The Top 10 Reasons To Not Buy A Home In Michigan Until 2010
1. First off, I really do not think anybody should be buying a home for any reason until 2010. There is nothing stopping home values dropping around the country. What needs to happen first is we need to have a leveling out period.
2. Home prices are expected to drop in the greater Detroit, MI area another 8% by May 2009. CNN wrote an article analyzing data and what home prices should be doing. In there you will see Detroit, MI going down 8.6% and Farmington Hills going down 5.9%. This is one of the first charts I have seen that I agree with. Its probably because it was not written by the National Realtors Association. Realtors will always tell you its a great time to buy…mainly because its how they get paid.
3. Shouldn’t this be the time that you want to buy? Prices are dropping at a alarming rate and you have
Click here to continue readingThe Top 10 Reasons Why You Should Give Up Trying To Refinance Your Mortgage If The Appraisal Comes In Low
1. Let’s say that you are trying to refinance your mortgage. It does not matter if it is because you are trying to refinance from a adjustable rate mortgage to a 30 year fixed rate mortgage or if you are just looking to take cash out of the equity of your home. Every single mortgage company in the United States is probably going to be following almost identical underwriting guidelines.
2. One of the main guidelines is that all mortgage lenders must do an appraisal on the home. There was a time during the refinance boom that sometimes you could get away without having to do an appraisal. The only times you could do this was when you were doing a “rate/term refinance” or doing a second mortgage like a home equity loan. A “rate/term refinance” is one where you just change the terms of the loan, i.e, change from a 30 year fixed to
Click here to continue readingThe Top 10 Reasons Realtors Do Not Like FHA Loans
1. The FHA loan has became popular once again over the past 6 months mainly due to it being one of the only 100% financing loans able to use to buy a home. With all of the major mortgage companies going bankrupt around the country they all lost their ability to use their own loans. What I mean by using their own loans is that many companies, let’s say Quicken Loans for example worked with larger banks and investment firms and they wrote their own guidelines. This means that they made their own rules and as long as a bunch of underwriting guidelines were met than the loan could be written and sold on the secondary market for a profit.
2. Realtors loved this during the days of the refi/purchase boom. Since the mortgage companies had their own guidelines a person looking to buy a home could buy just about anything they wanted as
Click here to continue readingThe Top 10 Reasons Why Property Taxes Are Not Calculated Correctly And Need To Change
1. Right now around the country your home is taxed based on a percentage of what the value or home is worth based on what the county assessor thinks it is worth. As an example lets say your local county government has a property tax of 1% and your home was assessed at $300k. You would pay $300k x 1%= $3000 a year in property taxes.
2. This is a great system for the county when property values are going up because as your property value goes up the amount of money you pay in property taxes goes up. The county government does not look bad at all because they did not have to raise the percent to bring in more money, it was the market that did it.
3. For the most part people do not complain about paying a little more in property taxes because they have been told that the value of the
Click here to continue readingThe Top 10 Reasons Mortgage Companies Stopped Doing Second Mortgages
1. Mortgage companies starting around November 2007 stopped doing fixed second mortgages and home equity lines of credit (HELOC) due to changes going on in the mortgage industry. A lot of swift and sudden changes came to the type of companies that were farthest away from the actual money like the mortgage brokers, correspondent lenders, then the banks.
2. The banks are the one’s that set the guidelines for anybody who does business with them. Since a mortgage broker does not lend you the money (the bank does that the mortgage broker works with) they were told that they would not be honoring anymore fixed second mortgages or HELOC’s. This lead to a mad dash from all of the smaller companies to close these loans so they could sell them to the bank before the deadline or they would not be able to close.
3. What lead to this rush was a realization
Click here to continue readingThe Top 10 Reasons You Need To Pick The Right Second Mortgage
1. For those of you that do not know what a second mortgage is, it is a lien (loan) against a certain percentage of the equity of the home. What the mortgage company does is recognizes that you have a first mortgage on your home and they take the balance of that loan, get an appraisal on the home and say you have this amount of equity in the home. As an example, you have a first mortgage of $125k and the home is worth $200k, this gives you equity of $200k – $125k = $75k. Depending on what mortgage company you go with and what their guidelines are you could take out a second mortgage up to 100% of the value of the home.
2. During the real estate boom some lenders did second mortgages up to 125% of the value of the home because during that time the value of
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