Tag: first time home buyer

Tips to Avoid Closing Delays when Buying a Home

Things to avoid when buying a home in Michigan.Mortgage Closings are stressful. Let’s not add to it!

Congratulations! You have found the home of your dreams! You have all of your documentations in order! You are ready to move in! All you have to do is close on your mortgage! But wait, did something go wrong that could potentially prolong your loan closing? Was it something you did? Was it something you could have prevented?

When something goes wrong and there is a delay in the close date it can be very disappointing and frustrating.  Unfortunately, we see this happen all too often when home buyers create delays on their own loans. Here are some tips that should be followed during the process to make sure you cause no closing delays.

RELATED: First Time Home Buyer in Michigan

Be accessible and keep in touch with your loan officer

Stay in touch! Do not go out of town and do not change your phone number.  Make sure you are available to all parties involved in your closing. When underwriters or title companies need documents and information they need them now!  So stay connected, check your email and listen to your voice messages.  If information is not given in a timely fashion your closing date won’t be either.

Look for incorrect information on your mortgage documents

Incorrect, misspelled or missing information is a huge problem during the closing process that could delay it.  It is important to check over all documents and information prior to closing.  Correct all information as soon as you notice it is not correct.  Finding out information is not as it should be at closing could delay the process for days.

So, stay connected with your resources and sort out all of the little things as they come – don’t wait until the end!

Things to double-check on your mortgage paperwork include: loan amounts, down payment amounts, interest rates, name spelling, social security numbers, previous addresses, employer information etc.

Do not change jobs, become “self employed” or quit your job

Doing this is a sure way to prolong the process of purchasing a home.  Underwriters require you to provide a month’s worth of paystubs during the process of buying a house.  Therefore, if you change your employment and/or income you will need to provide another month’s worth of paystubs which could lead closing to be pushed back more than six weeks.

If you become self employed, commission based or a contract employee that gets paid by 1099, you may need a 2 year history to prove your income. Changing to self employment will surely delay your loan closing.

Stay with your current employment and income throughout the entire process of purchasing your home.

Managing your Bank Accounts wisely

Do not do anything that could dramatically change what you have in your savings and checking accounts including: transferring large amounts of making large deposits into your bank accounts or making large purchases.

Just because you have to money in your account doesn’t mean you can afford to spend it. If your underwriting approval is based on your current statement balance, spending money by making large purchases could delay your loan closing.

How much you have saved is a big deal to lenders.  It tells them that you have enough for a down payment and that you will be able to pay your monthly mortgage payments.  Changing the assets in your savings and checking accounts could change their minds about you and your financial situation.

When large amounts of money are transferred or deposited a red flag goes up that is often seen by lenders.  This leads them to wonder if you have recently taken out an additional loan (or cosigned a loan) that they are unaware of – is your debt larger than what they thought?

If you are getting a gift for your down payment or closing costs, be sure to speak with your mortgage loan officer about the process that needs to be followed to use these funds. You will need to fully document the source of the funds and provide a letter stating that no repayment is required.

Try your hardest to keep your bank account relatively the same throughout the process and speak with your loan officer before you make adjustments.

Do not jeopardize your credit score

Keep your credit score the same as it was when you were approved for the mortgage.  If it changes it could change your approval status and your eligibility for the mortgage.

Do not take out more debt during this process!

So, try your hardest to keep your credit card balance(s) at a minimum – don’t max them out.  Don’t take out addition loans or cosign loans.  Don’t take out new credit cards and do not close old ones.  And of course, pay your bills on time.

Most Importantly – DO NOT GIVE UP!

There are many hills (some feel like mountains) to climb and many bumps avoid during the closing process.  It is stressful and sometimes frightening but don’t get scared!  Keep chugging along!  If you are unsure of what is going on ASK! Your loan officer will gladly explain exactly what you need to do to have a smooth closing.

There is light at the end of the tunnel – becoming a homeowner is part of the american dream!

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It’s your first home, don’t let credit hold you back!

buy-a-homeCredit is Crucial!

When you start thinking of buying a home one of the first things you should do is check your credit score.  Contact a loan officer at Riverbank Finance to get a free credit report (or get an instant credit report online now).  If you find that you don’t have good credit, you may not get the best interest rate available – let alone get a loan at all.

Either way, good or bad credit, focus on paying your debt down.  Pay on your credit cards and make sure you are paying all of your bills on time.  You do not want to be turned down when applying for a mortgage, so focus a lot of your energy on raising your credit score.  If you have been turned down in the past due to poor credit score raising it can enable you to be approved in the future!

What is a good credit score, you ask?

720 and above is considered a good credit score, 750-850 is considered excellent!  However, if you do not have a good credit score you might still be eligible for a mortgage.  We have home loan options down to a 560 credit score for FHA loans and have lower score requirements than many banks and mortgage lenders. Check with a loan officer at Riverbank Finance to see if you are eligible for a bad credit mortgage.

Related: FHA loans with a 580 credit score

Save when you can!

Future home buyers should make sure their bank accounts can afford to put a down payment on a house and  have enough additional money to pay the extra fees involved in the home buying process.  Check to see how much of a down payment will be for your dream house and save accordingly.

Budget, budget, budget!

Oh, did I mention to budget?

Buying a home can be very stressful.  Paying for it can be even more stressful – especially if your ways of living aren’t supported by your budget.  So be proactive about it!  Budget now so you won’t stress in the future.  When you budget ALWAYS consider the future, not just the present; what payment can you afford? What all will you have to pay for?

You know what assuming does . . . so don’t do it!

Do not look at your monthly mortgage amount and assume that you can afford your home.  A lot of other expenses should be considered when budgeting: utilities, amenities, taxes, day-to-day living expenses, etc.  This is a long term investment.  Therefore, your budget should be long term as well.

Remember, being a homeowner should be a rewarding and happy experience, so try not to set a budget that will make you stressed to the max.  Give yourself room to breathe – room to live.

Let the real fun begin!

It’s hard to budget when you aren’t exactly sure how much your future home will cost you.  So, look around for potential homes!  Narrow it down!  What city do you want to live in?  Neighborhood?  Street?  House?  The more specific you are the easier it will be to budget.

Use your resources.

Now, your budget will have to consider a variety of things: the type of loan, the loan amount, the interest rates, the length of time, etc.  These things cannot be known until you are approved by your lender for a mortgage on a specific home.  Talk to your loan officer about these things once you have found a house, they are there to help!  They can find the best loan and interest rates available to fit your situation.

Good luck!

Remember, Riverbank Finance is only a phone call or click away.  So don’t hesitate! Call us today with your questions or concerns.  We are always happy to help 🙂

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THINKING ABOUT BUYING A FORECLOSURE PROPERTY?

Buying a foreclosure home for sale

Foreclosures selling fast and at 20% Off

Finding a good deal on a home is not as easy as it used to be.  The housing market has started to recover and pick up steam.  Homes for sale are starting to receive multiple bids now instead of not receiving any bids.  The Nation Association of Realtors has recently stated though that a potential homebuyer can find a deal on foreclosed homes still or a distressed and that discount is averaging about 20% right now.  This is obviously very attractive the all potential homebuyers.

Foreclosures down 25% year over year from 2012

A foreclosure tracking company named Realty Trac, has recently stated in it’s February monthly report that there were 154,000 foreclosure fillings in February.  In this case a foreclosure filling is defined as any of: A bank repossession, a scheduled auction for a home, or a default notice on a home.

The important part of this foreclosure filling is looking at the specific numbers associated with a default notice.  Default notices are defined as homeowners who are 90 days late on their payment.  Once a homeowner becomes 90 days late on their payment mortgage contracts allow lenders to start the foreclosure process.  So default notices are important to track because it typically shows how many upcoming foreclosed homes there will be on the overall market down the road.  If there are fewer and fewer foreclosed homes ready to hit the market it’s safe to assume that the discount now available on foreclosed may become less and less in the future. With not as many ready made deals on the housing market this could further constrain the over all market.

The housing supply is shrinking 

Since late-2011, the U.S. housing market has charted a slow, steady recovery. Low home prices and low mortgage rates, plus the availability of low- and no down payment mortgage programs have helped to build a strong foundation nationwide.

Some cities have shown massive price gains, while some, show little gains at all. Most U.S. markets, though, are benefiting from a combination of a stronger national economy, of rising costs to rent, and of general consumer optimism.

Another telling point : More people believe that “now is a good time to buy” as compared to those who believe “now is a good time to sell”. Buyers see bargains as compared to where home prices may head. Sellers, by contrast, see a light at the end — if they can just wait long enough to list.

The result has been a drop in the supply of homes for sale. At the current pace of sales, today’s entire stock of U.S. home resales and new construction homes would be sold out by July 31, 2013.

Where are all of the Foreclosures

Foreclosures generally area double edged sword.  On one side, they are a bad indicator for the overall economy in that area. On the other side, plenty of foreclosures available can help spurn first time home buyers or real estate investors to get off the fence and buy.

If you may be interested in buying a foreclosed home let me help you figure out where a large supply of foreclosed homes are. Realty Trac has recently stated that the state with the most foreclosed homes in it is Florida (13,042).  Florida has about twice as many foreclosed homes then the next state which is California (6,549). The third state on the list is Illinois and this state has 5,106 new foreclosure starts.And, of course, like all else in real estate, foreclosures are local. In some states, foreclosures are more common than in others.

Here are the states with the lowest amount of  foreclosed homes Vermont, Montana, and Washington, D.C.

Can I afford to buy a Foreclosed Home?

Homebuyers have many options to put low down payments.  One popular mortgage product for first time homebuyers is a FHA loan which only requires 3.5% down payment.  Other popular options which include no down payment are VA or USDA loans.  On other popular mortgage loan for first time homebuyers is 3% down Conventional loan.  If you have thought that the time is right to buy a foreclosed home call Riverbank Today at 800-555-2098.

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Buying a House: Mortgage Basics

Buying a happy home.What you need to know if you are buying a new house

One of the most important things a new home buyer can do is get as much information as possible to help aid them on their home buying quest.  Understanding what to do can give you a real edge on the sometimes difficult to navigate real estate market.  I home buyer needs to understand the market and their new mortgage.  Learning about these two items can really help keep money in your wallet down the road.

What mortgage type is the best for me?

In today’s quickly changing landscape there are many types of loans available.  Even though there has been a recent restriction in credit new homebuyers can still receive mortgage with favorable terms and even no down payment.  One of the first things you need to do is talk to a mortgage lender who can help explain to you how new mortgages work and help answer your questions.  They can help determine what type of mortgage best fits you but in the end you have to make your own decision.  A mortgage lender that gives you options is the one you want to find.

How much home can I afford?

After you have figured out what type of mortgage works best for you now and in the future you will want to focus on how much you can afford.  Your mortgage company should be able to figure this out once they have reviewed your income.  The lender will divide your income by your total debts which show up on your credit report and then make that determination.  After you know how much you can afford then you will be able to start looking at homes that fall underneath that loan amount range.  It is important to note that just because the guidelines at the mortgage company state that you can afford does not mean that you should actually borrow that much.  You have to look into your own debts that you currently have and job stability and then make a decision form there.

Know your mortgage options

There are many different types of loan out there and each one has their own benefits.  Typically if you have a large down payment of at least 20% you may want to consider a convention mortgage.  These type of mortgages come with many different options but typically have the lowest payment with this situation.  You can borrow up to $417,000 in most areas with this type of loan but some high cost areas allow you to borrow up to $625,000

Another popular mortgage option is a FHA loan.  These loans are government backed mortgages and because of that they require fewer down payment money.  Just like conventional mortgages there are different terms available but they do require mortgage insurance which can be costly long term.  They are a great mortgage option for a first-time home buyer with small down payments.

There are other mortgage options that require no down payment.  One of those loans is a VA loan.  These loans are only reserved for our veterans.  There is no down payment required with these loans but they sometimes require mortgage insurance requirements.  The other now down payment option is through a USDA loan.  The work similar to VA loan but they have income limits and the location of the house has to be in an approved area.

You cannot have to much knowledge

The more you know the better off you will be in the long run.  If you think of mortgage questions make sure you write them down so that you can go over them with your mortgage professional at Riverbank Finance.  Call us at 800-55-2098.

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First Time Home Buyer Help

Help for Buying a HomeIf you haven’t seen our previous blog posts regarding tips for first-time homebuyers, here’s what we have reviewed so far. What house you can afford, selecting the right home, finding a real estate agent, loan pre-approval process and bidding on your first home. Be sure to visit all of those articles for some great tips for you first-time homebuyers.  Onto the next step though, which is sorting out your priorities.

Purchasing your very first home can be stressful but also fairly rewarding once it’s finally in your name.  On this trip though, it is imperative to keep your priorities straight.  What I mean is that we all have responsibilities.  All of which require their-own levels of attention to be properly taken care of.  So you have to be sure you don’t get wound up in the game of house hunting and forget to meet your other responsibilities on the way.

Current bills, I’m sure you have plenty without being a homeowner.  Car insurance, maybe rent, phone bill, food, gas, pet food, your job.  All of which almost become second nature to us as we encounter the same bills and the same responsibilities month after month, year after year.  That’s why “high stress” times of your life like marriage and purchasing a home are considered “high stress” events.  Because along the ride you’re so concentrated on the end goal many people forget to pay one measly bill, forget one meeting, something along the way occurs that makes their stress levels skyrocket.  That’s why using outside help could be one of the best things you could possibly do.

Some people don’t think about it but as a buyer you have the right to select a real estate agent to help you along the way.  There is help out there beyond an agent though.  Here at Riverbank Finance, we’re capable of linking you with great local agents and talking with you about any of the stresses setting up your mortgage may bring.  So if you’re a Michigan native looking to purchase your very first home, you can contact one of our loan officers at 1-800-555-2098 or fill out the email form below.

Home buying help?

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Bidding on Your First Home

Placing a Bid on a HomeWe recently covered the importance of selecting a real estate agent and becoming pre-approved for a loan.  The next step is to place a bid on the house you’d like to call “home.”  There are some things you need to first consider before making a bid, as you want to be sure you make an appropriate bid on the house.

Up first are your rights as a homebuyer.  One great benefit you have as the buyer is the right to have an inspector investigate the house.  By doing so, you’ll be able to establish a proper, initial bid.  Now yes hiring in your own home inspector will be additional fee but doing so could potentially help you save a pretty penny when making your bid.  You should also know that virtually everything is negotiable when buying a home.  Things like the closing costs and even appliances can be discussed to help save you even more money.

The next step is to sit down with a real estate agent and do your homework.  Meaning you need to consider the value of the area in your initial bid as you could end up with a great home.  If it’s located in a bad area or even a bad school district, you could easily end up bidding far more than necessary.  Luckily, this is where the real estate agent comes in to help take off a lot of pressure off your shoulders.  Part of their job is to research the area and provide you with all of the necessary information.

When making the initial offer be sure to consider additional items; would you like the owners to pay for the closing costs?  How about any home repairs needed?  Like a broken garage door or maybe the furnace needs to be replaced.  All things should be considered as your end goal is to save as much as possible on your potential new home.

Be sure to give your self some breathing room when making that first bid as well.  You don’t want to max out your price range right away, as the owners are likely to counter offer with a higher bidding point because they want to make money too.  Lastly you need to be patient.  Playing the waiting game is a big part of bidding on homes.  Unless a deadline is specified for the homeowners to come to a decision, they have virtually all the time in the world.  So if you have to wait a few business days, then so be it.  During that time it would be wise to maybe browse a couple other homes just in case a deal cannot be made.

With all things considered, bidding on a house can be a pretty big step so if Riverbank Finance could help you in anyway.  Be sure to let us know.  Need a recommendation regarding an inspector?  How about pre-qualification for a mortgage?  We can help with that and then some so give us a call at 1-800-555-2098 or fill out the email form below.

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What House Can You Afford?

Answer what home can I afford?First-time home-buyers encounter an onslaught of hurdles before they reserve the right to say they truly are home-owners. That is why Riverbank Finance is introducing a new blog series to explain what you can do in-order to prepare yourself for purchasing your first home. Enough jib-jab though. Let’s jump right into things with our very first article about home-buying basics, “What House can You Afford?”

The first step is to gather a few pieces of information that we need first before we can calculate what type of home you can afford.

  • Gross Annual Income
  • Mortgage Rate
  • Monthly Debt (ex. Student Loans & Credit Card Payments)
  • Down-Payment Amount
  • Annual Property Taxes
  • Annual Homeowner Insurance

Once you have gathered the above information, there is a very simple way to calculate the type of home you can afford.  Right on the Riverbank Finance website you can find a great calculator to figure out exactly what home you can afford. Just click on the following link to be directed to the calculator: Mortgage Calculator.

This will help you get a start with what home prices you should be searching for however to figure out the exact amount that you can be approved for be sure to speak with a loan officer at 1-800-555-2098.  They will be able to help you calculate your pre-approval amount.

Be sure to check back to our blog for the next step in the process towards you becoming a first time home-owner.

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