Monday, September 17, 2012

EMU Area Home for Sale 415 Pearl Ypsilanti MI

EMU / Downtown Home for Sale

View the Virtual Tour at:

 415 Pearl Ypsilanti MI

Large porch welcomes you home to this
Beautifully Updated Home on a tree-lined street.
Walk to EMU campus and business school.

Spacious Living Room
with newer carpeting and ceiling fan.
Large Renovated Kitchen with walls of cabinetry.
Breakfast Area in Kitchen. 
New Washer & Dryer included. 
Hardwood Floors
Modern Paint Choices throughout
5-7 Bedrooms
--2 are walk-throughs that can be studies
• Easy Access to I-94, US-23 & Michigan Ave. 
• Close to Ann Arbor, Saline, Canton, Livonia 
• Ypsilanti Schools  
Walk to EMU, Downtown & Parks! 
Walk to Eastern Michigan University Campus and Business Schools, plus shops & restaurants in historic Downtown Ypsilanti. Island & Riverside Parks are nearby in Depot Town and have great jogging trails, Huron River Views, great events and festivals.
On the AATA busline--Bus, Bike or drive to St. Joseph Mercy Hospital & UofM Hospitals, Washtenaw Community College, Washtenaw Country Club, and more.



Wednesday, September 5, 2012

FHA Financing For Condominiums

If you own a condominium in Washtenaw County, and the average sales price in your complex is under $357,000, you and could greatly benefit from having your complex FHA approved. 

In recent years, associations have let their FHA approvals lapse, thereby eliminating a large number of potential buyers.  In Washtenaw County, about 30% of all sales are FHA financed.  That percentage increases as the price point decreases.
Generally speaking, the minimum down payment requirement for an attached condominium unit is 10%.  If the unit is located within an FHA approved complex, the down payment is reduced to 3.5%, opening the door to a larger number of potential buyers.

Because of ongoing economic uncertainty, most borrowers are using less of their resources when purchasing their new home, holding on to cash reserves and investment portfolios.  All things considered, they are probably making a wise choice. 

If your complex is approved, and your association does not renew the approval every two years, it will expire and fall off the FHA approved list.  Renewing an existing certification requires less documentation than requesting a new approval, however, each process is quite simple and, once all of the required documents are submitted to FHA, approvals can be issued within 2 -3 weeks. 

To find out if your complex is on the FHA approved list, go to the HUD website and enter your state and zip code.  This service is available from 8am – 10pm EST Monday – Friday.  If your complex’s approval has expired, or is nearing s expiration date, contact your association. 

You can also visit the HUD website to access the “Condominium Project Approval and Processing Guide”. This publication is quite user friendly and provides an overview of the re-certification process on pages 40– 41. 

If your association is interested in obtaining an FHA project approval, or in renewing an existing certification, New American Mortgage has a condominium department ready to assist you!  Please contact us!

Which loan is better? FHA or Rural Development?

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Which loan is better?   FHA or Rural Development?

That all depends on you and your needs. Let’s look at the pros and cons of each loan.

FHA loans are great.  On the plus side is the minimum down payment of 3.5%.  You CAN put more down but it’s not required.  If you don’t have a lot of savings you can even get all the money you need for your down-payment and closing costs as a gift from a relative.  Plus the seller is allowed to pay up to 6% of the sales price towards your closing costs and pre-paids.  The seller can’t pay more than the costs actually are though.  Your minimum investment has to be that 3.5% minimum, none of which can come from the seller.  FHA is also much more lenient about credit issues than other loan programs are, but my favorite FHA feature is the fact that all FHA loans are assumable.  That means that when you decide to sell your home in the future and you have an FHA mortgage at a nice low rate, your buyer can give you a down-payment and just take over your lovely low payments, no matter what interest rates are doing at the time.  They need to go through an approval process but once they do, you are totally relieved of any liability from that mortgage.
Now to the not so great features of the FHA loan.  The biggest one is mortgage insurance.  Up front mortgage insurance is currently at 1.75%.  That amount gets added on to your loan.  There is also an annual fee of 1.25%.  One-twelfth of that gets added to every monthly payment you make.  You are required to keep that mortgage insurance in place until you have 22% equity or five years, whichever comes later.  There are also maximum loan limits by county and those may affect your ability to use this loan for your purchase or refinance.

Now on to Rural Development or USDA. Those terms are interchangeable.  You hear both because the US Department of Agriculture guarantees the loans.  The best thing about this loan is that there is NO down-payment required!  Plus the seller is allowed to pay all reasonable and customary costs.  Just in case your seller has not agreed to pay for all the closing costs, you may still get lucky.  With Rural Development loans, you are allowed to finance 100% of the appraised value, so if your house appraises for more than the sales price, we can increase your loan amount to cover some or all of your closing costs.
The cons to a USDA loan is that the Guarantee Fee of 2% gets added to the loan amount.  Plus, like with FHA, there is an annual fee of .4% which gets added to your monthly payments.  The biggest difference is that with RD loans, you must carry that mortgage insurance for the life of the loan.  Or you can refinance.  There is no prepayment penalty with either FHA or RD.  There are also geographic and income limits.  In most of our area, the income limit for a family of 4 is $92,600.  Don’t be confused by the name Rural Development.  Oddly enough, they will not allow any income producing properties – so no farms.  Rural does not mean that the property needs to be in the country either.  In Washtenaw County, most everywhere which is not in the city limits of either Ann Arbor or Ypsilanti is eligible. ALL of Livingston County is eligible.  To find out if the property you want to buy is in an approved area, just go to and put in the address. 

There is another large distinction between FHA and RD and that has to do with your debts.  With FHA, if you have a student loan but you can prove that payments on that loan are deferred for at least 12 months after closing, we won’t count that payment against you.  Likewise if you are divorced and your former spouse makes the payments on your former marital home as ordered in the divorce decree, we won’t count that against you either.  With Rural Development loans, in both of those instances, you would need to qualify for the payments even though you do not make them.

To summarize, I typically find that the out of pocket money is less and the monthly payments are lower on an RD loan than with FHA.  Both FHA and USDA loans are great options for financing.  Call me at 734.238.3MTG (684) or go to my website at and we’ll figure out which loan is best for YOU.

Peggy Wilson
Senior Mortgage Banker
2395 Oak Valley Drive, Suite 200
Ann Arbor, MI 48103
Phone: 734.238.3MTG (684)
Fax: 734.669.6559
MI Mortgage License #133950

Can Interest Rates Get Any Lower?

Short answer, not really.  So if you’re waiting for interest rates to bottom out before you buy or refinance a home, you may just miss the boat!  Here’s a short lesson in how consumer mortgage interest rates are determined and why it’s not likely that they will go lower.

Mortgages are backed by bonds.  The lowest coupon currently available for a Fannie Mae MBS (Mortgage Backed Security) is the 3.00% FNMA bond.  Fannie Mae will pay the company that agrees to service (collect payments, pay out escrows, etc.) these loans an additional .25%.  Plus for the service of guaranteeing these loans against default, Fannie Mae will charge and keep a .25% Guarantee or “G” fee.  If you add all this up, you get a minimum consumer rate of 3.5%.  This means that the lowest currently available zero point 30 year fixed rate is 3.5%.  This rate goes to borrowers with high credit scores and a low loan-to-value ratio.

You can, however, get a lower rate by paying “points”.  1 point is 1% of your mortgage amount and at present that 1 point will lower your rate by about .125%.  If you decide to pay 4 points to buy your interest rate down to 3.00%, that is as low as the rate can go.  A Fannie Mae 2.50% bond does not currently exist which would support 30 year mortgage rates lower than 3.00%.  In addition, there is no evidence that investors who routinely purchase Fannie Mae MBS would be willing to continue those purchases if the coupon rates on those bonds declined to 2.50%.

So it would be detrimental for a consumer to delay refinancing or purchasing today because they are waiting and hoping that mortgage rates will decline further.  Today, they simply can’t.  Call me at 734.238.3MTG (684) to start your pre-approval or go to my website for more information –  I’d love to help you start saving money!

Peggy Wilson
Senior Mortgage Banker
2395 Oak Valley Drive, Suite 200
Ann Arbor, MI 48103
Phone: 734.238.3MTG (684)
Fax: 734.669.6559
MI Mortgage License #133950