Friday, December 23, 2011

Selecting a Mortgage Lender

With the purchase of Real Estate ranking as one of the most important investments of your lifetime, you want to work with a lender that will offer you the best products and services that are available.


Think local. While online lenders can and do provide great rates, products and services, many borrowers prefer to be able to sit across a table from their lender and have a more personal experience. At the closing, many borrowers like to be able to sit across the table from both their lender and their real estate attorney. Should there be issues, both are at hand to either answer questions, or get in touch with people that are able to find a solution.


Look for referrals and see if anyone you know or your real estate agent knows has worked with a local lender. Their positive experience will almost surely mean the same for you.


Through what types of companies may I borrow money? This may be confusing since, as the borrower you have several choices where to go. They are to a bank, to a broker, or to what is called a mortgage banker.


Banks: When most people think of banks they think of what is called their retail channel. This means that you would go into the branch, or possibly online, apply, and have the bank process your loan in-house. Banks fund their own loans with their own money. This is a great way to get a loan, you are able to walk into a branch and sit down with a mortgage representative and have all of your questions answered.


Brokers: A broker provides similar services to what a bank does, but there are a couple of differences. First, they will shop the different lenders that they work with to find you the best rates and programs that fit your needs.


The difference at the closing table between the bank and the broker is that the money that is wired into the closing is coming from the lender, versus the brokers themselves. This is how a broker works. Keep in mind that the broker and the retail branch are actually competing against each other for your business, even through the lender may be the same. This helps you to benefit from competitive rates.


Mortgage Bankers: Mortgage Bankers operate a little differently than either banks or brokers, but have traits of each. They originate loans on behalf of lenders, as do brokers. Similar to banks, they underwrite and fund their own loans. And similar to brokers, they are able to work with multiple lenders, giving them choices as to where to place their clients’ loans.


Read the Disclosures

By law, and this has been the case for many years now, lenders must provide you, within three business days, two documents that you will really want to take a look at. These are the Good Faith Estimate (GFE) and the Truth-in-Lending Disclosure (TIL). These are two of the most important disclosures that you will see in the entire mortgage process.


Good Faith Estimate: This document is important because it lists all of the fees and costs that you can expect to pay should you decide to go with that particular lender. Some of the most important items that you should pay attention to are those related to origination costs and lender fees. You can then compare these costs to other lenders, which you should most certainly do.


Since January of 2010 as part of mortgage reform, many of the fees on this form are unable to be adjusted. This is to avoid surprises at the closing table where borrowers have new and/or adjusted costs put on them. Some of the costs have no limit as to how high they can go. These other costs and fees are mainly those that the lender has no control over, such as title company fees, which are controlled by the seller side in a purchase transaction.


Truth in Lending Disclosure: This document shows your Annual Percentage Rate (APR). This is your interest rate with your costs rolled in. This will always be higher than your interest rate. Given the same interest rate on the same product from two different lenders, the lower APR of the two will reflect the lower closing costs.


What to do next?

After having spoken to several lenders and reviewing the documents that they have provided to you, it is time to make a decision. While they may have different rate and cost scenarios, you need to select one. Part of what goes into making a decision will be the level of confidence that you have in them after speaking to them, regardless of what they offer.



As always, input from your real estate agent would be a good thing, as they have probably worked with some of the mortgage lenders that you are considering. They would be glad to help.

Ann Arbor homes for sale

Thursday, December 22, 2011

Overview of FHA 203K Rehab Loans

When looking to purchase a home in the Ann Arbor area, one option that is have available to consider is the use of what is called the FHA 203K Rehab loan. The 203K is a loan that can be taken when purchasing a property that is in need of some repair. It will combine the cost of the property and the cost of the repairs into a single loan.

The question is why anyone would want to take out a rehab loan on the purchase of a home.

The answer is simple. Homes that are at different levels of repair or in need of it are everywhere, ranging from new home construction projects that ran out of money, to foreclosures.

All of this means two things. The first: lenders that hold mortgages on these properties need to get rid of them. They face obstacles however, like the number of homes available. These homes are also more likely to be passed on by prospective buyers, due to the amount of work needed, and lenders know it.

The second point is that buyers, unless they are paying with cash, will be getting some type of mortgage on the property. Lenders, depending on what needs to be done, may have reservations toward lending money on a property in a dilapidated condition. A cash buyer will always make a lower initial offer and the lenders will sometimes accept. They will incur a huge loss sometimes, but often they see this as the better alternative.

You Are Holding the Cards.

How do you fit into an FHA 203K loan? You will have significant leverage in the transaction and be able to propose a higher offer than a cash investor might. It comes down to the fact that lenders would rather see a small loss instead of larger one on a property.

Depending on what needs to be done to the property, you may be able to negotiate to a price low enough, so that even when repairs are added in, you will have a property that is worth more than your investment.

How the 203K Work?

The 203K process is a pretty straight forward one. The first step is to find a mortgage professional that is able to originate a 203K mortgage. Many do, but not everyone does, so make sure that the one you are working with does, before you move onto the next step.

Once you have secured a lender, and a property, the next step is to get what is called a 203K consultant, assigned by your lender, to step in and help the process. This person, someone who normally has years of construction experience, will act both as an advocate, for FHA, and you, as well as someone to keep the contractors that will be doing the work on task. They will sit down with you and review your objectives with the project and review plans if there are any.

At this point you will need to get a 203K appraisal. This is a special appraisal that appraises the property as if all of the proposed improvements have been complete. These are a bit more costly and time consuming than a typical appraisal, but will give you an idea of what the place will be worth when it is complete.

Once you know what the value is after the work is complete, the next step is to get estimates from three general contractors, all of which must have their own references, and lines of credit from which to fund materials. The work must be managed by a general contractor, meaning that neither homeowners, nor people that aren’t general contractors are able to manage the project. This is to ensure quality, and to keep the project on a reasonable timeline.

The consultant will review the estimates and work with the homeowner to determine which will be in the best interest of the project.

Providing that the cost estimates are in line, the mortgage process moves forward, and is pretty much like any other mortgage at this point. Work on the property begins after the closing, at which time an escrow account is created to pay the contractors. The title company manages these draws.

Contractors are paid partial draws as the project progresses, to help ensure that work is completed. Once all work is completed, the contractor is paid the final draw. Overages are planned for in the initial cost estimates, and any money that is left over, if there is any, will pay down the mortgage. Homeowners may or may not live in the property while work is completed, depending on what needs to be done.

Summary

The FHA 203K is a great product for those looking to buy a home in need of repair. While it is a more involved process than just buying a home with a traditional mortgage, you may find benefits in going this route. Talk to your real estate agent and see what opportunities are available in the Ann Arbor area for you.

Tuesday, December 13, 2011

What to Wear in the Michigan Winter

Check out out new and improved PiperPartners blog at http://www.piperpartners.com/blog/. We have all the latest news on real estate in the Ann Arbor area as well as hundreds of homes and condos listed for sale and rent!


What do retail and reality have in common? Winter it would seem. This winter hundreds of non-native Northerners will be experiencing what may be their first winter ever, and they all want to know, "What do I wear in the winter?"
Ann Arbor Winter - What to Wear

For folks who have lived in the Ann Arbor area their whole lives this will undoubtedly make little sense. It's cold out, put on a jacket. That is perhaps taking for granted what Michiganders have always known, how to stay warm. Imagine though, for a moment, growing up in a warm tropical climate, surrounded by mountains and warm clear seas. The only place anyone here has ever seen snow is at the jagged tops of those mountains, cold, desolate, and dangerous. Less drastically, imagine relocating from Florida, where, yes it can get cold, but rarely snows and never freezes.

To address the issue and answer the question, "what to wear?" Piper Partners and the outdoor experts at Bivouac teamed up to highlight some of the very best in winter protection.

The Michigan Standard

Layer. The last thing expected out of a Michigan winter is temperature change but it happens and often. Step outside, it is ten bellow. Get in the car and maybe it's above freezing, but never warm enough by the time your eight minute commute is over. The office is the worst. It's too warm in the lounge and freezing in the break room. Layer. By wearing warm layers instead of a single jacket or other warm article of clothing, these problems become minor issues to plan around.

Tips for how to layer best:

  • Thermal shirts. These light weight, thin undergarments serve to hold in your body's heat. Look for a number on the packaging (ex. 190), the higher the number the warmer the thermal.
  • Ann Arbor Winter - What to Wear
    Thermal Shirts.
  • Hoodies, Sweaters, and the much loved flannel. Offered in a variety of styles and options for warmth, work or play. These pieces will be a standard in any winter wardrobe. Leave them on or ditch them at the door, they will prevent the need for a big bulky jacket.
  • Boots and Socks. A good pair of boots will help keep the cold and the wet snow off feet. If the commute involves walking or the cold is just too much, choose a pair of thick wool socks. Be on the look out for the actual wool content of the fiber, the higher the percentage the warmer.
  • Ann Arbor Winter - What to Wear
    Wool socks.
  • Thermal pants. Thermal options are available for pants but are much more difficult to manage than thermal shirts. While commuting or walking at a brisk pace, heat may build up that will be uncomfortable in the office. Since a pant change is not likely (a sweater can be hung up but not jeans), it may be best to just tough it up.
  • Ann Arbor Winter - What to Wear
    Mittens, removable gloves.

The Winter Jacket

Whether the best option is layering or not, a warm, reliable winter coat is a must for the Michigan winter. If it's 15 bellow zero or just freezing, sometimes it helps best to just stay warm. What are the option though and how can you get the most for your buck out of these sometimes expensive items?

  • The Big Guy. This is the biggest, the best, the warmest and usually the most expensive. No matter what it'll keep anyone warm on the coldest night, with the hardest wind. These jackets come equipped with the most advanced in jacket technology. (See the winter tech list below to find what matched best).
  • The "Northface". Patagonia, Northface, Arcteryx, are the major brand names Bivouac carries and each produces a variety of winter jackets. With so many options; wool or down, hard shell or soft shell, does it have removable insulation, waterproofing verse breath-ability, the right jacket is sure to be out there.
  • Light Weight/Windbreaker. This wont keep very warm, but for keeping the wind and water off, however it may be layered well with almost anything.

Winter Tech

To help survive winter, or just make it though warmly, a variety of technologies have been developed. Some are old as time and memory while others are the result of the most modern techniques in science. A basic understanding of these things will allow anyone to make a more informed purchase come time for it.

  • Gore-Tex. Patented materials like this will help to keep you warm, dry, and increases the the flow of air to keep you from sweating.
  • Wool and down. Both have their perks and will keep you exceptionally warm. Keep them dry to prevent the material from losing it's properties.
  • Thermal Insulation. A great way to layer and keep heat in. Look for numbers indicating warmth, the higher the warmer. Some brands make versions that will also keep things cool in the summer.
  • Waterproofing. Usually applied to a jacket, most good products will come already waterproofed. Be aware that this does fade off the jacket after a period of time. Be sure to redo this every two to three years.


Bivouac is an outdoor clothing and retail store located on State St. in downtown Ann Arbor, across from the 'diag'.

Sunday, December 11, 2011

Like Piperpartners on Facebook and Enter to Win a $50 Gift Certificate

Piperpartners is offering a chance to win a $50 gift certificate to Bivouac Ann Arbor just for LIKING our facebook page.

To help us get more viewers on our Facebook page- Piperparnters, and you the opportunity to get an extra $50 to spend on Winter Clothes to fend off the Ann Arbor Winter,  We hope you will take a minute and enter our sweepstakes (entry form below).

The Piperpartners real estate team would like you to LIKE our Facebook page. 
Prize Details: LIKE PIPERPARTNERS and enter for a chance to win a $50 Gift Certificate to Bivouac Ann Arbor.  Can be used online or in the store
Prize Eligibility: Only persons who are at least 18 years of age can enter.
Sweepstakes Starts: December 11, 2011 @ 12:01 am (EST)
Sweepstakes Ends: January 08, 2012 @ 04:58 pm (EST

Saturday, December 10, 2011

People's Food Coop, Kerrytown Ann Arbor, MI

People's Food Coop by Andypiper
People's Food Coop, a photo by Andypiper on Flickr.
Snowy morning, December9th, 2011. Couldn't resist stopping for a picture of the Peoples Food Coop and Cafe Verde on my way to work.

Monday, December 5, 2011

8723 Barrington Superior TWP MI - Brookside of Supeiror Home for Sale

8723 Barrington Ypsilanti MI.  Located in Superior TWP
8723 Barrington (MAP), large 2 story home for sale in Brookside Subdivision,  Ypsilanti MI, Superior Township.  Virtual tour of 8723 Barrington Ypsilanti MI 48198


Short Sale - Great opportunity to purchase a large three bedroom home on a fantastic lot in Brookside.  


Lots of home for the money!  Built in 2005 and in excellent contion. Over two thousand square feet of living space plus partially finished basment. Large master bedroom with upstairs laundry and open area that can be a study or family room.

Huge back yard that backs to subdivision common area.  Great for sports and games.

Family room features vaulted ceiling and a gas fireplace.  Large Island kitchen with bay window in breakfast area.  Formal dining room.

Brookside subdivision in Ypsilanti is located west of Prospect Road off of Geddes and features ranch and two story homes built by Centex and Lombardo Homes.  Brookside is located conveniently to Eastern Michigan University, University of Michigan North Campus, U of M Hospials, Veterans Administration Hospital, Washtenaw County Communtiy College, Downtown Ypsilanti and Depot Town.  Also easy access to Canton and Metro Detoit area.

This property is a short sale and requires seller and bank approval of terms and conditions of the sale.

If you are looking for homes or condominiums for sale in Superior Township or Ypsilanti Township, See all MLS listed properties for sale on Piperpartners.com at Ypsilanti Homes for sale



For a private showing or more information, contact Andy Piper at 734-604-8242.