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Four questions to ask to get that perfect mortgage,

1. What type of mortgage is best suited for my long term or short term home ownership?

The old saying is that “If you fail to plan, plan on failing”. Although you may not “fail” at your mortgage, unless you stop making the required payments per month, it is still a great question to ask of your mortgage lender, bank or broker. Most people fail to realize that a mortgage is not always about the payment per month. The perfect mortgage lies in your plans for the home and the family. Some mortgages may be set up for shorter term goals and some for longer term goals. For example, if you are new to the area and buying a home, and you only plan on a very short home ownership, then yes, maybe a great low adjustable mortgage will help lessen the monthly costs. Another example is paying off the home in a quick time frame, especially if retirement is just around the corner. Short term mortgages like the 10 and 15 year are at an all time low and can pay off a mortgage debt with a lot less interest than the “good ole” 30 year fixed rate. Planning a good mortgage is crucial to home ownership.

2. What is the current BEST interest rate I can obtain and when can I lock that rate in?

This is usually the first question most borrowers will ask. However it’s also the one you may get the most discrepancy and variation on from bank to bank, lender to lender and broker to broker. Keep in mind that interest rates can and may vary every day due to small or large changes in the economy and stock markets. When you have done your research and are confident that you have selected the right lender, bank or mortgage broker to close your home mortgage, trust they are working for you and when you have together decided on the right rate for you, lock it in. Some rate locks are good for 30, 45, 60 days or even longer. Make sure you know the terms of the lock in and most importantly, will the lock offer an adjustment period in case the market drops suddenly. Some lenders or banks offer a FREE “float down” which means if the market falls lower, you may get the lower rate.

3. What are my exact closing costs for getting my new mortgage?

In January of this year, the federal government introduced the “new” and revised Good Faith Estimate that must be used by all banks, lenders and brokers. Unless you were in on the drafting of this new “GFE” you positively will be confused. In short, the new GFE is very complicated and has more words and legal terms on it than the first draft of the Declaration of Independence. To help stop the confusion of the new forms and rules, ask your mortgage lender to provide a simple list of ALL the anticipated closing costs on an itemization sheet. Also, ask them what can change and be assured, most quoted costs must match when you get to the closing table of your new mortgage – so keep your original Good Faith Estimate and compare it to your settlement statement. We have seen it time and time again that the closing happens and the terms and costs of the loan have changed substantially, leaving a very upset feeling in the borrower’s stomach at the closing. Compare this “simple” breakdown of fees with others. You will be amazed at the potential differences.

4. How long do you need to close my new mortgage?

There have been so many changes in the last few years with all the new lending requirements placed on mortgage lenders and banks that sometimes it may seem to take forever to close a mortgage. Asking in advance how long it may take, will set you up for success when planning a move to the new home. The average closing time now is 45 days from application to closing. Whatever you do, don’t make the mistake of scheduling the moving truck to deliver your furnishings and belongings before you know the actual closing date.

We have all seen the demise of the banking world as it pertains to mortgage lending throughout the entire U.S. Not too long ago borrowers could “state” their income, have zero down payment, and could buy way more than they could afford. It took a while, but that “alternate lending” style and the push for more mortgages, caught up to us all. Now borrowers wonder how will I ever get a new mortgage with all the new restrictions that came about in the recent years. Well, there is hope.

Pride myself in keeping up with current market conditions and mortgage industry guidelines. I will analyze your current mortgage, housing values in your area, along with the cost of reference ensuring it will save you money to do so.

If you have not considered refinancing or have considered refinancing but haven’t chosen to pull the trigger I would say “Don’t hesitate”. These are the lowest rates will ever be and if you miss this opportunity you could be losing hundred, even thousands of dollars. Borrowers who are refinancing tend to be those who need it least.

Good news for Michigan!  Once again we are reporting a decrease in unemployment and an increase in jobs - at least for the West side of the state.  While it's true Michigan manufacturing is on the decline, industries such as service and health care are on the rise.  This is especially true for the greater Grand Rapids area.  We have seen a rise in for the past two quarters in home sales.  That's the good news.  The great news is it is still a buyers market!  If you have been looking for a home and want to do some research on your own before contacting a realtor check out the Home Scouting Report.  It brings your search to you!

While we have experienced the fall out from risked based mortgage lending, survived the scare of the foreclosure market, seen home sales on the rise, we are still experiencing changes in the conforming mortgage loan market.  Here are a few items to keep in mind when deciding to purchase your dream home:

Mortgage rates are not defined by the Prime Lending Rate.  Mortgage rates are driven by the 10 year bond market.  If stock rates drop, investors usually put their monies into a more secured market such as bonds.  This will increase the bond interest rate and consequently increase mortgage rates.  If you see a rise in the stock market, investors will pull their funds from the bond market causing interest rates to drop and therefore, mortgage rates to also drop. 

Rural development allows repair funds to be escrowed.  However, the new rule is not only 1 1/2 times the highest of two bids.  The borrower must now escrow at least the 1/2 while the seller can still escrow (or conceed from the proceeds) the 1.  

FHA is not what it used to be!!  FHA, a government backed mortgage loan, has developed their program to be consistent with conforming mortgage loans.  A borrower must have 3% down payment but can receive this as a down payment assitance from the seller.  Rates are competitive with standard industry rates.  IT'S A GREAT LOAN FOR ANY BUYER! (most lenders require a minimum 580 credit score - but ask for details!!!!)

Conforming mortgage loans are now requiring in most cases a 5% down payment.

Just a few tid bits to keep you in touch with what is happening in the mortgage industry.  Please feel free to email or call me with any questions.  My hope and desire is to educate you in making the best possible decision for your financial future!   

Spring 2008 has finally arrived!  It's a great time to be prequalified for your mortgage dream home!  For me, personally, it's not just a mortgage it's a road map to your future.  I take my clients financial well being very seriously.

My education from working years in a financial insititution approving consumer loans, training in budget counseling, credit counseling, and financial planning together with my desire to help borrowers make the best financial decisions has helped to create a "mother" instinct when working with you, my borrowers.  I take a personal vested interest in making sure you understand the mortgage process from start to finish. 

Today's market, despite what the media may say, is active and growing steadily.  Yes, there may be foreclosures as a result of borrowers not being well informed in their decision processing or taking on larger debt than they should have, but rest assured the mortgage market is climbing.  With mortgage rates still holding steady in the 6% range it is still a great time to look for that perfect dream home you have been waiting for.  (12 year average being around 9%).  It's important to understand that mortgage rates are not driven by the prime lending rate and change on a daily basis - sometimes hourly!  Having a trust mortgage professional such as myself to watch the market for you is essential. 

If you have any questions or want to crunch numbers, please do not hesitate to contact me.  I am more than happy to assist you through the entire mortgage process - and that begins at understanding.