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Category Archives: Mortgage News

Mortgages Made Easy: How to Choose the Right Home Loan

Key Takeaways:

  • As mortgage rates continue hovering near historic lows, many potential buyers are eager to make a move—but it can be hard to know which type of loan is best.
  • There are dozens of different mortgage options available today, and some even have low down payment or credit score requirements. This can help a variety of buyers finally achieve their real estate goals. 
  • Need help finding a lender or choosing the right mortgage for your needs? We’d be more than happy to offer a few recommendations.

Home Financing 101: The Most Common Types of Mortgages

Let’s face it—understanding mortgages can be the most complicated part of buying a home. Even experienced buyers sometimes have trouble deciding between lenders or shopping around for the best interest rate. And because there are so many options, it can be difficult to track down the mortgage that best meets your needs.

There are a variety of factors you should consider before committing to a loan, such as your income, debt, financial history, and how long you plan on staying in your new home. But if you play your cards right, you could end up scoring a great deal. Here are some of the most popular types of mortgages, as well as their pros and cons. Continue reading

6 Ways to Save for Your Down Payment

A 20% down payment is a significant chunk of change. But with enough time to prepare and a little bit of creative budgeting, you’ll be able to save up for your new home sooner than you think. Follow these helpful budgeting tips to get started!

Break Down Your Budget

Closeup of the black and white number keys on a basic calculator.While it’s never a bad idea to start saving for a down payment, it’s an even better idea to analyze your budget before you consider a home purchase. This will help you set realistic expectations and concrete goals.

First, make a list of all of your necessary monthly expenditures — rent, power, water, phone service, student loans, etc. Add these expenditures up and subtract them from your monthly take-home pay. Then, look at everything that is left over and consider what to cut back.

After you’ve taken a look at your spending, determine what home price range (and, consequently, a 20% down payment) you could comfortably afford based on your current monthly budget. Our handy mortgage payment calculator might help! Continue reading

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. 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!

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.


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 and we can get started. We’d be happy to answer any questions you have. Start your home search here!

What Exactly IS the Difference Between a Mortgage Lender and a Mortgage Broker?

Mortgage Lender vs. Mortgage Broker

So you’ve decided to purchase a new Ann Arbor home and have been researching the home buying process on the web. While reading through the many sites, blogs, and pages of information, you may notice the terms ‘Mortgage Lender’ and ‘Mortgage Broker’. While they are the same in many ways, there are also differences between the two. They are similar in that they both council you on the types of loans available, take the mortgage application from you, process the loan, charge lending fees, and make a commission off the mortgage they sell. Following is a brief summary of the difference:

A Mortgage Lender is an individual bank that directly loans you money to purchase a home. This can be especially beneficial if you are using a local lender or already have worked with them in the past. Because you are working directly with that bank, time may be saved during the loan process. Some lenders can offer a portfolio loan, if you don’t fit the normal secondary market rules.

A Mortgage Broker is an intermediary between the lending institution and the borrower. They represent multiple banks. They shop hundreds of lenders to find the best loan package for your situation. This can be very beneficial for those with unique circumstances or problem credit. A mortgage broker can have more flexibility because they are not tied to the constraints of a single institution.

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What Does Your Credit Report Say?

Do you know? You should!Credit Report Ann Arbor Mortgage Info

What’s on your credit report is more important than ever. It is reviewed when you apply for a loan to purchase a home or condo, submit an application to rent an apartment or home, or apply for credit or insurance. A prospective employer may even look at it when you apply for a job!

Did you know that by law, you are entitled to receive a FREE copy of your credit report once a year? And, from all 3 credit bureaus: TransUnion, Experian, and Equifax. There are many companies out there that offer to get your credit report for you and some of them will, but others may try to charge you fees or make you buy unneeded services. For example, the other day I received a letter in the mail from American Express. This is what it said:

Free Credit Report – Your signature below is required to try ID Protect Premium from American Express FREE for the first thirty days so you can get delivery of information regarding your protection benefits which will include the following:

1…Your Free Triple Bureau Credit Report
2…Daily Monitoring Notifications
3…Internet Fraud Monitoring

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Mortgage Fraud Alert for Ann Arbor Homeowners!

Warning Sign for Ann Arbor Mortgage FraudAnn Arbor Homeowners Beware!

Mortgage scams are at an all-time, record high. According to FinCEN (Financial Crimes Enforcement Network), suspicious activity reports were up 31% from the first quarter of 2010. Although this sharp rise is in part attributed to cases going back several years that are just now being uncovered, there is a new scam that Ann Arbor homeowners should be aware – hijacked mortgage payments.

Here’s how it works: the homeowner receives a letter in the mail from Bank B claiming that they have purchased their mortgage from Bank A. The letter states that the homeowner should start sending their loan payments to Bank B, who now holds the mortgage. Since banks buy and sell mortgages on a regular basis, the homeowner may not think this is fraudulent and begins making payments to the ‘new’ bank. They usually don’t realize they’ve been scammed until a month or two later when they’ve missed payments with Bank A.

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