Hundreds of Mortgage Options

Posted on June 18, 2018 by Anthony Bird - Buying a Home, Mortgage Tips

As local mortgage experts, we are here to help all types of families. We do mortgages. Only mortgages. We do not offer auto financing or credit cards. This allows us to be experts at what we do and have many types of mortgage options for all financial situations.

If you have a unique financial situation, there is no better spot to get a loan than a local mortgage broker. We can shop rates and mortgage programs at multiple banks and underwriting companies at once. This insures that you will receive the best mortgage package available for your situation.

Low Rates. Low Costs. Expert Advice

To get expert advice, call us at 1-800-555-2098 or simply apply online below. We are happy to help!

Michigan VA Loan Site Condos

Posted on June 7, 2018 by Anthony Bird - Buying a Home, VA Loan

The Department of Veteran Affairs has announced a major change that will waive the condo approval process for homes built as site condos in Michigan. This change will open up the availability of homes for VA loans and speed up the home loan process.

Effective immediately, site condominiums in the state of Michigan will be processed in the same manner as a single family detached residence.

Nearly all new single-family homes in Michigan are built as site condos which were previously required to be approved as if it were a condo complex. These extra requirements caused an unnecessary burden on veterans applying for VA loans in Michigan.

Effective May 24th, 2018, the Veterans Association will now recognize site condos as single family residences. These changes make it easier for veterans to qualify for VA Loans.

What is a Michigan Site Condo?

A site condo is defined as a single-family detached home that was built in a development under a Master Deed with agreed upon covenants, conditions and restrictions or CC&Rs. No part of the house or land is considered common area, however, the association may collection Home Owners Association dues for amenities that are outside the bounds of the property.

What are the benefits of Site Condos in Michigan?

Many new home developments in Michigan are built as Site Condos where the home and land are owned and maintained by the individual owner and the common areas are maintained by the condo association.

Just like condominiums, site condos may have amenities such as pool areas and recreational facilities. Additionally, the roads to the individually owned properties are maintained by the association. The costs of these amenities are split among the association members in the form of Home Owners Association Dues (HOA dues). The costs of the dues will vary from association to association.

Why does Michigan have Site Condos?

In 1978 the Michigan Condominium Law was passed which allowed for quick approval of home developments on private property. Since then, the majority of new single-family residences have been classified as “site condominiums” (site condos).

This classification allows developers to build neighborhoods faster and more efficiently because they utilize private roads and common areas that are paid for by the association members.

Do VA Loans need Site Condo Approval in Michigan?

With Michigan’s VA site condo changes, Military Veterans will now be able to use their VA Loan benefits to purchase Site Condos in Michigan without having to go through the VA condo approval process.

The condo approval process would previously require books of documentation and up to two months for review making it nearly impossible for a small site condo neighborhood to be eligible for VA financing.

Moving forward, Veterans will have a wider selection of homes that they can purchase using VA Home Loans. Veterans can now pick a home and close quickly.

5 Steps to do When you get Denied for a Mortgage

Posted on May 11, 2018 by Anthony Bird - Buying a Home, First Time Home Buyer, Local Michigan

The feeling of rejection can be overwhelming especially if it is for a mortgage denial. If you applied for a mortgage to buy a home, chances are you were making major plans in your life to prepare for your move. You were probably excited and told friends and family and now must deal with the embarrassment of telling them you couldn’t get approved for a loan.

Before you throw in the towel and accept that you cannot get a mortgage, there are 5 steps you should take to review your options.

1) Ask Your Loan Officer Why You Were Denied for a Mortgage

When a home loan gets denied, the financial institution that you applied with must issue a Notice of Adverse Action. This is a form sent to you within 30 days of your mortgage denial. Regulations require the form to list “A statement of specific reasons for the action taken.”

If you are still unsure why your loan was not approved, you should ask your loan officer why you were denied. It is your loan officer’s job to property explain to you why your loan was not approved and provide options and alternatives.

2) Confirm Your Information is Correct on your Loan Application and Credit Report

Once you know the specific reason why your mortgage was denied, your next step is to confirm that all of your information was accurate on your loan application. Take another look at your information on the application that you signed and confirm that your income, assets, and liabilities are all accurate.

If the reason for your loan denial was due to credit, you should request a free copy of your credit report which can be done annually to confirm your information is accurate. Review all items to make sure there are no errors. Common errors on credit are late payments and collection accounts that do not belong to you.

If you have errors on your credit report, provide documentation to your loan officer and ask about options to do a rapid rescoring of your credit to fix the errors. You could also contact the credit bureaus directly and request corrections which could take 30+ days.

3) Look in the Mirror and Confirm if Now is the Right Time to get a Mortgage

If your mortgage was denied, it may make sense to look in the mirror and ask yourself if now is the right time to get a mortgage. Many times, people get the idea of buying a home but they are unable to keep up with their current bills. Adding a mortgage on to your already tight budget may be a poor financial decision.

Mortgage applications are commonly denied because the underwriter’s research finds omissions on the borrower’s application. For example, if you pay child support and did not tell your loan officer, an underwriter may discover this extra obligation on your paystubs. Underwriters also have software to scan public records for previous foreclosures, judgments and real estate owned. Any of these factors could easily lead to your loan being denied if you did not disclose this information up front.

A loan officer’s job is to work with you as a team to find solutions to get you approved for a mortgage. Be straight forward with your loan officer so they can better assist you and anticipate potential issues up front. If you applied for a loan and it was denied because you withheld information when you did your loan application, you should a step back and refocus your frustration on fixing the underlying issues.

4) Work to Fix the Reasons Why Your Mortgage Was Rejected

There are a million ways a mortgage can be denied. It is difficult to anticipate all potential underwriting issues up front despite you and your loan officer’s best efforts. Now that you know the reason why your loan was rejected, you should work on fixing the reasons so you can re-apply in the future. Here are some common reasons why mortgages are denied and solutions to get your ready for approval:

Your Loan was Denied because your Credit Score is Too Low

If your credit score is too low, there may be easy things that you can do to improve the score. The quickest and easiest options is to pay down credit card balances. Part of your credit scoring equation is your credit/debt ratio. All three major credit bureaus analyze the amount of available credit and how much of that you are utilizing.

To get the highest credit scores, you will need to pay down your credit card. For example, if your credit card limit is $1,000 and you owe $989, this is essentially a maxed out credit account which reflects negatively on your scores. To improve your credit you should pay down your balance to 30% or less of your credit limit. In this case you would need to pay down the balance to under $300. You will then need to wait for the creditor to report again to the credit bureaus before having your credit report updated.

Fixing errors on your credit should be another easy solution to improving your score. You can certainly contact the credit bureaus and dispute inaccurate information on your own or you could speak with a credit repair agency for assistance. This process can take several months and should not be done during a loan application.

If your credit score was too low, you may still qualify for other loan types. Conventional mortgages are very credit score driven while FHA Loans are more flexible on credit requirements.

Your Loan was Denied due to High Debt-to-Income Ratios

If your loan was denied because your debt-to-income ratio was too high, this means that you have too much debt for your qualifying income. There are two solutions to this problem, A) Increase your income or B) Reduce your Debts.

Increasing your income sounds great but it may not be an easy solution. If you have been promised a raise at your job but not gotten it yet, then you may want to speak with human resources about getting a raise. If you are a w2 employee, underwriters will allow your new pay rate for qualifying right away. Getting a 2^nd job may help you with more cash flow, but typically you cannot count income from a 2^nd job unless you have a 2 year history of working more than one job.
The easier answer to fixing your debt-to-income ratio is to examine your current obligations and see what debts you could get paid off. This includes, paying off credit cards or installment loans or selling things. If your goal is to buy a home, it may be a good time to sell that expensive camper to get rid of the monthly payment. Alternately you could look at buying a less expensive house that would better fit in your budget. Lastly, you could review options to consolidate debt and refinance high interest credit cards into a lower payment.

Your Loan was Denied due to Insufficient Assets

When you buy a home, you are required to document the money needed for your down payment. Part of the underwriting process is sourcing and seasoning your assets. This means that you need to show where your money came from if it was freshly deposited into your bank accounts. Unverified deposits must be subtracted from your available assets that you can use to qualify for a mortgage.

If your loan was denied because you did not have enough cash, there are several solutions you can consider:

Look for Mortgage Options with a Low Down Payment or No Down Payment: The current lender you are working with may not have as many options for low down payment mortgages. There may be home loans that require less cash for your down payment.

Save up Money in your bank account:

Cash on hand cannot be used to qualify for a mortgage. You cannot deposit large sums of money into your bank account and use it to buy a home. An alternate option to this is to deposit only your weekly paycheck and let that accumulate while you pay your expenses with the cash on hand.

Look for Gift Options:

When buying a home, you may be able to get a gift from a family member to use towards your down payment. Most loans allow for this as an option. Have a conversation with your family members and see if they have some available asset they could gift to you so you can become a home owner.

The last option to review if your loan was denied because of insufficient assets is to sell your belongings. Remember documentation is key if you are going to sell things to use as a down payment on a home. You should keep a thorough paper-trail including a sales agreement signed by both parties, an appraisal of the item you are selling, documentation that you are the owner of the item and proof of payment such as a copy of the check or money order. Do not accept cash as cash cannot be easily verified.

5) Get a Second Opinion from a Different Mortgage Company

If you have completed the first 4 Steps and did not find a quick solution to get approved for a mortgage, then the best answer is to get a second opinion from a different mortgage company. No two lenders are alike. All lenders have different guidelines and requirements for financing. A bank or lender may have denied your loan due to one of their internal “overlays” which is an additional restriction on financing.

Your best chances at financing are to get a second opinion form a mortgage broker. Mortgage brokers will have access to multiple banks and lenders and can review all your home loan options with one application. Typically mortgage brokers can also offer lower rates and lower costs than other banks and lenders.

To get a second opinion on your home loan options call a licensed loan officer at Riverbank today at 800-555-2098. Our experienced loan officers will take the time to review why you were denied by the other lender and provide solutions to help get your approved for a mortgage.

How to Get Your Offer Accepted

Posted on May 3, 2018 by Anthony Bird - Buying a Home, First Time Home Buyer, Low Down Payment Loans, Mortgage Tips

If you have been searching for a house in the last couple of years, you will be familiar with what the real estate industry calls a “lack of inventory”. This means that there are more people looking to buy houses than there are people interested in selling homes and there is more competition on each home. This imbalance causes a housing shortage which can be a frustrating situation for families looking to buy a home and makes getting your offer accepted a tough task.

The housing shortage has created a spike in home prices. According to the National Association of Realtors, “The median existing-home price for all housing types in March was $250,400, up 5.8 percent from March 2017 ($236,600).” This increase in prices has been affecting home affordability nationwide.

Infographic from http://www.simplifyingthemarket.com/en/2018/04/27/existing-home-sales-grow-despite-low-inventory-infographic/

Locally in West Michigan, it is very difficult to find affordable homes under the $200,000 range. For first time homebuyers and those looking to downsize they are seeing multiple offer situations and bids far over the home’s listing price. Some desperate buyers are going as far as to waive their right to inspections and guaranteeing to pay above appraisal amounts. For those that do not have access to large amounts of cash, they may have a hard time competing with their bids.

How to Get your Offer Accepted to Buy a Home in a Sellers Market in Michigan

Getting your offer noticed in a stack of multiple offers is not an easy feat. Many sellers are reviewing several offers for their home and simply disregarding lower priced offers and also offers with contingencies and what they consider riskier financing. Here are 8 tips on how to make your offer stand out and get your offer accepted to buy a home in Michigan.

1) Get a Strong Pre-Approval to Strengthen your Offer

To get your offer accepted there are several things a buyer can do. First of all you should speak with a local, knowledgeable, licensed loan officer that can Pre-Approval you for the strongest type of mortgage that you can qualify for. Typically sellers see conventional as the best type of financing because it has less requirements for the home’s condition than other loan types and can close quickly. Receiving a strong pre-approval from a local lender will put you a leg up on the competition with generic automated letters from the big national companies.

2) Consider Alternatives to Seller Paid Closing Costs

If a buyer does not have enough funds to cover their own closing costs then it is a common practice to ask the sellers to pay their closing costs as part of their offer. The sellers will view this as additional costs and reduce their proceeds from the sale. Alternatives to Seller Paid closing costs should be considered including:

Pay your own closing costs
Ask about low down payment or zero down loans
Get a gift from a family member for your costs
Ask the lender for lender credit option to reduce your costs
Look for ways to reduce your closing cost by shopping insurance and title company fees

3) Give the Sellers Occupancy After the Closing

Many sellers are hesitant to sell because they are fearful that they will not be able to find a new home in time to transition their belongings to a new house. It may help to calm their fears by giving them extra time to move after you close on the purchase of their house. It is common these day to offer 30 days after close for the seller to vacate the property. This may be an important reason why they choose your offer over others.

4) Personalize your Offer By Writing a Letter

As cheesy as it sounds to write a heart felt letter, my experience shows that it works! Many times there are a lot of emotions and memories that come with a house. It may be the place where they raised their children.

They may have put sweat and tears into building the house. It might have been a house that was in the family for generations. All these factors compel the sellers to want to make sure it goes to a deserving family that will appreciate it as much as they do. Simply tell them why your happy little family would be deserving and that you will take great care of the place.

5) Offer to Pay Seller’s Closing Costs

If you have access to cash and feel strongly about getting your offer accepted, you could offer to pay for the sellers closing costs. In Michigan, Property Transfer Tax and Owner Title Insurance are typically paid by the seller unless otherwise agreed to by the buyer. If a buyer agrees to pay the sellers closing fees, the sellers would net more from the sale and walk away with more money.

6) Remove Contingencies from your Offer

Many times families will have contingencies before they can buy. For example, if you plan on selling your home before buying your next home, then you may write your offer contingent upon the sale of your home. This is a risky unknown for sellers. Your house may take a long time to sell which would not work with the seller’s timeline.

If you are able to qualify for a new home while still owning your other home, then it may be advantageous to submit your offer without a contingency for the sale of your home. Other contingencies you could remove would include appraising at sales price, or even waiving property inspections. These should be carefully considered as a last resort to get your offer accepted.

7) Adding an Escalation Clause as Part of your Offer

Speak with your real estate agent about how an escalation clause may work for your situation. In general, a clause would be added stating that if someone else offers higher than your offer, you will automatically increase your bid higher than theirs. You would want to make sure you set a cap on the maximum amount you are willing to offer.

8) Ask your Loan Officer to Call the Listing Agent to Confirm your Pre-Approval

Having a loan officer that will go above and beyond to fight for you is an important part of buying a home. Studies show that having a local loan officer versus a big bank or online lender increases the strength of your pre-approval. Part of a seller’s concern when reviewing offers on their home is that the buyer’s financing may fall through. If your loan officer has already received your documentation and confirmed that you are a well qualified buyer, then ask them to call the listing agent to confirm the details and give the sellers confidence in accepting your offer!

To review home loan options with a Licensed Loan officer simply complete the form below to request a free consultation or call us now at 1-800-555-2098.

Conventional Loan vs FHA Loan vs VA Loan vs USDA Home Loans

Posted on April 14, 2018 by Anthony Bird - First Time Home Buyer, Local Michigan, Mortgage Tips

When shopping for a mortgage it is a good idea to compare loan options. Many lenders offer a variety of home loans that might fit your needs. Each mortgage options has it benefits and weaknesses that should be considered for your individual loan needs.

Lending guidelines are not the same for all mortgage lenders. All banks and mortgage companies operate off the same set of guidelines for the specific mortgage programs however each may have its own overlays. Lending overlays are additional conditions or interpretations of the set guidelines. For example, FHA loans with a 3.5% down payment allows as low as a 580 credit score but most banks and lenders add an overlay that requires a 640+ credit score.

The best way to review mortgage options is to speak with a licensed loan officer that will be an expert on the loan options. They will help to review the pros and cons and assist with comparing home loans that may be the best for you.

The chart below compares Conventional Loans vs FHA loans vs VA loans vs USDA Rural Development Loans. These are the most popular loan options that most borrowers will review. As you can see below, if you have had a recent bankruptcy or foreclosure then Conventional would not be an option.

If none of these options seem to fit your life situation then a portfolio loan may be your last resort. Portfolio mortgages are home loans that do not fit the agency guidelines. They take a more common sense approach and make exceptions on loan requirements if the borrower is has financial strength in other areas. The trade off is that they typically require larger down payments and have higher rates than other loan programs.

Home Loan Comparison Chart

April 11th, 2018:	Conventional Loans	FHA Loans	VA Loans	USDA Loans
Minimum Required Down Payment	3% of Purchase Price	3.50% of Purchase Price (Only 1.5% required for our FHA Down Payment Assistance Program)	Zero Down	Zero Down
Annual Mortgage Insurance Rates (Paid Monthly)	Private Mortgage Insurance (PMI) ranges from .10 to 1.5% of the loan amount annually based on Residency Status, Credit and Loan to Value.	Mortgage Insurance Premiums (MIP) ranges from .80% to .85 % for loan terms over 15 years and .45% to .95% for loan terms of 15 years or less.	NONE	.5% of loan amount
Additional Costs	Increase to rate or loan fees based on credit score	1.75% Upfront Mortgage Insurance Premium added to your loan balance or paid in full at closing.	0% fee if Disabled Veteran or surviving spouse 2.15% for First VA Loan Standard Military 2.40% for First VA Loan National Guard or Reserves 3.3% Subsequent Loans	2.00% Funding Fee added to your loan balance.
Minimum Credit Score	620+ credit score	530+ with 90% loan to value and 580+ for 96.5% loan to value	550+ credit score	580+ (Additional requirements including proof of Rental History under 620 score)
Maximum Loan Amount	$453,100 Loan Limit (Read More)	$294,515 Loan Limits for Single Family Homes $377,075 for Two Units $455,800 for Three Units $566,425 for Four Units	$453,100 Loan Limit	$453,100 Loan Limit
Allowable Seller Contributions	Principal Residence & Second Homes LTV Greater than 90% = 3% LTV 75.01-90% = 6% LTV 75% or less = 9% Investment Properties ALL LTV ratios = 2%	6% Seller Contributions payable towards Buyer Closing Costs and Pre-Paid items.	4% Seller Contributions payable towards Buyer Closing Costs and Pre-Paid items.	USDA sets no maximum however most lenders set 6% Seller Contributions payable towards Buyer Closing Costs and Pre-Paid items.
Required Waiting Period after Bankruptcy	Chapter 7 requires 4 Years from discharge date Chapter 13 requires 2 Years from discharge date	Chapter 7 requires 2 Years from discharge date Chapter 13 requires 1 Years from discharge date	Chapter 7 requires 2 Years from discharge date Chapter 13 requires 1 Years from discharge date	Chapter 7 requires 2 Years from discharge date Chapter 13 requires 1 Years from discharge date
Required Waiting Period after Foreclosure	7 Years from Completion	3 Years from Completion	2 Years from Completion	3 Years from Completion

To review home loan options with a Licensed Loan officer simply complete the form below to request a free consultation or call us now at 1-800-555-2098.

Budgeting to Become a Homebuyer

Posted on March 19, 2018 by Anthony Bird - First Time Home Buyer, Local Michigan, Low Down Payment Loans, Mortgage Tips, Zero Down Loans

You have found yourself in debt, but you have also found yourself wanting to buy a home. You want to pay off the money that you owe all while saving up money for your dream home. It is possible? First off, you should know that you are not alone. Many people find themselves in situations such as this, but there is a way to come out of this and end up in a home that you love.

Budgeting is the Place to Start to Prepare for a Home Purchase

Let’s be real budgeting can be overwhelming, but hear me out! Instead of thinking of budgeting as a restriction think of it as a guide. A guide that will lead you down to a path of financial stability. And besides what is more terrifying — budgeting or being in debt?

Step 1) Budgeting: Track your expenses

Start by writing down your expenses. How much do you spend on food? Gas? Going out? Track what you are spending for one month and when you are done determine if that amount of money is over or under what you can afford.

Step 2) Budgeting: Reduce expenses

Figure out what things you can cut back on. Do you really need to do things like going out to eat five times a month? Probably not.

Look for alternatives to the things you normally do. Instead of going out to eat for lunch at work, pack your lunch. Instead of going out to the movies, rent one and have a comfortable night in with your friends, family, or significant other. If you want to go out try finding coupons for the place you are going and save money that way. One thing you should ask yourself when shopping for things that you really do not need is if you would rather have that particular item or a home.

Step 3) Budgeting: Save Money

Once you have figured out ways to cut back on spending, put the extra money into a savings account. Try and save up an emergency fund of at least $1000 or whatever you feel comfortable with. It can be hard to eliminate credit card debt, for example, when you do not have an emergency fund established because something expected can happen and force you to use your cards and bring you more into more debt.

One way to earn money is by selling your possessions that you do not want or need. You can use the profits from this to reduce debt or save up for a down payment. Just make sure that you are receiving sales receipts for the items that you sale so that you have documentation for the lender on how the money got into your account. You could also use the money from the things that you sell to live off instead of taking money out of the bank.

Step 4) Budgeting: Pay down debt

When you have an emergency fund saved up, then it is time to start paying off your debts and raise your credit score! At the very least you should make sure you are making your minimum payments. Lenders usually look at the minimum balances that are reported to credit companies in order to calculate your debt-to-income ratio.

So once you have your emergency fund established use the money that you were putting into the fund into either the card/loan with the smallest balance to get it paid off quickly or into the card/loan with the highest monthly balance (if you are able to pay it off in a relatively decent amount of time).

This can take time. It can take up to 30 to 60 days to show that you have paid on a credit card or a loan. You can try calling your credit card companies to figure out when they report to the credit companies. This can help you find out when it will be best to pull your credit when applying for a mortgage.

What About Loans that Require Zero Down?

If you do not have money saved, you may still be eligible for a zero down home loan with Riverbank Finance. We offer great zero down programs including the USDA Mortgage and VA Loan. USDA loans only apply for rural homes and VA loans acquire you to be eligible for military benefits. Ask your loan officer if you are eligible for these options.

Keep in mind, even with zero down loans, there are costs in addition to the down payment. those trying to get a mortgage would also need funds saved up for appraisals and closing costs. To save on cash at closing, a buyer could as the seller to pay for these costs as party of the sales agreement.

Low Down Payment Mortgages

A common misconception is that you need to save 20% for your down payment. While there are benefits to applying a large down payment, most people do not have access to that large of a bundle of cash. We have several low down payment options that might be perfect for your situation!

1% Down Conventional Loan

Riverbank Finance LLC is pleased to offer the Conventional 1% Down Mortgage with Equity Boost home loan program. In this program, you can purchase a home with 3% equity, but only 1% down payment. How does that work? You, the buyer, contribute 1% and we, your lender, contribute 2% giving you a total of 3% equity at close.

FHA Loan with Down Payment Assistance

Another great low down payment options is our FHA loan with down payment assistance. With this program you will get a gift of 2% of the sales price towards your down payment. This means that you would only need 1.5% down for the required down payment.

One of the most important things is to not make budgeting and saving money seem like a chore or else it might make you want to stop trying. If you need advice on what you should do in your situation give Riverbank Finance a call and let our trusted loan officers help you find a solution to your debt issues and help you get the home that you want.

8 Common Mortgage Questions

Posted on February 26, 2018 by Anthony Bird - Buying a Home, First Time Home Buyer, Mortgage Tips

For some, buying a home can be a scary experience, but it doesn’t have to be. The first step of the homebuying process should be to do research. Researching is one of the most important things that future homebuyers could and should do. Here are some commonly asked questions about mortgages and the homebuying process.

1. Am I able to get a mortgage if my credit is not that great?

Even if your credit score is not the greatest you may still be able to qualify for a loan. Having a higher credit score is beneficial though as it allows for buyers to get better interest rates. This saves them from paying thousands of dollars more than someone who has a low credit score. The minimum credit score for conventional loans is 620, while the minimum score that the FHA, VA Loan, and USDA Mortgage will allow is 580. That being said, lenders have their own minimum scores that they will accept.

2. What type of home loan is best for me?

It all depends on your situation. If you have a high credit score and money for a down payment, conventional would probably be a good choice for you. At Riverbank Finance, we have loan options that will pay up to 2% of the 3% down payment requirement if the client has a credit score of 720 or higher for conventional loans. This is great because then it means you only have to put 1% down on your home.

If your credit score is between 620 and 720, the down payment can be as low as 3%. If your credit score is not that great, a FHA loan would probably be the best for you, but you will need a 3.5% down payment. A USDA loan is great for those who are looking to live in a rural area and want to put zero down. Veterans can apply to get a VA loan which is also zero down.

3. How do I get pre-approved for a mortgage?

Call up Riverbank Finance today if you are looking to get pre-approved. Our loan officers will be able to tell you over the phone whether or not you are pre-approved. You will be asked about your income, available assets, current debts, employment, details about the property, and credit. It is beneficial to get pre-approved because it not only lets the seller know that you have a lender ready to work with you, but it also tells the seller that you are a serious bidder.

4. What documents are required for a home loan?

Typically, you be required to send in the following documents:

Driver’s License
Social Security Card
1 Month Worth of Paystubs
2 Years of Most Recent W2s
2 Years of Most Recent Tax Returns (if self-employed or commission)
2 Months Bank Statements
Most Recent Quarterly Retirement Statement
Home Owner Insurance Quote
Purchase Agreement

Once your file is in processing you will be asked for additional documents specific to your situation.

5. Should I buy mortgage discount points?

That depends on your situation. One point usually costs about 1 percent of the mortgage and usually reduces your interest rate by 0.25 percent. Sometimes it does not make financial sense to buy points. Especially if you do not plan to live in the house for that long of a time. It can take a long time to make up the expenses that it cost to buy the points. If that is the case, then buying points may not be so beneficial for you. On the other hand, if you plan on keeping the property for a long time then buying the points can potentially save you thousand of dollars in interest.

6. How much do I have to pay for closing costs?

Closing costs will vary for each loan. They could range anywhere from 0 to 5 percent but usually average to about 2 to 5 percent of the purchase price. Closing costs typically include fees from title insurance, property taxes, mortgage application fees, and homeowners insurance. If you ask for seller’s paid concessions that can cut down on the amount of closing costs that you need to pay.

7. How long does it usually take to close?

At Riverbank Finance, we aim to close our loans within 20 to 30 days. The industry average time to close a mortgage is currently around 43 days according to the Ellie Mae mortgage survey. The amount of time can vary though depending on your situation. It is important to keep in touch with your loan officer and processor though the whole course of the loan. It is also extremely important to get the additional documents that are asked for in order to keeping the loan moving.

8. What does the process look like?

First, your loan officer will take you through the pre-approval process listed above. Your loan officer will then help you complete a loan application. After you are pre-approved or if you are pre-qualified you will be asked to send in your official documents. Your loan officer will check these over and make sure that they match up to the information given early.

After you have sent in a purchase agreement your loan will go into processing. You and your loan processor work together to send in the additional documents that the underwriter asks for in your conditional approval. Once all of these conditions are met your loan can be scheduled to close.

If you have any additional questions, please call Riverbank Finance at 800-555-2098 and ask to speak with one of our loan officers. Or sign up on our website. Remember the homebuying process does not have to be hard if you do your research up front!

Use Your Tax Refund As a Down Payment to Buy a Home

Posted on January 29, 2018 by Anthony Bird - Buying a Home, Local Michigan, Mortgage Tips

Saving money for a down payment can be one of the biggest challenges in buying a home. Most loan programs require some form of a down payment from the home buyer. During tax season, this may be the perfect opportunity to qualify for a new home. IRS tax refunds are eligible as a source for a down payment for home buyers. With several low down payment options available, even a small tax refund may be the key to becoming a home owner.

Do I have to wait for my tax return to get pre-approved?

No, you do not need to wait to get your refund back to go through the pre-approval process. When you call in or request loan information on Riverbank’s website, you can let your loan officer know how much money you are expecting to get back. Your loan officer can use that as a starting point to begin your mortgage pre-approval. You should file your taxes as soon as possible that way you can receive your refund as right away. The quickest way to receive your refund is via direct deposit. January 29^th is the first day of 2018 that the IRS will accept tax returns for 2017.

Low Down Payment Home Loans

You may be able to use your tax refund as a down payment to buy a home. With our low down payment home loans, even a small refund can be enough to help you become a home owner. Low down payment home loans include the following options:

Tips to increasing your IRS Tax Refund for a Down Payment

When it comes to mortgage qualifications, assets are a crucial part in the overall financial picture. To make sure you have the best chances at being approved you should document more than enough asset in the bank, retirement or of course from your tax refund. Here are a few tips to increase your IRS tax refund.

Claim Dependents on your tax returns.

During the year you have have your employer lower or remove your dependents so they withhold more of your income for taxes. When you file you will then claim any dependents including children, spouses or those that you financially support. This will help to boost your refund at tax time.

Contribute to your retirement account to get extra tax benefits.

If your company sponsors a tax deferred retirement account such as a 401k or 403b, you may be able to participate and lower your taxable income. If you are self employed or work for a business that does not have a formal retirement plan then you may be able to contribute to a qualifying Individual Retirement Account (IRA) to reduce your income and save for retirement.

Itemize your expenses on your tax return.

If you have enough in deductions, you may be able to itemize your deductions to lower your taxable income. Many times, people claim only the standard deduction. If you have enough qualifying expenses or charitable contributions then itemizing may help boost your refund.

Things You Should Not Do With Your Tax Refund

There are some things that you shouldn’t do with your tax refund when you are considering buying a home. Doing some of these things may cause your loan to be rejected due to certain guidelines that lenders follow.

Do not move money around without documentation

You should not elect to receive your refund in the form of cash or withdraw the money from your bank account immediately. A lender does not want to finance someone they feel could be money laundering. Even if you are not money laundering, but it looks as if you are your file can be denied if you cannot document your paper trail.

Do not waste your Tax Refund on things you do not need.

Another thing that you should not do is to waste the money that you have received. Getting a large chunk of change at the beginning of the year can lead to temptations. Be sure to use this money as a way to reach your financial goals.

Your tax refund can allow you to put a down payment on your new home and will decrease the monthly payment on your home. You can also look into receiving seller’s concessions then you can have some if not all of your closing costs paid for.

Why you should use your tax refund to buy a home.

For future homeowners tax refunds can be a great source of money to use as a down payment on a home. Although the refund can be tempting to spend on things that could be considered more fun like shopping or going on a vacation it is a better idea to use it towards an investment like a home.

There are advantages to owning a home vs renting. Monthly mortgage payments can cost less than renting an apartment and unlike an apartment you can sell the home and make money off of it when you are ready to upgrade. In many areas, renting can cost significantly more than owning your own home.

To review options on how you can use your tax refund to buy a home, Call Riverbank Finance today at 800-555-2098 if you are ready to take the first step in buying a home.

Should I Refinance My Mortgage?

Posted on January 18, 2018 by Anthony Bird - Home Affordable Refinance Program, Local Michigan, Mortgage Tips, Refinance

There are several reason why you might benefit from refinancing your home. Many people choose to refinance to simply lower their interest rate while others have goals of doing home improvements or debt consolidation. Depending on your financial goals, refinancing your mortgage may be a smart choice.

Refinance to a lower rate
Refinance to a shorter mortgage term
Cash Out Refinance
Refinance to Drop PMI
Debt Consolidation Refinance
Refinance a FHA loan to a Conventional Loan
Refinance to a Reverse Mortgage

Rate and Term Refinance Loans

A rate and term refinance loan is a mortgage refinance that allows you to change the rate and the term for your mortgage. With this loan type you typically cannot get cash back at the closing. This the perfect loan type to reduce your interest rate or to pay off your loan more quickly.

Refinancing to a Lower Interest Rate

Refinancing your mortgage to a lower interest rate is the most common type of refinance loan. The rule of thumb is that if you can recover the costs associated with refinancing by the monthly savings in 3-5 years or less then it may make sense to refinance your mortgage.

With mortgage rates remaining low, there is no reason to pay a high interest rate on your home loan. Many refinance loans do not even require a home appraisal and may have little to no closing costs.

Refinancing your home loan to drop your interest rate is a no-brainer if you plan on being in your home for the next few years and the monthly savings is enough to make sense for your situation. Ask a loan officer to help determine the time to recover your costs by doing a break even analysis.

Pay Off your Mortgage Quickly by Refinancing to a Shorter Term

If retirement age is just around the corner, you may have a financial goal of paying off your mortgage in the next 15 years. If you are currently in a 30 year mortgage then you may be able to drop your interest rate by going with a 15 year loan term. With the lower interest rates of 15 year mortgages your mortgage payment may stay the same or only increase a slight amount.

The benefit of refinancing to a shorter term mortgage is that your loan would be paid off in a fraction of the time saving you a large amount in interest. You do the math. If you currently pay $1,000 per month for your mortgage but your loan is paid off, that is $12,000 more per year in your pocket! If you save 10 years of payments that adds up to $120,000 which changes your financial picture.

Use our Mortgage Amortization Calculator to estimate the total mortgage interest paid on your loan.

Cash out Refinance Loans

A cash out refinance loan is a mortgage refinance that allows a homeowner to receive cash back from the equity in their home. Once a homeowner has owned their home for a long enough period to accumulate equity by the increased property values they may have value in their home called home equity.

How can a Homeowner Access the Equity in their Home

To access the equity a homeowner could sell their home and receive the cash proceeds after paying off any mortgages. If a home owner wants to keep their home and get access the equity they have then a cashout refinance may be the perfect fit.

Limitations for Cashout Refinance Loans

Typically cash out refinance loans are limited at 80% loan to value (LTV) for conventional loan or 85% loan to value for FHA however a military veteran can access up to 100% of their homes equity with a cash out refinance.

Debt Consolidation Refinance Loans

A debt consolidation refinance is when a homeowner uses the equity in their home to pay off other debts by refinancing the balance into their mortgage. This type of mortgage can be used to pay off high interest rate credit cards, personal loans, auto loans or even student loans. Others may use a debt consolidation refinance loan to pay off IRS tax debt or liens against their property.

The benefit of a debt consolidation refinance would be to lower the overall interest rate and monthly payments of a homeowners debts. For example if they currently $1,000 for their mortgage, $300 per month for a credit card and $500 per month for their car loan, they may be able to consolidate their debts into a mortgage and have a payment of $1250 per month. In this example they would bring their monthly payments down from $1,800 per month to $1250 per month for an overall savings of $550 per month. This savings adds up to $6,600 per year!

Refinancing to Remove Private Mortgage Insurance (PMI)

Many homeowners refinance their mortgage to drop PMI, or Private Mortgage Insurance, from their payments. This can be done if you have 80% equity in your home.

Private Mortgage Insurance (PMI) is basically foreclosure insurance that protects your mortgage company in case you do not make your payments. There is not benefit to you as a homeowner having PMI other than it may allow you to initially purchase without a large down payment.

Refinancing from an FHA loan to a Conventional Mortgage

If you currently have an FHA loan then you most likely pay mortgage insurance. FHA requires mortgage insurance even if you were to purchase and place a 20% down payment. With current FHA guidelines, the mortgage insurance never drops off for most FHA loans. For this reason, it may make sense to refinance from a FHA loan to a Conventional Mortgage with no PMI.

Use our Conventional Mortgage Calculator to estimate your new mortgage payment.

How to Drop PMI from your Mortgage

You may need to pay for an appraisal to document your home’s new value as part of the refinance process. For example, if your home appraises at $100,000 and you only ow $80,000 then you would have $20,000 in home equity which equals 20%. By refinancing your mortgage with a conventional home loan you would not have PMI on your new mortgage.

Benefits of Dropping PMI from your Mortgage

Dropping PMI could save you hundreds of dollars off your monthly mortgage payments. If you have been aggressively paying down your mortgage balance or if you believe homes in your area have jumped up significantly in value, then speak with a loan officer and review options to refinance and drop PMI from your mortgage.

Other Reasons to Refinance your Mortgage

There are several reasons to refinance your mortgage as shown above. Others may have additional reasons to refinance such as removing a co-signer, changing your loan servicer that has poor customer service, paying down the principal and refinancing to drop the monthly payments, refinancing to a Reverse Mortgage etc. The list goes on!

To review all the benefits of mortgage refinance programs we suggest that you speak with a licensed loan officer. They will help to determine your financial goals and provide information on refinance options to accomplish your goals. Riverbank Loan officers are standing by to help at 800-555-2098 or you may request information by completing the short form below.

Buy a Home with Just 1% Down!

Posted on January 15, 2018 by Anthony Bird - Local Michigan, Mortgage Tips

Buy a Home with Just 1% Down and get up to a 2% Lender Gift towards your down payment. Buying a home has never been more affordable with our low down payment Conventional Mortgage.

SUBMISSION DEADLINE FOR PROGRAM: MAY 31ST, 2018

Unlike Down Payment Assistance programs, such as MSHDA, there is no 2nd mortgage required. This is a true gift at the closing from the lender that is applied to the down payment. This give you 3% equity at the closing!

This program is available through our FannieMae HomeReady Mortgage which offers low fixed rates on 10 year to 30 year mortgage loans.

1% Down Mortgage with No PMI

To get the lowest overall mortgage payment you could opt for our lender paid PMI option. This will allow you to have no monthly PMI included in your mortgage payment resulting in some of the lowest possible mortgage payments available!

Get Pre-Approved for a 1% Down Home Loan

To get started with our low down payment mortgage simply call a licensed loan officer at 800-555-2098 or request information below. You will supply some basic information to confirm you meet the income, credit and asset requirements for the program. If everything looks good, you will be given an Pre-Approval Certificate so you can start shopping for a home!

EXAMPLE DETAILS: Borrower contributes 1% down, lender contributes 2% of the loan amount up to $5000 for the down payment and the borrower is responsible for any difference to get to the required 3% down. The principal and interest payment on a $200,000 30-year Fixed-Rate Loan at 4.625% and 97% loan-to-value (LTV) is $1028.28 with 0 points due at closing. The Annual Percentage Rate (APR) is 4.866%. The principal and interest payment does not include property taxes and home insurance premiums, which will result in a higher actual monthly payment. Rates current as of 01/15/2018.