What has happened in the last week

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

Declining market stigma in Metro Detroit

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.