DO YOU WANT TO GET AHEAD IN LIFE?" It is a fact that people who own houses are wealthier than people who rent. When you buy a home it is like a forced savings plan. Each month you make a house payment some of the money goes to reducing the amount you owe on the house. The longer you pay the more you are paying off the house without your payment going up!

If you have rented for a year, wouldn't be great to know that $1000 of that money you paid in rent was your money, your asset, your wealth. Well sorry RENTING DOESN'T WORK THAT WAY, BUT BUYING A HOME DOES! If you are renting in Southeastern Michigan and would like to find out whether you can buy a home feel free to contact me at info@russravary.com or visit my website www.russravary.com for lots of great buyer tips and first time home buyer advice. We can help you plan, or get started right away to buying a home of your dreams. We even help you straighten out your credit if you have past credit issues.

Credit and buying your own home

2008-01-26T18:42:00.000-08:00

Building your credit is a important step in buying a home. With banks tightening the credit guidelines it is more important than ever to get your credit report and go over it with a professional. A mortgage person, a loan officer, a bank loan officer are all people that can help you get a credit report and get you started on clearing up your credit.. All of us should help you, after all we want you to come back and use us.

Bad credit is nothing to be ashamed of. Most of us go through it at one time or another. I had bad credit when I was younger, but I climbed out of it. If you live in Southeastern Michigan and want to buy a home I will be glad to sit down and go through your credit report line by line. I can help your clean it up so you can buy a Michigan home. It is not hard, it just takes a little time.

The most important thing is to get started today to see what your credit report looks like. Once you know what your credit is, then you can take the steps needed to get starting toward owning your own home. You may have great credit and be able to get pre-approved for a home right now. Call me today on my cell at (313) 310-9855 or office (734) 414-3261 or email me at ourmortgageguy@yahoo.com For more on Michigan credit scoring or Michigan mortgages feel free to go to my website http://www.russravary.com

Have a great day "your local Michigan mortgage specialist" Russ Ravary

Fed rate and mortgage rate there is a difference!

2008-01-25T12:48:00.000-08:00

I had a great dialogue on Active Rain.com with another Real estate agent about the difference between The Fed Rates and the mortgage interest rate.
So the Fed cut the rate.

Difference between the fed rate and mortgage interest rates.

How does a ¾ of a percent drop in the Fed rate affect us? So many consumers think that the Fed Rate is the mortgage interest rate. It is not the same thing. It is one of the most misunderstood things in the mortgage industry. The ¾ of a percent drop in the Fed rate may or may not affect the mortgage interest rate. The Fed rate and the mortgage interest rate are two separate rates. If one goes down it does not mean the other goes down too!
The Fed rate you hear so much about if the Rate the Federal government gives on overnight loans from bank to bank. We as consumers do not get that rate. Mortgage interest rates are determined by market conditions. Some of the things that affect the mortgage interest rates are:
How well the bond markets is doing? especially the 10 year bond market
How well the stock market is doing
Are the housing starts down?
Are unemployment numbers down?
How is the economy?
Are the numbers that came out today high or lower than expected?

Generally speaking mortgage interest rates get better because the stock market is doing worse and people are investing more in the bond market. It is many times an inverse relationship. If the stock market is doing good then mortgage rates are doing bad. That is generally what happens. If unexpected bad news such as higher unemployment numbers, lower housing starts, bad economic news usually results in better interest rates. Inflation, great economic news makes interest rates to go up.
So the bottom line is that a ¾ of a percent drop in the Fed rate does not correlate to a ¾ of a percent in mortgage rate. In fact sometimes when the Fed drops its rate the mortgage rate may not change at all. I have even seen it go up on occasion. Eventually some of the Fed rate percentage drop does affect the mortgage interest rate.
Think of it this way people rush to buy "safer" investments like bonds when there is bad economic news. Investors are looking for the best rate of return. So if they think the stock market is not the best place to be. There is more money in the bond market and sometimes lower rates.
The above is a brief generalization of what happens with mortgage interest rates. It is a complex item. It could take a novel to truly explain everything that affects it and how it affects it in different market conditions.
So what you need to take away from this is that:
1) The fed rate is not the mortgage rate.
2) That the mortgage rate is determined by market conditions especially the bond market.
3) The mortgage rate changes daily reacting to market news and conditions
4) If we as "mortgage experts" could predict interest rates we would be rich just like we would be rich if we could predict the stock market.
There is a point that adjustable rate mortgages should come down, along with credit card rates and home equity loans. The point that I am making is that because the Fed lowered the rate 3/4% does not mean it is going to be a 3/4% of a rate drop in mortgage rates. Tuesdays mortgage rates did not change much. Some banks didn't change at all so changed a 1/8% of a percent. Not 3/4%
Mortgage interest rates almost never correlates or exactly match the fed rate drops. Like I said sometimes I have seen them go up the day the Fed lowers their rate. In fact that is the case this week. Rates are now higher on Friday than one Tuesday when the Fed rate was cut.

The Fed rate and the mortgage interest rate are not directly correlated. The fed rate is a just one of the many factors. It is not the most important by any means. It is more market conditions that influence mortgage interest rates. The price of 10 year bonds influence it more than anything.
Take example Wednesday. Mortgage Rates did drop this morning down 3/8% from Monday's rate. So just comparing the Fed drop to mortgage rate that was just 1/2 of the fed rate drop. But what is even more interesting is what happened this afternoon is that rates jumped back up because the Dow was up. Every bank repriced. I have gotten fifteen emails stating the rates changed. . So tomorrow morning mortgage interest rates may look like they never changed even though the Fed dropped their rate 3/4%
Today's low rates were there for about 4-5 hours!

Like I said, I have seen too many times when the rate was there for a few hours or for a day. I called the borrower to inform them and then they didn't make a decision the same day. And then the rates were gone. It is a tough thing to tell a borrower that they waited to long. I know people that were waiting for it to go lower in 2003 and ended up with a 5.875% rate instead of a 5.375% rate. They didn't make a decision quick enough. When you loan officer calls sometimes you have to make a quick decision. There are lots of loan officers that will tell you horror stories of people not wanting to lock a rate and then upset that they didn't.
During 2003 there were times when the Fed lower the rate and the mortgage rate actually went up. That is because sometimes the market has already figured in the Fed's drop and other market conditions outweighed it.
I hope this explains it a little better. If a consumer and real estate agent is more informed about the mortgage process the higher the comfort level they will have. Your home is your biggest investment. Hopefully the rates come back down a little for all the people that need to get out of their adjustable rates. We all want them to keep their homes and help stabilize our economy a little more.
For more mortgage and real estate information and to search Oakland County real estate, or Southeastern Michigan homes for sale go to my website www.russravary.com Have a great day! Russ Ravary

Lower mortgage rates this week

2008-01-21T16:35:00.000-08:00

Hello Michigan,

Many people do not follow the mortgage market. Here is the latest update. Mortgage rates for 30 year fixed mortgages have dropped below 6% in the last few weeks. The people that this might be good for:

For people with adjustable rate mortgages this may be an opportunity for you to refinance and lock in a fixed rate. It may even pay to lock in a rate now if you are a year or two out.

For people who bought a home last year, mortgage rates are much lower right now. If you put money down you may be able to refinance and save money. You can even do a no-cost loan and save a substantial amount of money over the 30 years. It may not cost you a dime.
If you want to find out how much you can save or whether you can refinance to a lower rate feel free to call me on my cell at (313) 310-9855 or email me at ourmortgageguy@yahoo.com Feel free to visit my website at www.russravary.com for more mortgage information, or credit scores, credit info.

Reducing your mortgage payment

2008-01-19T15:04:00.000-08:00

So you got the notice in the mail that for $150 you can sign up for a mortgage reduction plan. They say they can CUT UP TO 7 YEARS OFF YOUR 30 YEAR MORTGAGE. The plan most likely calls for you to send in half your mortgage payment every two weeks. This is called a bi-weekly mortgage reduction plan.

THIS PLAN WORKS!!!!! If you break down the plan it works like this. What you are actually doing is making 13 payments a year. There are 52 weeks a year. So if you send in a payment every 2 weeks you are sending in 26 payments. So if you are sending in 26 payments every 2 weeks (26 divided by 2=13 payments) it is 13 full payments.

No, you are not sending it directly to the mortgage company usually. What the company that is promoting this is doing is having you send in the first ½ payment then holding it until you send in the second ½ payment. Then the company sends it in to your mortgage company. For this there is a $150 upfront fee and usually a $3 charge per payment. So it cost you sometimes $75 a year. Check out the charges.

Is it a good deal? Yes if you do not have the discipline to do it yourself. It pays off your mortgage quicker.

BUT YOU CAN DO IT YOURSELF AND AT NO COST! If you just send in an extra 1/12 of a payment each month you will do the same thing. Let’s say your mortgage is $1800 a month. If you sent in 1/12 ($150.00) of your mortgage payment added to your regular payment. ($1950) you should cut off about 7 ½ years. So instead of a 30 year mortgage you should be paid off in about 22 ½ years. And you did not have to pay a middleman.
Every extra little bit of money that you send in with you payment will reduce how long you will pay on your mortgage.

For more mortgage information free free to go to my website www.russravary.com

Low mortgage rates

2008-01-16T18:04:00.000-08:00

In the last week rates have dropped below 6%. Mortgage applications in the last week have risen because of the better rates. It is a great time for people who bought last year. Many people that bought last year have rates over 6% and now is a great time. You may be eligible for a no-cost loan or you may just be able to lower your payment.

Also if you have an adjustable rate that is due to expire, it may be the time to look at refinancing. It is a time to think about refinancing your adjustable rate. The bottom line is look at both the costs, the payment, and the APR. For more on Michigan mortgages feel free to go to my website www.russravary.com
My website is full of useful information on Michigan real estate, search Oakland County real estate, Start your Michigan Condo Search, buyers tips.

Have a great night and feel free to contact me with any mortgage or real estate questions.

Russ Ravary

How to fight your michigan taxe assessment

2008-01-15T16:31:00.000-08:00

Fighting your Michigan taxes
I will be blogging about fighting your tax assessment quite a bit the next month. Tax notices will be coming out next month. With home values falling in Southeastern Michigan you may be able to reduce your tax burden. But every homeowner that has bought a house in the last 10 years should be checking it out whether they are paying too much.

Many people do not know how to read their property tax statement. This is another item they should teach in school but they do not. It is important and people get confused about the statement. Your home is one of the biggest investments you make so reducing the taxes makes sense if the city is overcharging you.

There are 2 numbers on your Michigan property tax notice. One is the state equalized value (SEV) and the other is taxable value. State Equalized value is the 1/2 of the value the local assessor places as the cash value or fair market value of your home. Taxable value is the actual number that the municipality uses to figure how much your taxes are. Taxable value x your Millage rate = amount of taxes you owe. Normally the taxable value number is lower than the SEV.

Look at your statement. See the two numbers (Taxable value and SEV). Sure the assessor thinks your house is worth a lot. But times both the taxable value and SEV by 2. The taxable should be lower or equal to the SEV.
In order to make it worthwhile to reduce your taxes, homes in your area should be selling less that the taxable value times 2. For example. Your tax statement reads taxable value as $115,500 and the SEV as $163,750. The assessor thinks your house is worth $325,500 (163,750 x 2) but you are only being taxed on the value of $231,000 (115,500 X 2). In order to reduce your taxes in this instance, homes comparable to yours would have sold less that 231,000. You need comparables to prove to the board of review and the Michigan tax tribunal that they should reduce your taxes.
For more on how to fight your taxes, steps and timeline involved in fighting your taxes, and understanding your tax bill go to my website www.russravary.com The information is in a yellow box on my home page. Click on the section you want to know more about.
Have a great night! Russ Ravary

Closing Credit cards and home equity loans is sometimes bad

2008-01-14T16:54:00.000-08:00

Did you know that your credit score could drop if you close out unused credit cards. The credit bureaus figure out how much you owe and how much available credit you have. The more you owe the lower your score will be.

For example you have a Visa card that you do not use. It has a $25,000 limit. With all your credit card bills, mortgage, car bills you owe a total of $ 193,625 You have a home equity line and other credit cards that are not up to their limit. You have available credit of 280,000.

The credit bureau looks at 193,625/280,000. You have $86,375 in available credit

If you closed your home equity line and a credit card you now have 193,625 in debt and only 200,00 total credit.

The credit bureau can see you are about maxed out. They lower your credit score because you are a bigger risk.

Sometimes older people have tremendous credit scores because their mortgage is about paid off, they have credit cards but not much is on them. And they have a long history. They have a large amount of available credit so their score is higher.

For more on Michigan real estate, mortgages, credit and credit scoring feel free to go to my website www.russravary.com

Michigan property taxes to high?

2008-01-13T16:05:00.000-08:00

Fighting Your Michigan Taxes

Fighting your Michigan Property tax assessment

So you think you are paying too much in property tax. How do you know that you are? First of all, do you understand the difference between your state equalized value (SEV) and your Taxable Value?Remember you are not appealing the taxes, you are appealing the assessment, the SEV. By appealing the SEV you reset the SEV and the taxable value. It should be in your best interest for years to come.

Difference between SEV and Taxable Value
Your SEV is determined or set when there is a change in ownership of the property. I.E. when you buy the property the SEV is "reset" by the assessor to the current SEV. The state equalized value (SEV) is 1/2 the cash value of the property. (Or market value). The assessor usually determines what the SEV is by using comparables that have sold over a 2 year period. Just because you bought the house at $200,000 doesn't mean that the SEV will automatically be $100,000. The SEV value of the house may be above or below the purchase price. In the buyers market of 2007 & 2008 I am seeing many SEV's higher. That home with a $200,000 purchase price may have a SEV of $260,000.

After you buy your home then taxable value will become more important. There are two numbers on your tax bill. SEV and the second is taxable value. Proposal A of 1994 changed the way taxes were determined. Instead of increasing taxes based on 50% of actual cash value, commonly referred as SEV (state equalized value) now after the first year you buy a home property taxes are based on taxable value. If a property is not acquired during that tax year then the increases in taxable value are limited to the lesser of five percent or inflation. So boiling that down in English the first year you buy a home the taxes are based on SEV. The second year the taxable value is SEV plus the lesser of five percent or inflation. Remember inflation on the house can be negative so sometimes taxable value and SEV can go down.
The first year you are taxed on the SEV value and then from then on you are taxed on the taxable value.

The idea of Proposal A was to limit the huge increases in property value so people would not be forced out of their home because it was worth so much. Proposal A would average out the increases in your property tax.
So after the first year the number you need to pay attention to is taxable value. That is how your taxes are determined. The taxable value times your cities millage rate will equal the amount of tax you owe. In a rising real estate market your SEV will be much larger than your taxable value. The reason for that is that taxable value can only increase the lesser of 5% or inflation where SEV is similar to the market value. In most cases if a person has lived in a home for many years the SEV will be much larger than the taxable value.
*Millage rate explanation
*More on Millage rate explanation
*Oakland County Millage rates
*Wayne County Millage Rates
*Livingston County Millage rates
*Michigan Millage Rates
So in order to reduce your taxes you must be able to reduce your State Equalized Value (SEV) below your taxable value or it is not worth fighting for.Fighting your taxes will take time, and maybe a little money. You have to remember the tax system and the municipalities want to keep the taxes as high as possible to keep their revenue up. So sometimes you will not win the tax fight. Sometimes the boards of review are a rubber stamp to say "NO" forcing you to take it to the next higher level. The system is set up to protect the assessment and the burden of proof is upon you. You must get the facts to change your taxes.

For the steps on How to fight your Michigan Property taxes, How to lower your Michigan Property tax assessment feel free to go to my website www.russravary.com and visit my millage rate explanation or fighting Michigan taxes.

Declining market stigma in Metro Detroit

2008-01-07T16:46:00.000-08:00

What a beautiful day in the Metro Detroit.. 60 degrees in January. What a few hours and what a change it will be. That sums up the mortgage market from last year to this year. Banks are taking tremendous beatings on foreclosures. I have seen three homes in the last day that the bank is going to lose over a $100,000 on each one. The banks have tighten the guidelines, charging more if you don't have great credit. Now to get the best rate you have to have a 680 credit score or better.
You can still get approved for a mortgage but an 100% mortgage in Metro Detroit is just about gone. Many banks have identified or categorized Southeastern Michigan real estate as a "declining market" What the banks are saying is that homes in Southeastern Michigan are most likely going to continue to go down in price. To protect themselves most banks now won't lend 100% in Michigan because the house may be worth less in a year.
The bottom line is that buyers are going to need to have a down payment if they want to buy a home. Now is the time to start saving for a down payment whether you are thinking of buying next month or next year. The more you save the better your interest rate will be.

If you want more information on mortgages or buying a home go to my website www.russravary.com You can contact me at info@russravary.com or call me on my cell to help me plan your purchase.

Changing Mortgage market

2008-01-04T07:12:00.000-08:00

Changing Mortgage market
Everybody knows that the mortgage market is changing, but here is a little update. Most of the banks are now doing even higher "hits" to high loan to value (LTV) loans based on credit scores. Loan to value means how much you owe compared to how much the house is worth. For example if you owe $160,000 and the house is worth $200,000 then your Loan to value (LTV) is 80%. Normally the banks give hits for anything over 80%. The higher the loan the higher the "hit" "Hits" are something most borrowers never even know about, but that is figured into how your rate is determined.
What is new in the last few months is that the lower your credit score the higher the hit. It can affect your rate up to 3/8 of a percent. Now the mortgage market is truly making a difference between good, better, and best credit scores. So it is more important than even for borrowers and consumers to keep on top of their credit.
For more information on mortgages go to my website http://www.russravary.com/ You can search for Novi real estate or Plymouth real estate for free. Or search for any Southeastern Michigan homes for sale without giving any information.

Fixer uppers and flipping homes

2007-07-20T03:56:00.000-07:00

So you are thinking of buying a fixer upper, fixing it and reselling it. The key is in planning, good estimating. The oft heard phrase "Buyer Beware" is never more appropriate than when considering the purchase of a fixer-upper. You must know exactly what you*re getting into before buying.
It*s commonly believed that fixer-upper properties represent easy money that is ripe for the taking - that you can buy it, do a little work on it in your spare time, then flip it (sell it) and make lots of money. This isn't the case most of the time. Although, with proper planning and thought, money can be made by buying *fixer uppers*. And for many first time buyers who intend to live in the house while working on it, buying a fixer-upper can be a great option. By buying a fixer upper you get sweat equity. You will gain equity in the home by bringing it up to normal standards. The key is to buy a home below market price and to be able to put less money into it than a comparable good home. If you can buy a ready to move in home (in top shape) for $200,000 and you want to buy a fixer upper for $150,000. Then you should not have to spend more than $25,000 to fix it up to make it a deal. It*s also less risky buying a fixer-upper when you can live in the house while fixing it. And of course, by living in the house for at least 24 months you should qualify for the IRS exemption of no capital gains. The most important thing to know before making a decision on such a purchase is what needs to be fixed. Do a spreadsheet. Jot down all the costs. Give yourself a cushion for unseen expenses. Any time you are spending money on improving a home with the notion of selling it later, strive to spend your money on things that buyers can easily see. Things like new paint and removing trash from the property cost little but have instant impact on curb appeal. Simple landscaping is the best. Landscaping does not bring a large return. Houses that have only cosmetic problems like peeling paint, an overgrown yard, shag or worn carpet or lots of wallpaper are the best bet. Fixing and cleaning cosmetic issues is fairly easy and inexpensive. It virtually always gives a good return on investment, particularly when you can do the work yourself. Kitchen and bathroom remodeling usually pays a nice return. Don*t be afraid of buying a fixer-upper in need of this kind of repair. Again the key is don*t go over the top. Do a good job, a nice job. But if it is a $100,000 house you don*t want to put in Granite counter tops and a jetted tub. Properties with structural damage, or a floor plan that requires major work to remedy, may not be "fixed up" at a profit. If you do not have construction experience or done a fixer upper before. Have an inspection for hidden damage performed by a home inspector, a friend that has experience, or construction professional before buying a fixer-upper. Michigan purchase agreements have inspections clauses in them; make sure you use that clause when doing a fixer upper. Then be sure to negotiate to try and get the seller to pay for all or part of the cost of needed repairs uncovered by the inspection (that were unseen). Often, sellers will be willing to lower the sales price to sell the home "as is" instead of paying for the repairs. Give the seller three choices, fix it themselves, hire a contractor to fix it, or reduce the sales price so you can fix it. Be careful that you don*t over pay. Especially if you plan to resell quickly, paying too much up front can doom your plans for quick profit. Research the market for reselling and have an exit plan for selling the house in place before making an offer. Remember when buying a fixer upper to put in the cost of paying a realtor to re sell it. Many people forget this. They have figured a $6,000 profit but forgot about the selling commission.
What about the cost of the mortgage and interest? If you aren*t living in the home, the mortgage payment is a cost! If it is going to take 4 months to fix it up then figure the payment as an expense. A $1500 payment adds up. In four months it is $6000 of profit eaten up. What happens if the house doesn*t sell right away? What happens if you have to sit on the house for 10 months? At $1500 a month then $15,000 of your profit is gone.If you are not going to live in the home there is one last thing item to remember is that if it is a second home, or investment property (in Michigan) you do not get the homestead exemption. Your taxes are going to be much higher. Approximately 40% higher. You have to figure that in as a cost also.
Good luck and happy house hunting.

For more tips on buying and selling Michigan homes or any home go to www.russravary.com

Search Michigan Real estate

2007-07-08T17:36:00.000-07:00

Appraisal Myths and facts

Myth: An appraisal determines your sales price. Did you know that one appraiser can appraise a Wayne county home and come up with one price and another different appraiser can appraise the same Wayne county home and come up with a totally different price. A third one can come up with a third price. They may never come up with the same price with they all appraise one Michigan house for sale. The appraisal process is very subjective. That is why it is better not to pay for an appraisal and use a CMA, comparative market analysis.
Myth: An appraisal is a guarantee of what my house is worth. My lender used the appraisal three years ago and the house was worth more than you are saying it is worth now. If your appraiser said your Oakland county home was worth $300,000 two years ago it was because there were homes similar to your that were selling for that price. Unfortunately Michigan house prices have fallen in 2006 and 2007. So many Michigan houses for sale were over priced when they went on the market in 2007.

Fact: An appraisal is a tool that lenders use to find out if the value of the home is there to give a loan out. Appraisers are licensed by the state and take continuing education classes. In Michigan appraisers have over 2000 hours of schooling and internship under another appraiser. The lender does not ask for a guarantee of value they are looking for a professional opinion.

Fact: Sometimes appraisals are rejected by the bank. Banks have other appraisers that double check the appraisal. If that appraiser feels the value is not there then they give a different value and the original appraisal may not be used.

So when you are ready to price your Michigan Home whether it is a Livingston county home, a Wayne county, a Washtenaw county home, or Wayne county home call me(russ ravary) to get you a CMA of your home. That way you will have the necessary information to price your home. It will give you what is for sale locally, what homes that are similar in size, style, and condition have sold for recently. That will give you the information to make a sound decision.

To get more information on selling your home go to my website http://www.russravary.com/ or search Michigan homes for sale

appraisals

2007-07-05T19:56:00.000-07:00

When to order an appraisal

You have completed the loan application, put in a purchase offer. When do you order an appraisal? You order an appraisal after the home inspection. You don't want to order and pay for an appraisal until the house passes inspection. If the house fails inspection you don't order the appraisal until you have a signed addendum stating the the seller will do the repairs, give you a lower price, or you accept the house as is. Then you order the appraisal

Appraisals are performed for the benefit of the lender. They are trying to justify the loan amount based on the appraised value. The appraiser will have a copy of the Purchase agreement. (contract). The typical cost of an appraisal is $275 - $350 and is normally paid to the lender upfront by the borrower. Appraisers charge more for rental properties, FHA appraisals, and multi family properties. Commercial appraisals start at $1500 and go up to $5000

An appraisal is subjective. One appraiser may come up with one value and another may come up with a totally different value. An appraisal is not what the house should sell for, it is a educated estimate of value using different value approachs.The most common way an appraisal is done is that the subject house ( the house being bought) is compared to 3-5 homes that are similar in style, size, and location that have sold in the last 6 months. So your appraisal is based on homes that have sold recently that are like yours and near yours!

STYLE By style I mean they compare ranches with ranches. They will not compare a ranch to a colonial. ( or 2 story)

SIZE, AGE By size I mean they compare square footage, number of bedrooms, bath rooms, age, garage, ammenities. Your home may be 1200 sq ft 2 bedroom,1.5 bath, built in 1999, with a 2 car garage. One of the ones that sold may be 1200 sq ft, 3 bedroom, 2 bath, built in 1952, with a 1 car garage. The appraiser has a general formula that he uses to give value to a 3 bedroom versus a 2 bedroom, A home built in 1999 is worth more than one built in 1952 so more value is given to the 1999 home. This gets very complex. What the lender is looking for from the appraiser is that he is not giving some ridiculous value to say the garage or the age. Remember very little value is given to updates. Bigger value would be given to an addition or a garage.

Location If it is in the city lenders like to see the comparable sold homes that the appraiser is using to be within a half a mile. Without crossing main roads or railroad tracks. This common sense, because if you cross a main road the houses can be totally different. The lender wants the appraiser to use the houses closest to the subject property. So if a similar house sold on the same street the appraiser is supposed to use it.That is how many times appraisals are different. Appraisers may be using different comparables (sold houses) and may be using a little different adjustments for the value of a three bedroom home versus a two bedroom home. It gets even more difficult when homes are not selling, or there are very few comparables close by. They sometimes have to go further away and futher back in time. Up to a year ago.

Appraisals are reviewed by the bank. Sometimes the bank has a review department in house or they pay another appraiser to review the appraisal. So there are checks and balances in the system.

What happens is your house does not appraise for the sales price ? Most houses do but every once in a great while one won't.Either the appraiser appraised it for less than the sales price or sometimes the bank rejects the value of the appraisal and will come back with a lower value of the house. What the means to you the buyer is that the sales price must be reduced or you have to bring more money to the table. For example you bought a home for $200,000 and you are borrowing 100%. The bank or the appraiser says it is only worth $190,000. The bank is only going to loan $190,000. You either have to go back to the seller and renegotiate the price or you have to come up with $10,000.

VA Appraisals: If you are getting either of these government mortgages, the appraiser will not only look at valuation but will also look at the condition. If defects are noted, they may require that they be fixed prior to closing. Since the borrower has such a low downpayment, Lenders want to make sure that Borrowers are not hit with any up-front maintenance expenses. The Seller is not obligated to make the repairs; consequently, they will have to be negotiated.

Appraisals are not a guarantee of value. Most lenders will have a disclaimer to that effect. Remember, the appraiser has a copy of your fully negotiated contract BEFORE establishing the appraisal value. It is more of a confirmation of value.

If you want more information on mortgages and the mortgage process go to my website www.russravary.com

Michigan foreclosures

2007-06-19T05:21:00.000-07:00

A Buy in Bank Foreclosures?

Everybody watches late night TV and sees the infomercials on how people made millions buying bank foreclosures. Can you do it? It is possible but banks have closed many of the loopholes in the lending process.

Michigan foreclosures. Let me explain what happens in the foreclosure process in Michigan. A homeowner falls 3 or more payments behind on the mortgage. The bank then sends them a letter that they are going to start foreclosure proceedings against the homeowner. Sometimes the banks are very quick to get a letter out and start the foreclosure proceedings. Other times some banks take months to get the foreclosure process started.

Then it is usually turned over to a foreclosure attorney to handle. The house is then scheduled to be sold at “ sheriff sale”. The home is auctioned off. Unfortunately many people think you can steal the homes at the sale. There are deals there at the sale but you have to do the research on the homes and their value. But what usually happens is the bank will buy the home back. The reason they do this is because they have a mortgage on it. Let’s say the house is worth $120,000 and the homeowners owe $100,000 on a mortgage. The bank will buy it back up to the $100,000 to recover their costs and to get the other possible liens off the home. You could buy it for $101,000 or more and the bank would probably let you buy it.

If the mortgage was $90,000 then the bank would bid up to $90,000 to keep their interest in the property. So up to this point the only way you can get a deal on the property is to out bid other buyers on a home.

Now the bank owns the home. The original owners may still be living in the home. They have up to 6 months to pay the bank the full amount to keep the home. This seldom happens.

The bank usually waits for the six month redemption period to lapse. They then contact 3 different real estate agents. The bank will ask the realtor to give them a price that the house should sell for. The bank is asking the realtor for a price, that price usually is fair market value in the eyes of the realtor. So that foreclosed home is no deal. It is around fair market value. The bank then hires a realtor to change locks, winterize the home, clean carpets, and if necessary get the home in saleable condition.

So the bottom line is that the bank is trying to recover what they are owed on the house or get fair market value. So most homes that are foreclosed are not great deals. Though there are some fixer uppers that may be deals. Ask your real estate agents to look for them. There also are HUD foreclosures that go through a little different process. There may be deals in them. I will be talking about them in another section.

The key to buying homes cheaply is to know values of the neighborhood and city and look for fixer uppers or homes below market value. Search Michigan Homes.

If you need a realtor to help you look go to my website www.russravary.com

Happy house hunting

Russ Ravary

Pros and cons of home ownership

2007-05-31T02:38:00.000-07:00

PRO
A Place to Call Your Own Perhaps you are ready to settle down in your community and want to have the feeling of permanence and involvement that comes with owning your own home. Maybe you need more space for your family. Or maybe you want more freedom than you currently have as a renter to change your home to suit your individual taste and needs.

CON
Financial trouble from illness or loss of a job: When you own a home and fail to keep up with your mortgage payments, the mortgage lender could call the loan, which means payment in full or foreclose on the mortgage. This could result in the loss of your home as well as the equity you've built. A renter, on the other hand, can downsize to a cheaper apartment to cut expenses

PRO
Another interesting thing is when you own a home, your credit rating goes up a lot as well, thus you are able to get better loans at a lower interest rate.

CON
Your home loan needs to be paid on time and so is your home insurance. Therefore, it can take a toll on your financial commitments. So be sure to plan your home loan payments properly. Though there are various tax rebates and deductibles when owning a home, you still need to pay property tax each year.

PRO
Scheduled Savings When you are a homeowner, your monthly mortgage payments serve as a type of savings plan. Over time you will accumulate what lenders call "equity," an ownership interest in your house that you may be able to borrow against or convert to cash by selling the house. On the other hand, renters continually pay rent to a landlord for as long as they rent without the opportunity to build up equity.

CON
You are also liable for any damage that is caused to your neighbor´s property if the cause comes from you or your property. An example would be a fire breaking out from your home and spreading to your neighbor´s homes damaging their properties. In this instance, you are liable to pay for the damages caused.

PRO
Retirement Savings: Long-term home ownership can provide beneficial retirement security through the growth of equity.

CON
There are no guarantees: Even if you work hard at maintaining your home, property values can drop, depending on the neighborhood in which you live. This is why it's important to choose a house and neighborhood that have strengthening value in the real estate market.

PRO
Stable Housing Costs While rents typically increase year after year, the principal and interest portion of most mortgage payments remains unchanged for the entire repayment period. Because of the effect of inflation, you pay the same amount with ever "cheaper" dollars.

CON
Repair and Maintenance. Don't forget that responsibilities such as mowing the lawn and taking care of needed repairs come along with home ownership. Actually, the promise of getting the advantages of home ownership without the accompanying repair and maintenance responsibilities is a major factor in the popularity of condominiums. As an owner, you must pay for any unexpected costs such as a new roof or heating system. This is why a family budget and a savings strategy are important

PRO
Tax Benefits Homeowners are eligible for significant tax advantages that are not available to renters. Most important, the interest paid on your home mortgage usually is tax deductible and therefore can save you a substantial amount each year in federal income taxes. There may be tax deductions for improvements you do to the home. Check with your CPA or tax preparer as tax deductions change often.

CON
High Costs Usually you can expect to pay more for housing as a homeowner than you did as a renter, especially for the first few years. Even if your mortgage payments are less than your previous rent payments, as a homeowner you must also pay property taxes, homeowners insurance, all utilities, and upkeep expenses.

PRO
Increased Value Houses typically increase in value over time. It's not unusual for a house that sold fifteen years ago to be valued at much more than its selling price today. This increased value is as good as money in the bank to the homeowner.

CON
There are some disadvantages to owning a home. For example, you are liable for any accidents and injuries on your property. Getting a home insurance policy covering such cases can offset this. However, there is a cost involved.

PRO
Once an owner, always an owner: A first home often leads to a better second home. Owning and properly maintaining the property also offers a sense of accomplishment.

PRO
A home is yours forever. As long as you can afford the mortgage and taxes, you don't ever have to move. There's no landlord to terminate your lease, raise your rent or deny you permission to make changes to the property.

My bottom-line advice: Buying a home I believe is a good investment because it is yours. It forces you to save and build for your future. Sure you could rent cheaper but you live by somebody Else's rules. So when you buy don't over-invest in your home, either when you buy it or when you make subsequent improvements. Buy only as much house as you need. Plan to stay a long time. Don't view your home as your primary retirement savings. You home will bring you many memories, long term stability, and a sense of pride. Whether you own a home in Livingston County, Wayne County, Washtenaw County, Oakland County, or Macomb County it is a start towards your future. Search for Livonia houses for sale, Novi houses for sale or any Michigan homes for sale.
For more mortgage and real estate information go to my website www.russravary.com

I also have a great Michigan things to do section for lots of fun things to do in Michigan.

May life treat you and your family well this weekend.

Russ Ravary

First time home buyer

2007-05-26T05:47:00.000-07:00

Buying your first home can be scary, but if you follow these tips, you will do just fine! Many young people do not realize that they can afford a home, they can get approved for a mortgage. Sometimes you need little or no money to buy a home. There are Government programs for first time homebuyers (FHA) and there are 100%, no money down programs.

The key is to plan ahead. You may need to repair your credit, save for a down payment, get more time on a job, save for closing costs. You need to know what you have to do to get started. You may be one of the "great buyers" and have everything you need to get started right now and not know it!Many times you do not need money. We can ask the seller to pay your closing costs. There are many programs that offer low rates and no money. 100% financing may be the way to go for you. But taking the first step and seeing what you need to do now is important. It will make the home buying process so easy. Call me to set up an appointment to go over your credit report, and credit scores.
You may have imperfect credit, have to much debt, or improve your credit scores. The key is to get started. Even though you may have bruised credit, or too much credit I have helped many people improve their credit. They then we able to buy homes.
Create Your "Wishlist"Make your wish list. Focus on the features you want in a home: 2 bedrooms or 3? 1 bath or 2? Garage or no garage? Knowing what you're looking for will help you focus your search. And it will help your local Wayne County real estate broker, too.

Search Michigan houses for sale. Think about where and why you want to buy in an area. How far to work? School? Family?Drive by, and look at many Wayne County homes (again we handle Oakland County houses for sale, Washtenaw county houses for sale, Livingston County houses for sales, as well as Wayne county houses for sale. We just use Wayne county as an example in this report). See as many possible to get a better feel for ones available in your price range. Visit my site often and search for homes. Keep track of what you like and dislike about each home that you visit by printing and using our Home Visits Worksheet.
Also consider the market value of the home, any special circumstances surrounding the sale of the home, how much you can afford to pay for the home, and the condition of the home when determining whether the home is right for you.
When you find a Wayne County home in your price range and you want to buy it, visit the Wayne County neighborhood at various times to get a more complete understanding of its activity. Talk with your prospective neighbors about what it's like to live in the area. Take a day and commute to your job from the area. And look at the home more critically -- you may discover flaws you hadn't noticed during your first visit.
Another aspect to consider is the financing you will use to purchase the home. For example, the seller may help pay closing costs such as transfer taxes or points on a mortgage. If this is the case, you may be more willing to accept the seller's asking price. Your local Wayne County real estate sales professional (Russ Ravary) can offer some assistance regarding how much you should offer, but the final decision is yours.

Mortgage fraud

2007-05-21T19:02:00.000-07:00

Today was another tough day in the mortgage world. I had a loan approved at a major lender for a 100% loan on Friday. Today PMI insurers made a change in their guidelines. They will no longer insure 100% loans when the borrowers credit score is less than 575. Unfortunately my borrowers credit score is less than 575 and now they will only loan him 95% instead of the 100% they would on Friday.
It is just another sign of how much the banks are tightening up the credit guidelines.

On another front I had a real estate agent arguing with an appraiser. They had a purchase agreement for $250,000. The appraiser could not find a comp that would support a price of over $235,000. The real estate agent was upset with that answer. When my appraiser asked her what comps she used to set a price on the house, this is what she said. Well I sold a house in that sub over a year ago for $250,000. Do you think she might have been a little smarter and realized that the housing prices in Metro Detroit are falling. (and across the country) She didn't want to tell her seller's that the house was no longer worth the $250,000 they paid for it let alone the $50,000 they put into it. The agent wanted to know if my clients had $15,000 to come to the table with. What did she think that we were stupid. Why would we buy a home that would not comp out. She wanted to use comps from over a mile away and disregard the close ones. That agent wanted my appraiser to commit appraisal fraud or mortgage fraud so she could make a commission. Shame on her!!!!

Don't let an agent do that to you. If an appraiser tells your mortgage guy that the house won't comp out to the purchase price. Either the sales price has to come down or you need to move on and find another home. The buyer's agent was smart enough to do just that. And you can too. There is absolutely no reason to overpay for a home in this market.

For more mortgage information go to http://www.russravary.com

May you work with an honest agent that looks out for your interest.
Russ Ravary

basic mortgage information

2007-05-19T18:39:00.000-07:00

How to stop renting and buy a home of your own your
Are you looking to buy but have no money,
You can buy with no money down your
Looking to re-finance click here ,
Credit & Credit Reports- How do I improve my credit score,-
Have no idea how credit scores work find out how, -
did you know best credit is unused credit, -
tell me everything about a credit report that you can-
did you know that you can get a free credit report-
how to read your credit report - by doing doing these things can hurt your credit,

Different types of Mortgages-
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what is the difference between a home equity loan and line of credit?, -
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what is the difference between a fixed rate loan and an adjustable rate mortgage?-
what is PMI? -
determine if an adjustable rate mortgage is right for you -
What types of mortgages does Global Mortgage do?
- here are different types of ARMS (adjustable rates loans) and definitions-
did you know that a forty year mortgage payment is about the same as an interest only payment ,
Thinking of buying a home and need a mortgage- Do I need to get pre-approved to buy a home? -
What are the benefits or advantages to own versus renting?-
before you raid the 401K for your down payment read this-
what's the difference between pre-approved and pre-qualified?-
Should I should I buy points to lower my rate?-
Can you explain the bi-weekly programs or how to cut the years down, -
I am thinking about taking a home equity to buy stocks, should I?-
I have had a bankruptcy and I want to buy a home

I have been in the mortgage business for seven years now. I have worked in shops that have specialized in hard to do loans, and a shop that specialized in people with good credit (we beat the banks rates and fees day in and day out) So whether you are self employed, have financial difficulties, been in bankruptcy, or have great credit I can help you out with good rates and lower closing costs. My philosophy is to do more loans at a lower price and I will get more referrals. I will make up the money but getting more loans. It has worked for me over the years. I have done over a $100 million dollars of loans for my clients over the years. What that means to you is that I have a lot of experience in doing loans for people with great credit and for people who have had credit problems. So check out what I can do for you. I am the type of person that I will not do the loan just to make money if it does not make sense for you. There are a lot of mortgage guys that will put you into a bad loan just to make money. So if you are looking for a Michigan Mortgage give me a call at (313) 310-9855 or email me at ourmortgageguy@yahoo.com.
FHA Loans General FHA Loan Information

Bankruptcy and buying a home

2007-05-13T17:06:00.000-07:00

You have been through bankruptcy and you would like to buy a home. Here are the steps you need to take to get you on the right path of good credit.
When banks look at you for credit cards and home mortgage applications they look at your credit score. You credit score is determined by many factors. One is your credit history or payment history. This is one of the key factors in determining your credit score. They look at how many times you have been late on a payment, or how many accounts you have not paid at all or went to collection. Even if it is a small payment of $15 you still need to make the payment on time. They look at how many times you have been 30 days late, 60 days late, 90 days late, and 120 days late. The more often you are late and the longer you are late will lower your credit score. If you don’t pay at all or let the account go into collection then it is even worse.
If you have ten accounts and eight of them have been late and only two are paid on time your credit score is going to be low.
So the key is to get as many accounts paid on time each and every month. Be consistent. Strive to make every payment on time. If you have come out of bankruptcy you most likely have no open credit lines. You want to get at least 2 or 3 open credit lines. If you have to get a secured credit card. Go to http://www.russravary.com/ and go to the site map and see secured credit card in the credit section for more info on secured credit cards.
What do you mean get more credit after coming out of bankruptcy? You have to have credit in this world to get ahead. The secret is learning to live within your means and to use credit sparingly. You must have a credit history to buy a house. So you must learn must learn to use credit correctly. And you must have open credit lines. Learn to use credit cards to buy necessities such as gas or food and be sure to put the money aside and pay the bill on time each and every month.
That is number one to get at least one open line of credit open immediately. The longer you have the open line paid consistently on time the better the lender likes you. Over time you need to get 2 –3 open lines of credit.
The number two step is if you are renting is to pay your rent out of your checking account. If you do not have a checking account get one opened and pay your rent out the account every month. You need to be able to prove to the bank that you have paid it on time. Cashiers checks, money orders, and rent receipts mean nothing to the lender. They want to see a cashed check and nothing else. So remember the number one thing to do is to get at least one open line of credit started right away, make the payments on time each and every month. Pay the credit card off each month. This will get you started on the path to home ownership.
Remember live within your means, have some extra savings and that will help you buy a home and keep it with out going into foreclosure.
Russ Ravary

Why so much interest?

2007-04-30T19:31:00.000-07:00

Why is my payoff higher (what I owe to the bank) than my last months statement balance?

Did you know when you pay May's mortgage payment you are actually paying the interest for April. So when you send in your May payment it pays from April 1 to April 30th. It is one of the few things you buy in life where you are not paying up front.

But don't worry the bank always gets their full amount. When you sell or refinance, the bank gets all of their interest at the end. Let's say you are refinancing your mortgage and you are closing on May 9th. Let's assume you already made the May payment. You still owe 9 more days of interest on the loan. So they will prorate the interest for 9 days. So lets say the balance as of May 1 was $195,000 and your interest rate was 5 .375% (I must of gotten you that rate during the refi boom... it is such a good rate for a 30 year fixed)

So $195,000 X .05375 (interest rate) = $10,481.25 (interest you would pay this year)
S0 take the $10,481.25 divide it by 365 days in a year = $28.71 (interest you pay per day)
Then $28.71 X the 9 days(when you close on May 9) = $258.44
258.44 + (the balance on May 1) $195,000 = $195,258.44 That's what your payoff would be to the bank.

The lender always gets their money. There is no way around it if you are selling your home, or refinancing. They get every penny to the last day.

So remember when you make this months payment it is actually for last months interest.

Any questions go to my website www.russravary.com and email me. Or get my phone number from my website and give me a call. Lots of good mortgage and real estate information there.

I hope that if somebody in your family has cancer may it go in remission.

Russ Ravary

Plan your mortgage

2007-04-28T07:33:00.000-07:00

Well foreclosures were up 47% in March. Don't let that happen to you. If you are just planning to buy a home. Be one of the smart ones. Just because somebody will allow you to borrow 50% of your income doesn't mean you should.

50% of your income to go towards your house payment is too much. You are going to be house poor. You want to be in the 35% range. The only reason you should be stretched out that far is that you are going to get big raises in the next few years. Or you are a young professional like a doctor and you know for sure your income is going to rise dramatically.

28-38% used to be the range that banks would loan you. The banks like you to have reserves (savings). Do you have savings in the bank? Do you have 6 months to a year of savings to pay all your bills? For example do you have enough to pay all your credit card bills, car payments, cell phone bills, utility bills and house payments and taxes.

The good borrowers do, they have back up so they can pay their bills even in bad times. That's how they keep their good credit rating. I'm not saying you shouldn't buy a house if you don't have that much saved. What I am saying is that is what you want to strive for. Live within your means, feel relaxed, be able to take vacations, be able to help your kids through college, be ok if your have medical problems in life. You don't want to be that Walmart greeter. Sure it is ok to be the Walmart greeter at 70 years old because you want something to do, but it is a whole different thing to have to go to work so you can afford your house payment or be able to eat.

Too many people want the big beautiful house and the fancy cars. But think how embarrassed you would be to tell your family and friends that you lost your house in foreclosure. Be one of the smart ones in life. Once you start on this path you will be glad you did.

So when you are out shopping for a mortgage, don't ask how of a house can I buy. Instead figure out yourself what payment can you afford comfortably. Then ask your mortgage professional the interest rate and how big of a house that payment can buy.

May unexpected money come your way this week. For more mortgage information and Michigan real estate information go to www.russravary.com

Russ Ravary
"your real estate and mortgage specialist"

PMI mortgage insurance

2007-04-25T16:07:00.000-07:00

What is PMI and why do you have to have it?

PMI is Private Mortgage Insurance. It is insurance that a lender or bank makes you get when you borrow over 80% of the value of the home. The more you borrow over 80 % the bigger the risk you are. So the bank makes you take insurance out to cover their risk.

The more you borrow the higher the PMI. Different banks determine PMI differently based on the type of loan, the length of the loan, and the percentage of loan as compared to the purchase price of the home. This is called LTV ( loan to value). If you borrow 95% as compared to 85% the PMI is going to be higher on the 95% because you are a bigger risk.

The only way you can get rid of PMI after you get it is to refinance out of it or pay your principal balance down on the loan to 78%. You cannot get an appraisal showing that the value of the home went up. (Even if the amount you owe is only 78% of the market value of the home). The only exception to this is if you did capital improvements to the home such as an addition. Then you have to document the improvements and get an appraisal done. Many times the bank requires you to use their appraiser or an appraiser on their approved list. So you are going to have PMI for at least 5-10 years usually.

So before you get a loan with PMI look at all your options. Some banks and lenders offer a loan with a higher interest rate where the PMI is built into the price. (There is no actual PMI but you are paying a higher interest rate). Or you can split your loan into 2 parts. You can do an 80% loan and then do a 2nd mortgage for the rest.

Let’s say that you want to borrow 95% on a purchase price of a $200,000 home.
You would be borrowing $190,000 total. You would split the loan into an 80% 1st mortgage of $160,000 and a 2nd mortgage of $30,000. You are still borrowing the same amount but split into two loans. The first mortgage is usually at a good rate and the 2nd mortgage is at a slightly higher rate.

When you borrow over 80% of the value of the home (or purchase price). You have three choices.
1) One loan with PMI
2) One loan with a higher rate that basically has the PMI built into the rate
3) Two loans. A first mortgage and then a 2nd mortgage with a slightly higher rate.

PMI is usually not tax deductible but in 2007 it was. It will be up to the law makers on how long it will stay tax deductible.
The bottom line is that you need to have your mortgage person (i.e. Russ Ravary) run the scenarios for all three. The one with the least expensive payment is usually the way you want to go. That is if PMI is still tax deductible, the lengths of the loans are the same, and the rates are fixed. (sometimes the rates on the seconds can be variable, be sure it is a fixed rate)

If you want more information on mortgages go to my website Michigan mortgages www.russravary.com. To to search Michigan homes in the privacy of your home at your convenience go to www.russravary.com

May your work week fly by and your weekend seem to last forever.
Russ Ravary
"your one stop mortgage and real estate specialist"

Time to start saving

2007-04-18T19:03:00.000-07:00

I'm a big cheerleader for new home buyers to try to save money before they buy a home. I want you to be able to afford the home. I want you not to go into foreclosure.

In the past few years to many people bought homes with no money down and no savings in the bank. Hello, home ownership takes money!!!!! What happens if the furnace breaks down, or the roof leaks. Where are you going to get the money? Homes cost a lot of money. Ask anybody. All homes are money pits. You can throw all the money in the world into a home and it will disappear.

Mulch the flower beds, put flowers in, change a light fixture, fix the running toilet, or the dripping faucet. All of these things are going to cost you $25.00 just to get you started. If you lived in an apartment or with Mom and Dad you complained to management and it was eventually fixed.(Maybe) Well now it is up to you to get it done. You may be able to fix it yourself, or with a friend's help, but you may have to pay to have it fixed. You need money, not the VISA card. You don't want to bury yourself in debt. You might even have to buy the tools to fix the problem.

Do yourself a favor. Save 2 or 3 months of your projected mortgage payment with taxes and insurance as a back up. They had a word for it "a rainy day fund" It's not new but many people in foreclosure never had one or bothered to think about it. There is no reason to lose your house if you plan ahead. (Unless you have health problems and or unable to work)

I would rather not have your business today if you have the ability and foresight to save your money for a safety net. There is lots of good homes out there at a reasonable price. Homes are not going up in price in the near future. Save your money, get a good deal on a home. You'll thank yourself later as some of your friends, family, or co-workers are losing their houses.

If you have questions on what a home payment will be contact me at my website www.russravary.com I will be glad to figure out your mortgage payment and what it will cost you to get into a home.

If your troubles seem insurmountable ask a friend or loved one to help you solve them.
Russ Ravary

My rate is going up what do you do?

2007-04-16T05:29:00.000-07:00

If you just received a letter in the last few months informing you that your interest rate is going up then you don't want to wait. Call your local mortgage person, or myself www.russravary.com and start checking into it. You should never give out your social security number to more than 2 or 3 lenders. Preferably you want to meet them in person.

If you have your credit run by more than 2 or 3 lenders you have a chance of your credit score dropping. Your credit score drops because there is too many inquiries. It signals that you are getting more credit. It drops because it is an unknown. How much credit do you apply for. If you applied to four different credit card companies for 4 different cards of $10,000 each and you ran them up. Then you are a credit risk. The credit bureaus have no way of telling what you are doing. So they lower your score until they know. They don't know if you have been turned down, if you are shopping for a good rate, are in trouble financially, or what.

Find out if you can refinance and fix your rate. Go over the different scenarios with the lender.

May this week bring you good news.
Russ Ravary "your friend and mortgage consultant for life"

Millage Rates in Michigan

2007-04-13T04:05:00.000-07:00

Here is more on millage rates in Michigan.
The first year you are taxed on the SEV value and then from then on you are taxed on the taxable value. Taxable value can rise up to 5% or inflation which ever is less. But remember inflation on the house can be negative so sometimes taxable value and SEV can go down.

In a market where property values are rising SEV becomes less and less important to you after the first year because the taxable value should be less than the SEV. Usually when you are buying a house you will notice that if somebody has lived in the house a long time the taxable value is much lower than the SEV. That is because of Proposal A limits the increase in taxes per year. The estimated market value according to the state has risen faster than the taxable value. Proposal A saved us money!

However if values fall as they are now the assessor should lower the SEV. (they should but they don’t always do it because the city loses tax revenues). Let’s say you bought it for $300,000 in 2005, then the SEV is $150,000 in 2005. The assessor may say that the house is now worth 145,800 now so your taxes will go down in 2006. So let’s say you bought the home in 2005 at the peak of the housing market. Now two years later your house is worth less. It should reflect that in your SEV and taxable value. They both should have gone down.

The way you have to fight it is first get your facts. You need houses that have sold in the neighborhood and in the city that are comparable to yours. I.E. roughly same square footage, roughly same age, same style. They need to have sold for less than what your bought yours for and what your taxable value is. You need more than one house to support your claim. The more houses you have and the closer they are to your home the better chance you have of getting the assessor to agree with you and reduce your taxable value. Then you have to call the assessor’s office and find out the procedure to protest your taxes. Sometimes you can only do it once a year, sometimes you have to put it in writing, sometimes you have to go in front of a board.

It is worth the hassle! It will save you money for years to come when you get it corrected.
Want to figure out what your taxes are going to be? Here is the formula :

Value determined by assessor divided in half = SEV (State equalized value)

SEV X Millage rate = taxes

For example a you are buying a $400,000 house in Brighton. Let's say the SEV by coincidence corresponds to the purchase price. So the assessor estimated the house value at $400,000 too. So $400,000 X 50% = $200,000. So SEV is $200,000

$200,000 X .0361558 = $7,231.16 a year in taxes.

Two things to remember SEV can be less or more than the purchase price of the home or the offer that you are going to put in. But you are most likely going to pay based on the SEV unless you fight it with the tax board or assessor after you move in ( usually when you get your tax bill).

Remember this is only for homesteaded taxes. A homestead exemption, now known as a principal residence exemption may be used by a person who owns and occupies a home as their principal residence. If this is true, the person may claim an exemption from the 18 mills levied by local school districts for operating purposes. Again in English - Homesteaded taxes are a reduction in taxes based on that you use a home for your primary residence.

So Non-homesteaded taxes are on vacation homes, rental properties, and investment properties.

If you are not living there full time, you can not claim it. You cannot claim one house, and your wife, claim another. If you claim a homestead in another state you can not claim it here. If you try to cheat the state and they catch they can take away the homestead deduction on all your homes and make you pay back the taxes you should have been paying and penalty interest.

If you wish to search Michigan Homes or need more information on mortgages or real estate in Michigan go to my website http://www.russravary.com/
I hope this information on millage rates helped you. Russ Ravary

Michigan millage rates

2007-04-11T04:26:00.000-07:00

People are generally confused when they get their tax statements or trying to figure out millage rates. I even have to explain it to real estate agents in the office.

Millage rates are different for each city and even different within that city because of different school systems inside that city. For example Dearborn Heights has six different school systems inside the city. So according to what city you live in, where you live within that city, and what school system your kids will go to will determine your millage rate. Canton has one school system and one millage rate, Brighton Township has 3, Livonia has 2.

There is a winter millage rate and a summer millage rate. They usually call winter taxes city taxes and summer taxes county taxes. There are different assessments on your property that add up to your winter and summer rate. For example a portion goes to the county (for the different county projects and maintenance of county buildings and roads). A portion goes to the school system, some may go to the library, some may go to roads, some may go to different projects the city is funding, etc, etc…. Remember when you voted last time and you voted for or against a tax increase for the schools. Well that would have increased the millage rate. To impose a higher rate some of them are voted on, some do not have to be voted on.

There are 2 numbers you need to know when figuring out your taxes. One is SEV, which means state equalized value. The state estimates what your house is worth. SEV is normally determined by your city or township assessor. It is 50% of what they believe the house is worth. For example if the assessor thought your house is worth $250,000 then your SEV will be 125,000 ( I will get into how to fight a bad SEV)

The second is taxable value. Proposal A of 1994 changed the way taxes were determined. Instead of increasing taxes based on 50% of actual cash value, commonly referred as SEV (state equalized value) now after the first year you buy a property taxes are based on taxable value. If a property is not acquired during that tax year then the increases in taxable value are limited to the lesser of five percent or inflation. So boiling that down in English the first year you buy a home the taxes are based on SEV. The second year the taxable value is SEV plus the lesser of five percent or inflation. The first year you are taxed on the SEV value and then from then one you are taxed on the taxable value. More on Millage rates next time. To see what your Wayne county millage rates, Oakland county millage rates, Livingston county millage rates is go www.russravary.com

I will continue on about millage rates and determing them in my next blog.

If you just want to search Wayne county homes, or search Livingston county home, or search Oakland county homes then it is easy and free on my site with no log ins or information requested from you. Surf for homes when ever and where ever you want.
May lady luck be with you today!
Russ Ravary

FHA Mortgages

2007-04-07T15:41:00.000-07:00

I believe a FHA Mortgage is great for most first time home buyers that do not have 5% or more to put down. The reason I say this is that they allow people with past bruised credit to buy a home. They allow people with limited credit history to buy a home. They allow you to buy a home with very little down and allow the seller to pay closing costs. And the best reason a FHA mortgage is great is that the rates are good. You are not usually going to pay an exorbitant rate!
FHA is home buyers program that allows you to get a good rate if you had bad credit in the past. FHA usually wants you to have good credit for the past year. FHA loans are sometimes the stepping stone between bad credit and excellent credit.
If you are thinking of buying a home whether it is the first time or you have bought homes before I would ask your mortgage person about them. It may be the way for you to go and get into a home at a great rate. Visit my Michigan mortgage information page for more information or email me at my website http://www.russravary.com/ to see if I can get you a great rate.
Hug your children just for no reason and tell them how much you love them.
Russ Ravary

No Money Down Purchase

2007-04-03T04:10:00.000-07:00

Are you thinking of buying a home but you have no money to put down? There are still no money down mortgages. What that means to you is that you can actually still buy a home and not have any money in the bank or need money for closing. And it is perfectly legal!!! The banks will lend you the money at a higher interest rate (not much higher than normal).
The banks categorize you, the new home buyer as a higher risk since you do not have money, so they charge a little more. You will have to have good credit in this market to get a 100% financing loan.
Do you know what closing costs are? There are fees associated with closing on a home. You have to pay the seller of the home back for taxes he paid in advance, you have to pay for an appraisal, bank fees, and title costs. Depending what state you are closing in those costs can range from $1500 -$3000. But don't worry those costs can be covered too if you have a good real estate agent. Your real estate agent can put in the purchase agreement that the seller will pay 3% of the selling price towards your closing costs. You can actually buy a home with no money what so ever!!!
However it is better to put money down to buy a house. You will get a better rate, and most of all you will truly feel home ownership because you have something invested. You can get an FHA mortgage with only 3% down! I will go into that in my next blog.
If you are interested in finding out whether you qualify to buy a home, go to my web site on Oakland County Homes www.russravary.com You can email me from the site or fill out one of the many forms for information.
Also if you want to Search for Michigan homes free go to the site. Or click on search for Michigan homes free.
Drive safely and if you break a traffic law by accident may there be no policeman around to give you a ticket! Russ Ravary

Buying floreclosures

2007-03-29T09:35:00.000-07:00

I am picking up where I left off on my last post. To reiterate a point. Just because it was a foreclosure does not make it a deal.
Your real estate agent should be doing some leg work for you. If you like the house then they should be telling you what other homes in the area are selling for. He may be able to tell when it was last sold, how much of a mortgage is on it, and how long it has been on the market.
All this information should be helping you to determine how much to bid on the house.
Banks want to get it sold but they don't necessarily want to give it away. Remember you are buying it as is. The bank is not going to do anything or fix anything (most likely).
I always tell clients to put in a purchase offer in with a price you can live with. On one end. I have had agents tell me that their clients have told them. "why hasn't anybody put even a low ball bid in on my house?" Then when we did put in a low ball bid they only come back with a 4% lower counteroffer. In this market it is not that great. If you are shopping for a bargain then it should be 10% plus in this market.
On the other end we have put in a 12% below market bid and it is accepted without a counteroffer. The sellers had a bigger mortgage than that. They just wanted to get out of the house.
Signs to look for when looking for a deal: empty house, low mortgage on home, house on market a long time, people have relocated, people are getting divorced. Check the house value against what has sold in the six months (not a year). Good luck and happy hunting. Search Michigan Homes free on my website www.russravary.com Russ Ravary

Are you selling or aren't you?

2007-03-29T08:57:00.000-07:00

My pet peeve of the week is sellers who won't let people in. Last weekend we set it up an appointment through another real estate office. We showed up at the house and the seller told us we could not come in. She wanted to know if 3 days from then would be okay!!! Duh. The seller just got the buyer mad and they are not coming back to look at that house. She supposedly does not empty her messages off the answering machine to know when the appointments are scheduled. Not the smartest seller in the world.
I have two more. Another one we called to see tomorrow they said how about next week towards the end of the week. This was a lease. The people need to move. They will be looking elsewhere.
Another one we called to see tomorrow (a different buyer and seller) the seller said not tommorrow but how about Sat between 12-1 or Sun 4-5. 3 days later again and to at thier convenience.
If you are going to sell your house make a committment to yourself and let it be shown whenever possible. It is a slow market you can't afford to let a buyer go by. There are some houses that are not getting lookers but once a month. I can understand if you have out of town guests, birthday party, a child sick, but let your agent show it as much as he can. Even if it short notice, even if it is not perfect.
I sold one house this way. Another agent was in front of my buyers house and called me. They wanted to get in right then. They liked the looks of the house. I called my buyer. He ranted and raved about no notice. I told him to quickly make the bed and apologize to the prospective buyer on how it was not totally cleaned up. That buyer bought the house. They put in a bid that night!!!
If you are thinking of selling your home. Don't let the buyer get away. Don't let the buyer get away. Don't let the buyer get away.
They are far and few between right now. They will put your house on the back burner like you did them. There are so many houses on the market to look at. Make it available. Make it easy to show all the time. I know it is work to keep it clean and pretty. But if you truly want to move and sell the house then you might have to pack up the kids, the dog and run out of the house. Go to my website and do one of the March things to do in Michigan. If you want to search for Michigan Homes go to my website www.russravary.com

Foreclosures in Michigan

2007-03-27T16:30:00.000-07:00

Good News Florida is number 1 in foreclosures. We are not the only state hurting with slow sales. One nationwide builder in Florida was 85% down from last year. That is a big number.

So you say, what about buying foreclosures. Is it a good time to buy a foreclosure? Let me explain the process of foreclosures in Michigan. First the homeowners miss 3 or more payments on their house. The bank may send them a letter right away stating they need to pay up or they are going to start foreclosure proceedings. Then it takes anywhere from 2 months to a year before the bank turns it over to attorneys and schedule a sheriff sale.

A sheriff sale is where the house is auctioned off to pay off the bank. It is usually held near the county building where the home is located. They send notices out and post it in the paper. When the house is auctioned off anybody can bid. The bottom line is that the bank will usually be the high bidder especially in this market. They have to buy the home back for at least at the price of the mortgage. So if the house was worth $200,000 and they had a mortgage of $190,000. The bank is not going to let it be sold for $100,000 or any low price. They will just buy it back.

In this market they may let you have it at $170,000 or $180,000. Maybe. But most of the time they will buy it back and then list it with real estate agents. The only time it is a good deal is if they have a low mortgage balance versus what the house is worth. But that does not happen very often because there are a few lenders that will loan 60 - 70% even if you are in foreclosure. They scoop up the house if you default again with only a 60% mortgage. They have done good.

So many of the houses have mortgages of over 70% on them. Lately many of them aren't worth the amount of mortgage on them. So it isn't a great deal to buy them at Sheriff sale. You must know what the house is worth for the condition it is in before you put in a bid. You are bidding blind because you can't get into the house to look around. The people who have defaulted on the mortgage are most likely living there. They have been living there rent free because the bank won't (most of the time) take any thing but the full past due amount. But there are times that there are deals at sheriff sale. You just have to be an educated buyer and know what is a good deal.

That comes to the next point. Even if you win the sheriff sale the people who have defaulted have six months to come up with the money to pay off the bank. That very seldom happens. If they haven't paid it up to this point they don't have the money. After six months you get to move in. They will be evicted at the end of the six month redemption period.

Now the bank has it back. I will tell you what they do next in my next post. If you want to search Michigan homes go to my website www.russravary.com and search homes free.

May tomorrows plans come off without a hitch for you. Russ Ravary

Upside down in a Michigan home

2007-03-25T17:40:00.000-07:00

What do you do if you are upside in a home?. What do I mean by being upside down?
With Michigan's economy and housing market we are seeing more and more people in this predicament. What has happen is that your house value has fallen below what you owe on the mortgage.
Upside down means that you owe more on the house than the house is worth. It does not mean anything if you are staying in the home and you can afford the mortgage payment. You just have to ride out our poor housing market and continue to pay down the mortgage.
The problem is if your payment is going to rise beyond what you can afford or you have to relocate. Or if you can't keep up and you are going into foreclosure. Then you have a problem. First you need to contact the bank and try to work something out with them. Either a lower payment or giving the home back to the bank(They call it deed in lieu of foreclosure) you are giving the house back to the bank and moving out right away. If you truly have financial problems the bank will try to work with you. However there are some banks out there that are hard noses.
If you can't work out something with the bank then you need to consult with a bankruptcy lawyer next.
The last choice if nothing else works out if that you may have walk away from the house. If you can't sell it, you can't afford the payment, you have to move to get a job, you can't work out a deal with the bank, you can't file bankruptcy, then you may have to walk away from the house. If you want to talk about your options go to my website and contact me. I'll try to help you on what to say to the bank. Or to see if you have any options. www.russravary.com
If you are upside down and are staying the house start paying a little extra each month to lower the mortgage balance. Do you know if you make one extra payment a year on a 30 year mortgage that you will cut it down to about 22 years. Even a little bit each month helps. Good luck and have a great week.

Rates holding steady

2007-03-22T06:11:00.001-07:00

With Michigan economy slowed down, our interest rates are holding steady. For a thirty year fixed they are hovering around the 6% mark, which is an excellent rate considering 10 - 20 years ago they were are high as 8-10%.

I keep telling everybody if you don't have to sell don't. It is not a market that you can put your house out there and hope somebody will pay top dollar. It's a buyer's market here in Detroit. You can search Michigan Homes and find good deals out there.
The only reason you want to put your home up for sale is because you are relocating, you can't afford the payment, you are getting divorced, it is in estate. Or if you are moving up into a bigger house. You are not going to make as much as you would have on the sale of your house two years ago. But you will gain some much value on a bigger home.
Here is the big but - please do not stretch yourself into a variable rate or a negative amortization loan in order to buy a bigger home. If your loan is called an option arm, balloon mortgage, arm, smart choice loan, adjustable rate mortgage, pick a payment loan and you are pushing you monetary limits to get into the house....... You are doing the wrong thing to your self. What happens when the rate goes up, what happens when the balance of the loan goes up?
Houses in Michigan are not gaining in value. I am noticing even in the expired listings each day that about 25% of the home listed are owned by banks. I don't want you to get into that problem. I want you to buy a home, to be able to afford it, to be able to live a good life beyond being house poor. I want you to be able to say that was a good move 5-10 years from now while living in the house. I don't want to add stress in your life of you going into foreclosure.

For more mortgage information or Michigan real estate information go to my website www.russravary.com If have a great Michigan things to do section and a great Michigan things to do section by month.

"Life comes by you only once. Today will be gone forever soon. Enjoy it, thank a friend for their friendship and help, and forget about the little problems" Have a great day. Russ Ravary

Rates holding steady

2007-03-22T06:11:00.000-07:00

New home buyer

2007-03-19T06:13:00.000-07:00

Are you a first time home buyer? Do you want to get pre-approved? Don't know if you can qualify for a home.
Lenders look at your credit score ( which means your credit history) How many open lines of credit do you have? Do you have a credit card? A car loan? A student loan? Those all show up on your credit report. Even if you are just an authorized user on somebody Else's credit card it shows up.
If you do not have any of those. Then FHA and some banks use rental history, cell phone bills, car insurance bills, utility bills. So if you are thinking of buying a home get the bills in your name if you are paying them. Be sure to pay by check and not money orders or cash.
Just because you never thought you could get a home, you may be pleasantly surprised. Sometimes it is very easy to get a loan even if you are self employed, just out of college, or don't have much money. I always tell young people to start saving money. It helps when you move into the house and you need to buy something. A safety cushion if something breaks or go wrong. If you think you can afford a certain payment, let say $1000 a month. If you only are paying $700 in rent then put the extra $300 away each month. Can you live comfortably? Save that money for a down payment or a rainy day fund.
Thinking of buying and want to see some listings of what you want. Go to my dream home finder and put in your wants. If you just want to surf the net and check out home listings and photos go to Search Michigan homes free. Or if you have to sell your home first go and find out your home's value. Go to www.russravary.com if you want to get pre-approved today.
Ready for a good burger go to Miller's Bar in Dearborn on Michigan ave just east of Telegraph, or try The Redcoat Tavern in Royal Oak at 3808 Woodward. Or for a brew pub go to Leopold Brothers Brewery in Ann Arbor or Thunder Bay Brewery in Auburn Hills. Have a great day.
Russ Ravary

Second Mortgage Rates

2007-03-17T19:39:00.000-07:00

I'm a loan officer at a mortgage broker. We usually can get better deals than a bank can give you. But on second mortgages I tell people to shop the big banks and credit unions. They usually have the best rates and lowest closing costs for second mortgages. When you are shoping for a second mortgage you want to find out what the rate is, is it fixed or variable, is it a home equity line of credit, and how are the closing costs are. Usually you want to go with the lowest closing costs and the lowest rate. Also ask if you can lock the rate later on.
Second mortgage rates usually depend on how much you are borrowing (including the first and second loan amounts) compared to how much you house is worth. If you are only borrowing 70% of what your house is worth the rate will be cheaper than if you were borrowing 90% of what your house is worth. It is a bigger risk for the bank to loan you 90% of the house versus 70% loan. That is why they charge more for the higher risk.
If you want more information on mortgages or would like to apply for a mortgage go www.russravary.com We can help you get pre-approved for a mortgage and start searching for a home. Have a great St. Patricks Day.. May the luck of the Irish be with you all year Russ Ravary

Financial Risk

2007-03-15T12:22:00.000-07:00

I had a fellow mortgage person tell me that a deal we did last year was in foreclosure.
The client worked at Ford Motor at one of the plants and got laid off. He had put on an addition. The client didn't know he was going to get laid off that I know of. I feel bad for this guy. I feel bad for his family. I know how tough it is out there. The construction industry is way down, friends of mine are working 1 and 2 days a week if that. The real estate industry is slow with houses being on the market sometimes over a year. Pfizer, GM, Ford, and Chrysler are all downsizing here in Detroit.
The bottom line is before you consolidate debt into a loan, fix the house up, or put an addition tread carefully. Find out what your house is worth. Is your house worth the money to add on or to update at this time? What would happen if you had to sell right now? Could you even sell your house for what it is worth? What would happen if you lost your job could you survive with the added payments?
The economy is Detroit is tough right now. It's time to make the right financial choice's for you and your family. Don't let some smooth talking loan officer talk you into a negative amortization loan unless you have no other choice and you have to lower the payment or loose the house. If you can't survive in these tough times, it buys you some time in the house.
I have seen some financial planners pitch this product to their clients because they make a lot of money off of it. (Some of their clients should have never even been asked, but the financial planner was looking out for himself more that the client) Some of the other names for a negative amortization loan is pick a payment loan, 4 choice loan, smart choice loan. It is a way of giving you 4 choices on which payment to make each month. Unfortunately the cheapest choice is actually adding principal onto your mortgage balance each month. All of us want the cheapest payment right. Unfortunately it becomes a nightmare for the homeowner later on because he owes so much more on the house.
If you hear 1%, or 2% or a rate so low it seems to good to be true. It is. Current rates are higher than 5 1/2 % for a 30 year fixed. (even with points) So if you hear 1, 2, or 3, 4% there is something hidden that they haven't completely told you. If the payment is different from what all the other loan officers are telling you then check into more. Feel free to pick up the phone and call me at (313) 310-9855 or go to my website www.russravary.com and email me about it, if there is a program you don't understand.
So the bottom line of this blog is don't take on any more debt, or update your house if you are worried about your job. Do the simple things like painting or updating the carpeting. Simple less expensive things that will make you feel good about your house yet not cost you a lot. For more mortgage information go to http://www.russravary.com/

Mortgage meltdown

2007-03-13T05:51:00.000-07:00

If you have been reading the newspaper or watching Good Morning America this morning. You would have heard about the mortgage meltdown. What does the mortgage meltdown really mean to the average consumer?
Let's start with why it happened. Banks, and lenders began loosening lending guidelines about 6-7 years ago. They made it easier for almost anybody to get a loan. You did not have to show employment sometimes, sometimes you did not have to verify income, and sometimes you did not even need one dime to buy a house. It was easy to get a loan even if you were self-employed, had a recent bankruptcy, or even a prior foreclosure.
The gurus in the back room thought they had figured out the projected default rate. They factored that into the interest rate. So if 10 out of a 1000 people were going to default as they guessed then they charged a little higher rate to everybody. Just like they do with credit cards. The good payers subsidize the losses of the non-payers. That is the way of business.
Well unfortunately the gurus in the back room under figured the losses. So long as the real estate market is going up all was well. The foreclosures are huge right now. Especially Michigan foreclosures, we are near the top of the list. The banks, the lenders, and investment portfolios are taking losses. Yes investment portfolios, mortgages were being bundled up and sold on wall street. They are in various mutual funds and hedge funds now. So those funds are going to lose a little value here and there.
But the major consequence of what is happening is that lenders are going out of business, there is a tightening of loan criteria. No longer can anybody just sign and get a loan. There are less choices and less programs for loan officers. Less choices for consumers. So some people that could have bought a house last year with no money down, may need money or may not even be able to get a loan. Before lenders could sell those loans on wall street, now wall street wants nothing to do with them because of all the losses. It's not profitable.
Less people on Wall Street to sell to, less companies able to stay in business, less choices and fewer easy options for Mortgages for the average consumer.
Interest Rates are going to be higher for non-conforming people. People with bruised credit, self-employed people with no verifiable income, people with no reserves are non-conforming people.
Where the biggest danger is that some of adjustable rate mortgages may rise quickly. Good Morning America was saying that you needed to be in a 30 year fixed rate mortgage if you could be. I think that is a great idea. We are near the low point of mortgage rates. Rates may come down a little but the possibility of them going up is greater.
So if you are thinking of selling to get out from under your mortgage, or just thinking of moving out of state.... you can check your houses value at www.checkmyhousesvalue.com
I always thought people should have a little reserves when they buy a home. What happens if the furnace fails or the roof leaks. Sure it's nice to buy a home, but I would like my clients to be able to afford the home. So they can be in it 5 -10 years down the road and not lose it to foreclosure. If you want more information on mortgages, want a good rate feel free to call me at (313) 310-9855 or go to my website at www.russravary.com May life treat you and your family well today. Russ Ravary

What are points? Mortgage Information

2007-03-09T20:38:00.000-08:00

If you have good credit, you should never have to pay points!!! The only reason to pay points when you have good credit is to buy discount points to get the rate down. You should know or have a general idea of what rates are. So let's say for example rates are 6% at some of the local banks and mortgage brokers. But you know you are going to stay in the house for a long time, you are a saver, and rates are pretty low. You can buy down the rate by paying 1 or 2 discount points. 1 point usually lowers the rate by a 1/4 of a percent and 2 points usually lowers the rate by 1/2 percent.
A point is one percent of the loan amount. So if your loan was $200,000, 1 point is $2,000 to lower it a 1/4 % from 6 to 5 3/4%. 2 points is $4,000 to buy the rate down 1/2 percent to 5 1/2%. The amount points buy down a rate vary from each bank or mortgage broker so be sure to check with them what the cost of the point and how much it will bring down your rate.
The reason you don't want to buy points usually is because it takes anywhere from 4 to 7 years to re coup the money from buying the points. So if you refinance or sell your house during that period you lose that savings. You just threw that money out the window. Most people refi or move during that period.
Let's continue with that example. A $200,000 30 year fixed loan at 6% will have a payment of $1199.10. If you buy that loan rate down a 1/4% you would have a $200,000 30 year fixed rate at 5 3/4% with a payment of $1167.15 that cost you $2000 to do . A savings of $31.95 a month or $11,502 saving over the life of the loan! If you minus the $2,000 cost for the point then it is $9,502 over the life of the loan. Quite substantial. But only if you stay in the loan.
To figure your breakeven point you take the cost of the point ($2,000) and divide by the savings ($31.95). $2,000 divided by $31.95 = 62.59 months. It would take you about 63 months to break even. So you would have to stay in the loan for 5 years 3 months before it is a benefit to you and you actually start saving money. For more mortgage information go to www.russravary.com May today's troubles disappear quickly for you. Russ Ravary

2007-03-07T18:38:00.000-08:00

Well the stock market has added to Michigan's woes. Many people have been slammed by falling house prices. For many people their homes were their biggest asset. Michigan home values have fallen as much as 20% in some areas. Along with their 401k and mutual funds it has struck people hard.
Now is the time to buckle down and get down to financial basics. Have you gone through your expenses lately? Do you have extra features on the phone such as call waiting, call forwarding, caller id that you could do without? Can you survive on just basic cable? Have you checked prices on your car and home insurance? A friend of mine Bill Tuccini once told me that his dad used to say " take care of the pennies the dollars will take care of themselves".
Cut up the extra credit cards and live within your means. buy what you can afford. Don't use that home equity for nothing. Change it over into a fixed loan. Start paying down your mortgage.
If you are thinking of moving go to http://www.checkmyhousesvalue.comw/ have a great day.

2007-03-02T04:34:00.000-08:00

There are millions of Adjustable Rate Mortgages and balloon mortgages that are coming due in the next year or so. Most of my clients are not in that fix. I was always a thirty year fixed or a fifteen year fixed type of guy. I was raised old school in that you pay off the mortgage.

Unfortunately many accountants, stock brokers, and investment people push clients not to pay off their mortgage for tax benefits, and hopefully investments gains. I myself like the security of knowing that my house is paid off and I owe nobody.

Do you know why mortgage people like Adjustable Rate Mortgages besides the low rates for customers? It is not all in the interest of the client. It is in the interest of the bank, or mortgage broker! If you the client gets a 3 year adjustable mortgage then the mortgage person sets himself up for repeat business in 3 years. That means if you do it every 3 years. He could refinance you 10 times and you still would never be paid off!!! Whereas a fixed person is paid off. Sure they paid more in interest but they are paid off. Plus they did not pay closing costs 10 times. 10 X $2000 in closing costs and you still owe money. It is just keeps coming back to the broker. The broker is setting up a retirement plan off of you!!!!

Then there is other problems that come with it. It is happening in Michigan right now. These are things most brokers never told you about. What happens if the value falls and you were close to 80% of the value of your home 3 years ago. Some Home Values in Michigan have plummeted as much as 20% from there highs. The average is 10 -20% in Michigan right now. That means the customer now has to pay PMI, or stay in the adjustable rate mortgage, or sell the house if they can't afford the new payment. Did your broker tell you that! If you want to check your houses value click here. It is not an appraisal but it will give you a general idea of what your house is worth. For more mortgage information, real estate information, Michigan things to do check out my website at http://www.russravary.com/

So the bottom line is that next time you get a mortgage think about the true cost.

2007-02-26T04:53:00.000-08:00

What does getting pre-approved mean to a first time home buyer? It means talking to (preferably sitting down) with a mortgage person. You want to bring your last two years tax returns or w-2's with you.
The mortgage person will ask you questions:

about how much you make a year?

where have you been living?,

are you paying rent?,

if so how by check?, by cash?,

how long you have on the job?,

how much savings you have?,

how many other bills do you have?,

how much do they add up to?,

the price range of house you would like to buy?,

how much do you want to put down?,

who is going to be on the loan?,

how big of a payment you want to have?.

They will take the time to pull your credit and look at it. The important things on your credit report is your 3 credit scores, the amount of debt you have, and your actual credit. How many lines of credit do you have, are you paying them on time, do you have any collections?
These are all things a mortgage person looks at.
But do not be scared. There are many people who think and have thought they would never qualify for a house and they own one now. Many people are approved to buy a home with little or no money down. You have to take the time to pre-approved and pre-qualified. Call me at (313) 310-9855 to get pre-approved for a mortgage or go to my website www.russravary.com

2007-02-21T12:55:00.000-08:00

What does ARM mean? ARM stands for an adjustable rate mortgage. What is usually means that you have a fixed rate for a specific period then your mortgage interest rate will adjust up or down according to the index. An ARM can be fixed for 6 months, 1,2,3,5,7 or 10 years. Usually you can figure the longer the interest rate is fixed the higher the rate. For example a 1 year arm "usually" has a lower interest rate than a 10 year ARM.
Why would anybody in there right mind choose a mortgage that might go up in the future? The reasons clients choose an adjustable rate are:
1) They want a lower payment. An adjustable rate is usually lower than a fixed rate.
2) They can buy more of a house. If the interest rate is lower on an adjustable rate mortgage, then the payment will lower. For example a buyer may be able to buy a $270,000 home with an ARM at the same payment they could buy a $250,000 home with a fixed rate. Just because of the lower interest rate on the arm.
3) They are planning to move within the time period of the fixed rate. Say a person is going to move in 2 years. They could get into a 3 or 5 year arm at a reduced rate rather than getting a 30 year fixed loans.
Many people got into 4.75% 5 year arms back in 2003. They have saved themselves a lot of money in payments. It has allowed many buyers to get into homes they could not of otherwise have afforded. It has been a great ride for them and the interest rates are still low enough that they will do okay.
The downside of arms is that rates could be much higher at the end of the fixed period. Or like the market we are in now. They houses are not appraising what they were in 2003. So if you were close to having mortgage insurance back then you might have to refinance with mortgage insurance or take a chance and stay in the loan and hope it does not go up too much. For more information on ARMS go to my website www.russravary.com

2007-02-15T13:23:00.000-08:00

When you buy an investment home or a second home in Michigan it is not Homesteaded. When you live in a house you are able to file for a "homestead exemption". What that does for you is reduces the amount of taxes by approximately 35%. Quite a savings! But if you buy a home for $200,000 to live in, and buy a home to rent to somebody for $200,000. The rental house's taxes is going to be much more expensive. The interest rate is going to be more expensive.

This is one of the many factors that you have to consider when buying an investment property. You have to know the mileage rate for the town or city that you are buying in and figure out what the taxes are going to be. You know what the payment is, what the insurance is, so you need to know what the taxes will be. I am always surprised at some of the new investors that never take this into account.

I have had calls after a year telling me that they are losing money on the house. The amount of rent is not covering the taxes, insurance, and principal payment. The owner has no way of raising the rent because then nobody would rent the place. The owner can't afford to fix the place because he is losing money. It is a loss all the way around.

Before you become an investor with rental properties talk to other landlords. Talk to them about the problems they have, who they target to rent to, where they buy their properties at, whether they would get into the business again.

If you need more information on mileage rates go to my website at www.russravary.com

A Bad mortgage company

2007-02-09T17:00:00.000-08:00

I recently had a real estate sale fall through because of another mortgage companies' poor business practices. They supposedly had pre-qualified this poor customer. The buyer was self employed and has had issues with getting turned down before. So the buyer was nervous whether they could even qualify. So this "supposed 10 year veteran" of this mortgage company gave a pre-approval to buy a home. The buyer knew this "veteran mortgage person". So they trusted them.
When I met with them, I told them a ballpark of how much closing costs should be. I said if you have problems give me a call and I would help them out with the mortgage if I could. Well they called me up and told me that the "veteran mortgage person" was going to charge them between $9,000 - $12,000 in closings costs. They were afraid to change because they were afraid they weren't going to get the loan. They were going to live with the costs. They wanted us to raise the price in order to pay for the closing costs.
Don't do this. This is one of the dumbest mistakes buyers make. You do not have to pay exorbitant closing costs. You are just raising your payments to line a mortgage guy's pockets. Shop the loan if you think you are being taken. There is no reason to pay excess points. You might as well go down and throw the money off a bridge. You have to pay this back for the next thirty years. They were going to add another $30 a month to the payment because of this "good friend."

Sometimes the closing costs look high because you have escrows or you have a FHA loan. The costs are usually higher because you are setting up an escrows. But that is like a savings account for taxes and insurance - you are not getting ripped off there. It is the first two lines of the good Faith and the closing statement that you have to look at.

If you have good to great credit you should never pay points. If you have average to bad credit you still should not pay more than 1 - 2% of the loan amount.

What I am seeing is people with good credit getting charged points and people with bad credit getting bent over. These people were getting bent over.

Unfortunately the "veteran Loan officer" continued to lie through the whole process. She told me that they were almost clear to close one Monday. Then Thursday she wasn't returning my calls. I knew they were not close to closing because they did not even have the title ordered. Then I talked to her boss on Friday. He said the same thing. They were close to closing and they had just ordered the title work that day.

Well this company was so full of lies and lack of professionalism that the following Friday they wouldn't take my call, still hadn't ordered the title work. And this was 26 days after the signing of the contract!!!! These are the type of mortgage people you don't want to work with.

This Sad excuse for a mortgage company wasted the sellers time by pulling a property off the market. They got the hopes up for a buyer that should of never been given a pre-approval letter. If they would have just done a proper job of qualifying the person they would have more satisfied customers. I added them to a list I have of companies that I won't accept a Pre-approval letter from.

They did not even have the courtesy of sending a mortgage denial letter out to the real estate company so the seller could get their deposit back. (as of this posting) I had to tell the buyer to call them and get it.

I hope you have a better day than I did with these clowns. Remember that the world does come around in full circle for clowns like them. I always believe somebody will take advantage of them too. My motto in business is treat somebody like you want to be treated. The saying that I have to feed my family is lame when you have to take advantage of people let alone family, and friends. Take care and have a weekend. See my website for more real estate info http://www.russravary.com

2007-02-04T07:26:00.000-08:00

Rates were still in the low 6's for a thirty year fixed last week. I work as a mortgage broker.

What is the difference between a mortgage broker and a bank? Banks as I say have this box of rules. They have certain criteria for job, length of employment, amount of assets, amount of money you make. Then then take you and see if you fit in their box. Sometimes they can cram you in to fit sometimes they can't. Most banks have their products and one set of rate sheets. Though some are starting to broker loans out.

With a mortgage broker it is different. A mortgage broker represents anywhere from 20 to 200 different banks and lenders from across the country. If they have 30 lenders then they have 30 different rates sheets and hundreds of rates to look at. They have the ability to shop your rate or shop your loan. Every bank has different criteria for time on the job, type of employment allowed, type of home, amount of assets required, amount required to put down, amount of income required. Every month we have loans that get turned down by one lender (or bank) only to be accepted at another lender because it "fit" their criteria. That is why I love being a broker. I do not rely on one bank or one bank's rate. My clients do not have to conform to one bank's conforming box, there may be another banks box that allows self employed people, no reserves, or no money to put down.

That is what is great about being a broker. We can usually do loans that regular banks don't do because there are lenders that have less stringent criteria. There usually is not a reason for a mortgage broker to lose a loan because of the rate. Every bank has a different rate. Though they do not vary hugely. We as mortgage brokers can usually meet or beat a bank's rate. It is like car shopping. There is a bottom line cost but there are some dealers or salespeople that are willing to make less per deal and make it up on volume.

But there are instances where a bank may be exceptionally low for the market and I may be unable to find any bank to match it. I will tell you that and tell you go go with them. For example, a friend's daughter was buying a condo in Ohio. The bank was giving a 1/2 lower rate than market because they had funded the whole condo project. That brings up a second point.

Compare the costs with the rate. Be sure of the loan officer you are dealing with. There are loan officers that pull the bait and switch all the time. At closing you have different rate or different costs. Take a look at my testimonials on my website http://www.russravary.com/ and call me to talk about what you need in a loan.

The outlook for 2007

2007-01-29T14:43:00.000-08:00

The outlook for 2007 is unpredictable at this time. If somebody tells you that rates are going down in August they are just guessing.
Mortgages are now being sold on Wall Street. They are being bundled up in large groups and being sold as investments. Hedge funds and mutual fund even buy them. So rates are about as unpredictable as the stock market. There are many factors that cause the rates to go up and down. Economic conditions play a large role. How earnings come out, Whether the unemployment numbers are up or down, whether new housing starts are up or down. What economist's predict the inflation rate to be in the future, what the Federal Reserve says. All these things sway the rates daily and sometimes twice a day.
Every day the rates change according to the market. Just because a mortgage person told you the rate was 6% last week does not mean that it is 6% today! I have seen rates change as much as .25% in a day. If you are unsure of whether the rate is going up or down it is wise to lock in the rate.
Many times the broker or lender can switch banks if the rate goes down. Many loan officers won't tell you that because it means a lot more work for them. It also means that you are starting all over again from the beginning. Sometimes you even have to re-sign all the papers. So if you are in a rush or have a time frame you may not be able to get that lower rate because of the time it takes to re do the loan.
When a loan officer does this for you he is going out of his way. ( Who wants to do the extra work for the same pay?) Be sure to thank him.
If you want more information on mortgages go to www.russravary.com