4 things to do before buying a home

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

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

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

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?

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

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?

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