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
Showing posts with label refinancing. Show all posts
Showing posts with label refinancing. Show all posts
Saturday, February 23, 2008
Wednesday, February 13, 2008
President Bush's economic stimulus plan
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
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
Sunday, February 10, 2008
Adjustable Rate Mortgages
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
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
Thursday, February 7, 2008
FHA Refinancing
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
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
Monday, February 4, 2008
Should I refinance part 2
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
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
Friday, February 1, 2008
Should I refinance?
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
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
Thursday, January 31, 2008
No-cost loans and how they work
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
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
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