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.
*Rates are based on a mortgage of $200,000, 80% LTV, no points and a credit score of 740 or higher.
Paradise or The Pits?
You’ve narrowed down the area and found the perfect Ann Arbor home. But have you really gotten to know the neighborhood? What seems like a utopia at first glance, may be the opposite once you do a little research. Here are a few tips for getting to know your prospective neighborhood and find your paradise.
- Make Multiple Visits. See the neighborhood at different times of day and on different days of the week. What seems like a quiet place during the day, may be filled with barking dogs and highway noise at night.
- Drive the Surrounding Area. Is there a power station or landfill nearby that you weren’t aware of? If you aren’t already familiar with the surrounding area, you may discover hidden aversions.
- Points of Interest. Find out where the nearest grocery stores, banks, and restaurants you frequent are located in relation to your subdivision. If you like to run to the store often, you may want your favorite close by. Where is the nearest hospital and fire station? Are there parks nearby? These are important things to consider in relation to your lifestyle.
The recent mortgage lending crisis spurred lending institutions to do a complete 180 from practices common 5 years ago. Then, anyone could get a loan whether they could afford the payments or not, and many creative financing options were available, including loans that required no documentation of income. Those days are long gone and have been replaced by the opposite scenario where it has become very difficult for a potential home buyer to secure a loan, even with a good financial portfolio.
But recently, it appears that mortgage lending requirements may be loosening and adopting the clean lending policies of a decade ago. As delinquent loans and credit losses are beginning to shrink, lending giant Freddie Mac recorded 1st quarter profits and has claimed that they no longer need government funding. The National Mortgage News also reported that at the beginning of the year, Wells Fargo dropped its credit score requirement for FHA backed loans to around 500. While lending institutions are aware that tightened lending requirements are keeping many eligible buyers from purchasing homes, thus prolonging housing recovery, they are keeping a watchful eye on the economy as they slowly loosen standards.
In a May 10 article in U.S. News and World Report, Keith Gumbinger, VP of mortgage information web site HSH.com, said, “Borrowers have a little bit of a misconception that you can’t get mortgage financing. The mentality of ‘It’s going to be too hard for me to get financing, so I’m not going to bother even looking,’ is persistent.” There are many options for borrowers out there, including:
When purchasing an Ann Arbor home, there are many things to consider once you’ve found the perfect place. There are inspections, negotiations, paperwork, and more. Working with the right Realtor can help take the stress out of this process. And to make the transaction even smoother, we recommend using a local mortgage lender when applying for the loan. Here are a few reasons why:
- The Appraisal. Generally, local lenders use local appraisers who have a much better understanding of area market conditions and values. Out of area appraisers don’t know the nuances of specific subdivisions. It has become a common problem that homes do not appraise for the loan value, which means the bank won’t lend you the money to purchase it.
- Reputation. Local banks care about their reputation within the community. They are more interested in client satisfaction, gaining referrals, and building long term relationships with the community than making a buck upfront. Out of area banks do not have local ties or incentive to retain clients.
- Communication. Having closed on thousands of Washtenaw County properties, we know how important it is to have open communication lines with the bank. If issues arise, it is imperative to have a timely response from the bank to resolves things as quickly as possible and avoid closing delays. In our experience, local lenders are much more responsive to the needs of their clients and area Realtors. Continue reading