Tag: housing market

Housing Inventory Reaches 18-Year Low

Housing Inventory Reaches 18-Year Low

The number of active listings dropped again last month to the lowest level since 1999, according to the National Association of Realtors.  Only 1.65 million homes are available for sale, which equates to roughly 3.6 months of inventory nationwide.  This figure is downward from the 3.9 months of inventory reported in December 2015.  A healthy, balanced market should have about six-months of inventory.  See NAR’s infographic below for additional statistics on national home sales.

Housing Inventory in West Michigan

Here in West Michigan, the situation is even more dire. According to statistics from the Grand Rapids Association of Realtors, we closed out 2016 with only 1.7 months of inventory. This means that if no additional homes entered the market for sale, at the current sales pace, all existing listings would be scooped up in less than two months. As shown by the graph below, inventory levels in West Michigan have been on a steep decline for the last decade.

You may be wondering, what is causing the housing shortage? Experts blame a combination of rising demand and stagnant new home construction. Single-family housing starts are growing, but only at a snail’s pace. Builders are still struggling to operate at pre-housing crisis levels, due to the loss of skilled trades and increased labor and materials costs.

What does this mean for the upcoming Spring real estate market? Prospective buyers can expect cutthroat competition—multiple offers, over list price, in less than 24 hours, without contingencies. There won’t be time for second showings or “sleeping on it”. And shopping for a home before being pre-approved? Don’t even think about it!

What about the remaining homes for sale?  Why aren’t they selling?  Many times, it is due to the condition of the home.  Most buyers do not have the time, desire, or cash to remodel a home top to bottom.  Enter renovation mortgage programs!  Renovation mortgage programs such as the Homestyle Renovation or FHA 203k programs allow borrowers to purchase and remodel the home of their dreams in one fell swoop.

How do Renovation Loans work?

Logistically speaking, a homebuyer, after agreeing to purchase a home for a set price, attains quotes from contractors to have renovations done. An appraisal of the home is then done, taking into account the home’s value once renovations have been completed. You can then borrow up to 96.5% of that appraised value. As soon as closing takes place, funds for renovations are placed in an interest-bearing escrow account and construction begins. Once renovations are complete, a final inspection takes place, the contractors are paid out of the escrow, and you move in to your beautifully renovated new home!

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To apply for a Mortgage or Refinance call Riverbank Finance today at 1-800-555-2098.

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7 Mortgage Myths Debunked

7 Mortgage Myths Debunked

It is no secret that the home buying process is a long and complicated one. Getting started can be intimidating and confusing, so we’ve compiled a list of common mortgage myths we hear from our clients. Here, we’ll break them down and explain the truth about mortgages, in plain English.

1. Having my credit pulled will drop my credit score

Many prospective buyers are hesitant about having their credit pulled because they fear it will destroy their score, but it has far less affect than you’d think. Having your credit pulled for any reason may have an impact on your overall score, but it is usually very minor.

Did you know, you actually have many different types of credit scores? Depending on who accesses your credit report, from which bureau, and for what purpose, a different scoring model is reported. Mortgage inquiries are treated differently than other credit inquiries because you can shop around for the best rate and terms. The credit bureaus do not penalize consumers for rate shopping, so any mortgage inquiries that happen within the same 45 days are treated as only 1 inquiry on your credit report.

2. Credit Karma says my score is…

Popular sites like Credit Karma and Free Credit Report are great tools for monitoring trends in your credit report, but are simply not reliable sources for determining credit eligibility. We’ve compared Credit Karma’s “scores” to actual scores we’ve pulled, and seen as much as a 100-point swing in either direction—whoa!

Don’t necessarily trust information you obtain from these websites—talk to a mortgage loan officer! In addition to providing you with an accurate credit rating, your loan officer can provide insight into what factors may be affecting your score, and what you can do to improve it.

3. I haven’t been at my job for 2 years yet

If you haven’t been in your current job or position for the last two years, don’t worry! As long as you have had continuous employment for the last two years, you’ll still qualify. Any gaps in employment will have to be detailed with a signed letter of explanation, but do not necessarily doom your chances of being pre-approved.

4. I need to payoff and close out my credit cards first

For some unknown reason, many of our clients believe they should have all other debts paid off before buying a home. While this is a noble idea and paying off debt is rarely—if ever—a bad idea, closing revolving accounts will actually do more harm than good! Pay off—or pay down—as many accounts as you can, but do not close out your credit cards. Having unutilized credit positively affects your credit score and your borrowing profile!

5. I don’t have the funds for a down payment

It is a common misconception that borrowers must have 20% to put down on any home that they want to purchase—not to mention closing costs—but that simply isn’t true anymore. There are many mortgage programs available today that did not exist a decade ago. For example, the FHA now offers mortgages with as little as 3.5% down, and both USDA and VA offer programs with no down payment at all!

6. Owning is more expensive than renting

It is almost always cheaper to pay a mortgage than rent a comparable home in the same area. Owning a home also allows you to build equity. When your lease ends on your apartment, you are welcome to leave, but the rent you paid is long gone. Buying a place of your own allows you to build your own wealth over time, not your landlord’s.

7. My bank will give me the best deal

Many borrowers, when thinking of purchasing a home, start with their trusted bank or credit union first. It makes sense, right? They know you, you’ve banked with them for years, they already have all of your personal information, it should be easy peasy, right? Wrong! Loan guidelines are the same for everyone, no matter which bank or lender originates the loan. Your bank won’t be able to cut you any special breaks or give you an extra low rate, just because you’ve been a member for a while—even if they want to!

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To apply for a Mortgage or Refinance call Riverbank Finance today at 1-800-555-2098.

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Conforming Loan Limits Increased

As home prices across the country continue to rise, the Federal Housing Finance Agency (FHFA) and the Federal Housing Administration (FHA) have announced increases in conforming loan limits for 2017.

For the first time since 2006, the FHFA has increased the maximum loan limit for conventional loans through Fannie Mae and Freddie Mac from $417,000 to $424,100.

Related: 2019 Conventional Loan Limits in Michigan

Conventional Loan Limits Increased

Conforming loan limits for Fannie and Freddie are determined by the Housing & Economic Recovery Act of 2008, which requires that after a period of declining home prices, the baseline loan limit may not rise until home prices return to pre-decline levels. Until this year, average home prices remained below the level of those in the third quarter of 2007—considered the pre-decline price level—so the baseline remained the same. According to the FHFA, the Home Price Index (HPI) value for the third quarter of 2016 was approximately 1.7% above the value for the third quarter of 2007, meaning the baseline loan limit will increase as such.

Related: More about Conventional Mortgage Loan Limits and FHA Mortgage Loan Limits

FHA Loan Limits Increased

Less than a week later, the FHA announced a similar loan limit increase for a whopping 2,948 U.S. counties in 2017. Only 286 counties will remain at 2016 levels. Here in Michigan, the FHA conforming loan limit will rise from $271,050 to $275,665. It will apply to cases assigned on or after January 1st, 2017.

These loan limit increases may seem marginal, but point to a better future. The FHFA and FHA recognize that home values across the nation have recovered, and have responded with an opportunity for homebuyers to increase their buying power.

Some financial institutions have speculated that this 1.7%, $10,000 increase to the conventional loan limit could lead to 40,000 additional originations with $20 billion in loan balances across the country.

Related: One Percent Down Conventional Loan

2017 Loan Limit Summary

  • FHA Conforming Loan Limit $275,665
  • Conventional Conforming Loan Limit $424,100
  • USDA Conforming Loan Limit $424,100
  • VA Conforming Loan Limit $424,100 with zero down payment

Have a specific scenario you’d like to run past us? Give us a call to speak with one of our licensed loan officers. We would love to recommend the best loan program for you and your situation.

Get More Information

To apply for a Mortgage or Refinance call Riverbank Finance today at 1-800-555-2098.

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Five Reasons to Buy a Home in the Winter

5 Reasons to Buy a Home in the Winter

Baby, its cold outside—and its only going to get colder. Before you put your home search on hold for the next four months, check out these benefits of buying a home in the winter!

1. Less Competition

During the winter months, there are less buyers shopping, and therefore less offers to compete with. While other buyers are traveling for the holidays, tying up year-end projects at work, or bundling up at home, you’ll get the jump on the next hot new listing. There’s also less of a chance you’ll get caught up in a bidding war, keeping your purchase price low.

2. See the Home at its Worst

During the warmer months, it may be more difficult to inspect certain essentials like HVAC and windows. You’ll get a better idea of how a house holds up when the weather is at its worst. Is the basement dry? Are the windows drafty? Are there frozen pipes? How often does the furnace run? These questions provide you the unique opportunity to see how a home tolerates Michigan’s worst weather.

Related: Include Renovation Costs in your Mortgage

3. Sellers are Motivated

Just as buyers are less likely to begin their house hunt in the winter, sellers are less likely to put their home on the market during the winter months. This means winter sellers fit into one of two categories: they’re trying to sell a property that didn’t sell during the peak real estate season, or they’re eager to sell quickly and didn’t care to wait until the Spring. Either way, winter sellers are more likely to negotiate terms such as closing costs, possession time, and most importantly— the sales price.

4. Get the VIP Treatment

Now, let me preface this by saying that any Realtor worth their weight will work hard for you no matter what time of year it is—but the truth is you’ll be receiving responses to your emails much faster in the winter months than you will come April. They’ll be juggling fewer clients in the cold and snow, and have more time on their hands to focus on finding you your dream home.

5. Get Settled Before Spring

I don’t know about you, but my spring and summers are busy. After a long Michigan winter cooped up inside, the last thing I want to do is waste my warm sunny weekends moving, unpacking, painting, or remodeling. Buying a home during the winter months allows you to finish off those first few projects before vacations, weddings, festivals and trips to the beach fill up your weekends.

So there you have it! Don’t let the impending frigid temperatures keep you from finding your dream home this winter. A true Michigander wouldn’t be scared off by a little snow, would they?

Have a specific scenario you’d like to run past us? Give us a call to speak with one of our licensed loan officers. We would love to recommend the best loan program for you and your situation.

Get More Information

To apply for a Mortgage or Refinance call Riverbank Finance today at 1-800-555-2098.

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The Housing Market is Recovering Thanks to Expanded FHA Guidelines


Major economic growth has happened within the last few years.  This growth has allowed the housing market to build back up from the Great Recession – bringing home prices up as much as 13% in the past year!

This has help to aid many underwater homeowners to the surface – that is, if they have been able to sell their homes.

Home prices are going up, equity is increasing, but lenders are becoming stricter than ever! Mainly when it comes to credit scores on conventional loans.

Lenders want to ensure their safety, that is, they want to make sure that if they lend to you they will not take a loss because you were unable to make your mortgage payments on time.  Therefore, they take a look at your credit history to make sure you are reliable for a loan.  Nowadays, if you have a less than perfect credit score most lenders will turn you away – scared that you will not be able to fulfill your mortgage obligations.

And so, home prices are on the raise, it would seem as though the economy is too.  But that isn’t the entire truth – yet.

Because of uncertainties lenders have about who they lend to they have begun to become stricter about who they let borrow.  They adapted their guidelines and changed the minimum credit score needed to be eligible to get a mortgage – it has risen.  This has caused many potential mortgage borrowers to be turned away; people who used to be seen as creditworthy are now being turned down for mortgages.

The U.S. Government (FHA and FHFA) has a problem with this trend with the large banks.

The government believes that creditworthy individuals should be able to take out a mortgage and that the minimum credit score should not have changed.  Individuals with good credit, before many lenders raised the minimum credit score needed, should be able to get loans.

As of this month the U.S. Government is making changes to strengthen the present housing market, and to build and strengthen the future economy. The FHA has committed to helping individuals receive loans who meet their credit guidelines.  These loans can be given without the distress of penalty for banks and lending institutions.

According to Ellie Mae the average credit scores on loans closed in April 2014 was 726. Many lenders have increased their minimum credit standards to attract only high credit borrowers. Riverbank Finance LLC has used this as an opportunity to offer loans to the undeserved lower credit score borrowers offering FHA loans down to a 560 credit score.

Since this, some lenders have reduced their minimum credit score needed for eligibility, therefore, more people will be eligible for mortgages.

Hopefully this will help to make the economy strive!

More Information on FHA Mortgages

For more information on low score FHA mortgage loans request information below or call Riverbank Finance LLC at 1-800-555-2098.

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The Housing Market is on Fire with Half of homes Selling in a Month!


Home Sales are Fast and Furious

in the calendar month of June, homes sales totaled more than 5 million, According to the National Association of REALTORS®  on a seasonally-adjusted, annualized basis and shows no signs of slowing.

More than half of homes that were listed through the MLS system were sold within 30 days or roughly one month.  The key is pricing your home right and preparing it to sell. According to Realtors that were interviewed in Michigan, if a house is priced right and listed, it will sell quickly.

Existing Home Sales Approach Recent Record Highs

For the aforementioned month of June, 5.08 million homes were sold which is an increase of 15% from one year ago.  This sharp increase in recent home sales has pushed the home sales numbers to near record highs. The panic to buy not before rates rise and motivation to jump on houses before they are sold has set the real estate market ablaze. The key to buying in this environment is to be prepared!

Do not wait for the accepted offer to start looking for a mortgage. Start your home buying process by speaking with a licensed loan officer and reviewing your goals. Select what mortgage type will be the best for your situation and get a home loan pre approval.

Get a Mortgage Pre-Approval Now and Act Quick

For today’s home buyers, it’s important to be purchase-ready. Homes are selling quickly and home values on are the rise. Furthermore, since late-Spring, each passing month has brought higher mortgage rates which has raised the cost of homeownership. With your pre-approval in hand you can confidently move quickly on a home offer and buy the home of your dreams.

Today’s home buyers should take a look at all available mortgage options, and secure themselves a pre-approval letter. Lenders provide this service for free, and with no obligation. You can get started online anytime.

Apply for a home purchase pre-approval today!

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Home Prices to Rise in 2012

Higher Home ValuesSome more great news has just been released in regards to the housing market. No longer are the days of dark clouds looming overhead. We now have a clear-cut indication that things are improving (all be it slowly, but still improving). Overall home values are expected to begin rising as early as the end of 2012 and the total amounts are bit higher than most had expected to hear about.

Financial analytics company, Fiserv, recently released their findings on the housing market and the direction it’s headed.  They found that homes will gain an average of 4% value each year, for the next coming five years. Meaning your home is expected to rise a total of 20% in value over five years. Some great news for homeowners as many people have been shied away from selling their homes all because of the low values of today’s market.

Find how much your home is worth by using our valuation tool Michigan Home Value Estimator.

Further numbers showed that the short-term forecast doesn’t look amazing as home values for 2012 are expected to drop 0.8% from where they were last year. This means we have not yet reached rock bottom home prices just yet. Once we get closer to 2013 however, we should start to see the trend of lower home values finally reverse.

This does come across as a double-edged sword though. As home values begin to rise and sellers begin to feel more comfortable in putting their homes on the market, more buyers will begin to become discouraged by the rising prices. It’s quite obvious that the housing market will remain a buyer’s market for a couple years yet to come.

So to those of you looking to purchase a home before prices rise, now may be your last chance!  With the combination of historically low mortgage rates and rock bottom home values, now it the most affordable time to buy a home in Michigan. To get pre-approved to start shopping for a home contact Riverbank Finance before you the lowest home affordability in history. You can call a licensed loan officer at 1-800-555-2098 or complete the form below.

Buy a Michigan Home before Prices Rise

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Home Values at 10 Year Low

Low Home Values2012 began with quite a bang in the housing market but it was far from a good thing for current homeowners.  It was reported back in January that overall home values were down for the fifth straight month.  Which brought home values down to their lowest point in about ten straight years.  The average home value fell 0.8% in that month alone.  Even more depressing is that home values are down 3.8% from about one year ago.  This isn’t all bad news, at least depending on how you look at the situation.

Sure homeowners are being hit hard and unfortunately there is no quick fix to instantaneously raise your home’s value.  On the flip side though, homebuyers are in the driving seat when it comes to today’s housing market.  With values at a ten-year low, even the thought of buying a home should prompt people to purchase a home but that is just not the case.

The issue is that people see the housing market as one giant risk.  Everyday we hear and see signs in regards to the millions of homes that are “underwater.” The other issue is that foreclosures are on the rise and nothing could scare a homeowner than the risk of losing their beloved home.

Refinancing an underwater home in Michigan

We’re at a strange point right now as things look great in certain sectors while others look quite gloom.  People seem to be hesitant to purchase homes but yet many builders are gearing up to begin new construction projects.  Real estate professor Ken H. Johnson from Florida International University believes the market will improve thanks to the improving economy but it will definitely take time.

With home values looking as if they’re going to linger at their current values for some time yet.  Why not take advantage of the market whether you’re a homeowner or if you’re looking to buy?  Thanks to the incredibly low mortgage rates, we can help you Michigan homeowners out there by refinancing into today’s extremely low rates.  For those of you looking to buy property within Michigan, we can also help you by locking in pretty little loan with a bow on top.  Either way, give one of our loan officers a call if you have a Michigan property: 800-555-2098.

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National Housing Market Status

Current Status of the Housing MarketHome many times have you heard on the news or read in the paper of the past five years how the housing market is struggling?  How many times have you joked with friends and family about the market when inside you’ve though how dark of a time the market is in?  Now yes, the housing market has definitely seen brighter days in the past.  There are those who have said the markets will never recover to the point they were once at before.  If the history of the housing market is any indication though, things will not only return too normal but they’ll surpass the previous high-points.

A company named CoreLogic conducts a thorough market search to give an idea of what the housing market will look-like in the near future.  Their most recent report, released Wednesday, January 25th.  The report states that 2012 will be the beginning of a turnaround for the market.  It’s estimated that home sales will improve 2-to-5 percent, year-over-year.  Now yes these aren’t massive changes in numbers but it’s definitely positive news that we haven’t seen/heard in a long time.

What made this happen though?  What’s making the housing market re-heal essentially?  Well in a nutshell, it was the struggling economy that has begun to reshape the housing market.  Really this all started with low prices for random everyday goods.  The economy crashes, which causes people to hold onto their money.  When people hold onto their money, prices drop because companies aren’t making sales.  Prices eventually fall so-low that people slowly begin spending again.  With this extra spending, and in-large part due to the record setting Holiday Season we had, people began gaining confidence.  That is, confidence in the economy.  As more money s fed back into the economy we see all markets begin to improve.  Which means the housing market will begin to improve as well.  With people now back in “spending” moods, we’ll see many take advantage of extremely low home-prices and mortgage rates.

It’s weird how things work though isn’t it?  We start with a moment many economists believed we would encounter a greater hardship than we did in the Great Depression.  So because of these types of statements, it put fear into many American hearts.  Now flash-forward barely one-year and were seeing things begin to improve.  We live in a strange-strange world, which can be quite daunting at times especially when you’re attempting to enter the housing market for the first or even third time.  So if you’re one of the people planning on venturing into the housing market, you should first contact us to be your guide in a sense to get things started.  We’re available by phone at 1-800-555-2098 or you can fill out the email form below.

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