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
Tuesday, April 1, 2008
Sunday, March 23, 2008
Improving your credit score
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
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
Friday, March 21, 2008
Seller paid closing costs
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
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
Monday, March 17, 2008
Bear Stearns & the mortgage fallout.
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
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
Sunday, March 16, 2008
Is it a great time to buy or not
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
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
Saturday, March 15, 2008
How mortgage brokers get paid
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
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
Friday, March 14, 2008
Pre-approval letter.
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
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
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