Category Archives: Mortgage News

6 Ways to Save Money for Your First Home

savings jar filled with coinsFor many first-time home buyers, the idea of a 20% down payment is terrifying. It’s one of the biggest obstacles to homeownership. Maybe you want to own a home some day, but the thought of saving up thousands of dollars for a home purchase has deterred you from seriously considering it.

Believe it or not, it is possible to save enough money for a down payment and make your dreams of homeownership a reality. Here are just a few of the ways that you can start saving.

1. Track How Much You Spend Now

When saving for your first home, you’ll need to stick to a budget. Awareness of how much you spend can help you figure out where you can cut your costs. Consumer.gov outlines a few tips for creating a budget here.

2. Determine What You Can Afford

home buyer tracking financesEven if you don’t plan to buy a home for a few years, figuring out how much you can afford will make your savings goal more concrete. Don’t forget to include taxes, insurance, utilities, and maintenance in your monthly payment calculations. Here is an affordability calculator to help. Continue reading

Understanding Home Mortgage Acronyms

Mortgage Acronyms – OMG!Mortgage Calculator and Cash

Completing the mortgage process can be a daunting experience, especially for first time home buyers. Banks seem to use an entirely different language than the rest of us. Chances are you are already familiar with some common banking acronyms – DDA, ATM, ACH. We’ve described some others below that you may not be familiar with, and hopefully this will help you on your home buying journey.

PDTI

This is your personal debt to income ratio, or the ratio of your monthly debt payments (PITI/mortgage/rent, credit cards, student loans, auto loans, etc.) to your monthly income before taxes. While the preferred ratio varies by lender, it is common for banks to want a PDTI of 36% or less. This leaves plenty of room for income taxes and living expenses (utilities, clothing, food, etc.) each month.

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Can You Purchase a Home Even With Student Loans?

student on laptopAs more millennials are preparing to buy a home, one issue is making it difficult for many — student loans.

The Project on Student Debt calculated that just about 7 in 10 college graduates in the Class of 2014 had student loan debt, and on average each student had about $29,000 in loans.

With mortgages often amounting to well over a hundred thousand dollars, many first-time home buyers may be asking whether they can even qualify for financing with their student debt.

So, is it possible to buy a home even with thousands of dollars in student loans? It depends.

What’s Your Debt-to-Income Ratio?

It all comes down to your debt-to-income ratio, or what percentage of your gross monthly income goes toward your total monthly mortgage payments.

Lenders recommend a debt-to-income ratio no greater than 36%, with no more than 28% of your monthly income going toward paying off your mortgage. As an example, someone who earns $50,000 in a year and has $1,500 in monthly debt payments would be right at the 36% recommendation.

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“Know Before You Owe”: How New Rules Could Impact Closings

house icon on grassIf you’re a home buyer, there have been recent changes to the closing process that you should know about.

New regulations went into effect October 3rd, providing new loan disclosure forms that are designed to help you better understand the terms of your home mortgage before you close on your new home. That means if you applied for a loan on or after that date, you will receive the easier-to-understand forms.

What You Need to Know About the New Closing Disclosures

To summarize, these new rules combine mortgage loan disclosures from both the Truth-In-Lending Act (which informs consumers about loan terms) and the Real Estate Settlement Procedures Act (which deals with closings) into one simplified set of disclosure forms for home buyers who are getting a mortgage.

The official title to these regulations is a mouthful — Truth-In-Lending Act / Real Estate Settlement Procedures Act Integrated Disclosure Rule— so the regulations are just referred to as TRID. (The enforcement agency, the Consumer Financial Protection Bureau, also calls it Know Before You Owe.”)

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Top 3 Reasons to Get Pre-Approved for a Mortgage

Before you start your home search, you want to know how much you can afford, right?

There are two ways to do this: with a mortgage pre-qualification and a mortgage pre-approval. As a home buyer, the pre-approval is more valuable to you during your home search.

How Pre-Approval Helps You as a Home Buyer

One of the main differences between mortgage pre-qualification and mortgage pre-approval is how the lender gives you the mortgage amount.

calculator and finance sheetFor pre-qualification, you give the mortgage lender your general financial history (including debts and income), and the lender gives you a mortgage estimate. For pre-approval, the lender digs deep into your credit report and gives you the exact loan amount.

If you’re choosing between getting pre-qualified for a home mortgage and getting pre-approved, choose to get pre-approved. Here are the top three reasons why:

1. You Learn Exactly What You Can Afford

There are no estimates in a pre-approval. The lender has looked into your credit history and you’ve given the required documentation to go through with the pre-approval process.

A mortgage pre-approval is not a commitment to the loan, but it paves the way to transition into applying for a specific property — your dream home in your price range.

2.  You Can Narrow Your Home Search

person searching online on laptopSearching through online listings can be a tedious process, especially if there are hundreds of homes for sale in the area. How do you narrow down your home search?

When you’re pre-approved, you’ll know exactly what you can afford, and tailor your home search around that mortgage amount. Now you can easily search through listings with confidence.

3. The Home Seller Takes Your Offer Seriously

Home sellers like to see that you’re pre-approved — it tells them that you’re serious about buying their home.

So when you’re competing with other home buyers to make the best offer on your dream home, being pre-approved will give you the competitive edge over buyers who are not.

We’re Your Real Estate Experts

If you would like more information about the mortgage process or on finding the perfect home that fits your lifestyle, contact us today at The Bouma Group at 734-761-3060 or email info@bouma.com and we can get started. We’d be happy to answer any questions you have. Start your home search here!

Ann Arbor Mortgage Interest Rates – February 2012

Ann Arbor Mortgage Rates Fall Even Lower!

Ann Arbor Mortage Interest Rates Feb 2012The mortgage rates for the Ann Arbor area have been down for quite some time now and have dropped even lower than in the past few months.  We should have rates in this range through most of the 1st and 2nd quarter of 2012.  What a great time to make an Ann Arbor home or condo purchase and take advantage of these low rates.  We are matching the lows of the year right now.  The buying power is worth $10,000 to $50,000 more in your purchase price with these rates.  You can buy FHA with as little as 3.5% down and we have several conforming programs with 10% down.

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Ann Arbor Mortgage Interest Rates – December 2011

Ann Arbor Mortgage Rates Remain at Historical Lows

Ann Arbor Mortgage Interest Rates December 2011*Rates are based on a mortgage of $200,000, 80% LTV, no points and a credit score of 740 or higher.

Ann Arbor mortgage rates have been down for 11 weeks now.  They moved up about .25% 2 weeks ago and just came back down the last few days.  We should have mortgage rates in this range through most of the 4th quarter.  What a great time to take advantage of these fantastic rates and purchase an Ann Arbor home or condo!  We are matching the lows of the year right now.  The buying power is worth $10,000 to $50,000 more in your purchase price with these rates, which mean more home for you.  FHA loans are also available with as little as 3.5% down and we have several conforming programs with only 10% down.

Please keep in mind that these rates are subject to change without notice. The rates listed above are averages and are presented to provide an illustrative perspective. To find out more about the current interest rates and how these low rates can affect you’re buying power, contact Charlie Chapell with United Bank & Trust today at 734-214-2728 or cchapell@ubat.com.

Although it’s the holiday season, it’s still a great time to take advantage of the low interest rates combined with low home prices! To search for that perfect Ann Arbor real estate, visit our Ann Arbor MLS site here!

Ann Arbor Mortgage Rates November 2011

Ann Arbor mortgage rates have been down for 8 weeks now.  They moved up about .25% 2 weeks ago and just came back down the last few days.  We should have rates in this range through most of the 4th quarter.  What a great time to make an Ann Arbor home purchase and take advantage of these low rates!  We are matching the lows of the year right now. Your buying power is worth $10,000 to $50,000 more in your purchase price with these rates.  You can also buy FHA with as little as 3.5% down and we have several conforming programs with 10% down.

Ann Arbor Mortgage Interest Rates for November 2011

*Rates are based on a mortgage of $200,000, 80% LTV, no points and a credit score of 740 or higher.

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Ann Arbor Mortgage Rates – October 7, 2011

Mortgage Rates Continue to Fall

Ann Arbor mortgage rates have hit another low! The mortgage rates have been down for 6 weeks now and at this level for the past 2 weeks.  We should continue to have rates in this range throughout most of the 4th quarter.  What a great time to make an Ann Arbor home purchase with these lower mortgage payments!  With these rates your buying power has increased by $10,000 – $40,000, depending on your purchase price.

Ann Arbor Mortgage Rates October

Please keep in mind that interest rates are subject to change without notice. The rates listed above are average rates and are presented to provide an illustrative perspective. To find out more about the current interest rates and which loan program is best for you, contact Charlie Chapell with United Bank & Trust today at 734-214-2728 or cchapell@ubat.com. If you haven’t already taken advantage of the low interest rates combined with low home prices, now is the best time! To search for that perfect Ann Arbor real estate, visit our Ann Arbor MLS site here!

Ann Arbor Mortgage Rates – August 30, 2011

Low Mortgage Rates Return

Mortgage rates have hit another low and have remained at this level for 2 weeks now.  We should continue to see rates in this range for the next several weeks, making this a great time to make an Ann Arbor home purchase with these lower mortgage payments.

Ann Arbor Mortgage Rates August 30, 2011

Please keep in mind that interest rates are subject to change without notice. The rates listed above are average rates and are presented to provide an illustrative perspective. To find out more about the current interest rates and which loan program is best for you, contact Charlie Chapell with United Bank & Trust today at 734-214-2728 or cchapell@ubat.com. If you haven’t already taken advantage of the low interest rates combined with low home prices, now is the best time! To search for that perfect Ann Arbor real estate, visit our Ann Arbor MLS site here!