Category: EB Mortgage - page 3

Investment Property Rental Loans

Posted on April 18, 2023 by Creative Programs and Systems

Rental loans, or Debt Service Coverage Ratio (DSCR) loans, are tapered to rental investment properties. The DSCR metric evaluates the rental income, operating expenses, and mortgage expenses to formulate a dollar value.

Commercial lenders (private lenders, banks, etc.) typically require a minimum DSCR to qualify for a Loan-to-Value (LTV). DSCR loans provide a personal guarantee from the borrower based on whether they can prove rental investing experience, show an acceptable credit score and personal net worth, and whether the subject property is DSCR-eligible.

Rental loans are usually 30-year terms but can be adjusted if necessary. Amortization is generally 30 years, but five, seven, or 10-year interest-only periods are possible. During this time, annual or semi-annual adjustable rate and amortization begin at the end of the interest-only period during the entire 30-year term.

The different types of rental loans include:

Purchase
Cash Out Refinance
Rate and Term Refinance
Portfolio (two or more properties)
Multifamily (five or more units)

Any rental property purchaser can use a DSCR loan. Rental loans are typically utilized by real estate investors who do not have a W2 (salaried employment), do not qualify for a conventional mortgage, and do not have tax returns available.

DSCR loans can be refinanced, but there might be a prepayment penalty on the loan that will alter the refinance cost. Depending on the circumstances, it might be more advisable to do a rate and term refinance instead of a cash-out refinance.

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EB Mortgage is a locally owned mortgage company with experts in new home purchase, refinancing, and commercial loans. Our wholesale rates can’t be beaten. We offer more products, more options, and more solutions. Our “3C” Process is simple: complete our pre-approval request, consider options based on your requirements, and choose the offer that suits your needs best. Call us or e-mail us today!

Written by the digital marketing team at Creative Programs & Systems: https://www.cpsmi.com/

EB Mortgage

How to Buy a Home in Nine Steps

Posted on March 15, 2023 by Creative Programs and Systems

Homeownership can be both rewarding and daunting, especially for new buyers. If you’re in the market for a new home and aren’t sure what the procedures are, follow these nine steps to help guide you in the right direction.

Research: It’s important to start checking magazines, newspapers, and websites for real estate listings. Check with family and friends for potential listings as well. Monitor listings you are interested in by following the asking prices and the length of time on the market. Once you have an idea of what to expect, this will give you an idea of the area’s market.

Budget: Next, find out how much you can afford by multiplying your annual income by three to five times, and calculate the total with a 20 percent down payment.

Vetting: Getting pre-qualified for a mortgage is not the same as getting pre-approved. Both are vital aspects of homeownership. Getting pre-qualified involves supplying a mortgage company with your overall debt, income, and assets. Pre-approvals are based on the borrower’s credit, and a background check is typically involved as well.

Agent: Without an insider showing you properties or notifying you of new sales, you will probably be late in the game. Real estate agents know the home buying process, can negotiate prices, inspections, and the like, and are also familiar with many communities.

Offer: Once you have fallen for a specific home, you and the seller must agree on a price. Work with your real estate agent to negotiate an offer based on your budget, the neighborhood comparable, and more. Once the buyer and seller agree on a price, the house will go into escrow until the other steps are complete.

Inspect: After placing an offer, it’s important to test specific aspects, such as plumbing, electrical systems, windows, doors, etc., for functionality. Ask your real estate agent for a home inspector recommendation. The home will be under contingency based on the results of the inspection, giving you time to renegotiate or withdraw your offer based on the findings.

Mortgage: There are many different versions of mortgages, which are generally priced competitively based on the programs available. Whether you are trying to keep your monthly payments low or ensure they do not increase, lenders can find you exactly what you need.

Appraisal: To give a fair estimate of what the home is worth, lenders will arrange for a third-party company to come in and assess the premises.

Closing: There’s a lot of paperwork associated with buying a home, so once the documents are in order, it’s time to close the sale. When everything is signed, funds will need to be delivered to the seller. After the seller receives the funds, the home is yours.

Are you in the market for a new mortgage? Contact the experts at EB Mortgage today to get started.

Written by the digital marketing team at Creative Programs & Systems: https://www.cpsmi.com/

EB Mortgage

2023 Housing Market Predictions

Posted on February 20, 2023 by Creative Programs and Systems

The housing market is being eyed with heavy suspicion and uncertainty as rising interest rates combined with an unstable housing market and an increase in median sales prices. With the new year comes new questions pertaining to costs, sales, and more.

Home values in Michigan have risen by roughly 32 percent in the past two years, with the average-priced home valued at $235,649 on Zillow, up 8.1 percent compared to 2022. Local real estate experts predict that Detroit home values will increase another two percent through July 2023 before evening out.

Agents in the Michigan Association of Realtors say the current environment could be challenging for many buyers as housing availability and inventory are both on the lower side. Typically, there is a six-month supply of homes, but lately, Michigan is seeing about one month’s supply of homes available.

The market is affecting the mortgage rates, which makes buyers leery, driving down the list price on homes and making multiple offers – more competition – growing obsolete.

Home values throughout Detroit, Grand Rapids, Ann Arbor, Flint, Lansing, and Muskegon are expected to rise in 2023 by anywhere from .05 percent to 5.7 percent, with no signs of slowing down.

The good news is that easing inflation and lowering rate hikes by the Federal Reserve will likely cause mortgage rates to drop below six percent in the spring and summer of 2023.

The falling rates will improve home affordability for many homebuyers. As the home price growth levels off, inventory constraints will cause the market to see more competition. With homeowners sticking to lower interest rates, determined buyers will try to grab whatever homes are available.

If you are in the market for a mortgage, contact the professionals at EB Mortgage today.

Written by the digital marketing team at Creative Programs & Systems: https://www.cpsmi.com

EB Mortgage

Home Equity Basics

Posted on January 19, 2023 by Creative Programs and Systems

By owning your own home, equity allows you to build wealth through time. Homeowners are responsible for maintaining the house after the mortgage closes, but it’s not for nothing. Home equity builds with each payment made towards your mortgage and the value of comparable sales in your neighborhood.

Home equity is the value of your home beyond how much money is owed. If your home is worth $350,000 and $300,000 is owed, you have built $50,000, or 14%, home equity.

Equity can be calculated in many ways, including down payment at the time of purchase, loan amount, appraisal value, paying toward principal, and depreciation.

Home equity can be used as a loan through a Home Equity Line of Credit (HELOC) or a home equity loan. Lenders usually won’t allow borrowers to mortgage more than 80% of their home’s total equity, but what can be borrowed can be used for a variety of things. Some borrowers use the money to pay off credit card debt, school tuition, taxes, and more.

Though equity generally rises over time, sometimes, depending on the market value of your home, equity can go negative. If your $350,000 home dropped in value to $280,000 due to an economic decline and if you still have a $300,000 mortgage, the equity will be negative by $20,000. A payment in full would be required to bring the equity to a break-even point. If you are not planning on moving soon, this wouldn’t be an issue, but if you are looking to sell your house, it can be difficult to manage the difference.

Increasing your home equity involves paying down your mortgage and making minor or major repairs such as replacing your garage door, adding stone veneer, refreshing your kitchen or bathroom, resurfacing the driveway, replacing flooring, painting, roof repair, etc.

Home equity is important for increasing your wealth and dramatically increasing the value of your house. As long as you don’t overspend on remodeling and know all the fees and costs associated with your loan, your equity can grow substantially.

Looking to buy or sell your home or commercial property? Or perhaps you’re thinking about a Home Equity Line of Credit (HELOC) or a home equity loan to pay down debt or make renovations? EB Mortgage offers the best rates for traditional and specialty lending. Contact us to learn more.

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Written by the digital marketing team at Creative Programs & Systems: https://www.cpsmi.com/

EB Mortgage

What is a Reverse Mortgage

Posted on November 16, 2022 by Creative Programs and Systems

Reverse mortgages are specially designed for homeowners 62, and older looking to supplement their income, cover healthcare expenses, etc., by converting part of their home equity into cash. The homeowner retains the title and gets an advance on some of the home equity in lieu of paying monthly mortgage payments. While this may be enticing for some, it’s important to know that a reverse mortgage will eventually result in fewer assets for you and your family. Read on to learn about the different types of reverse mortgages, how to qualify, get the best deal, and more.

While regular mortgages require homeowners to pay the lender monthly, reverse mortgages require the lender to pay the homeowner. Reverse mortgages allocate part of the homeowner’s equity and convert it to payments, tax-free. As long as the homeowner lives in the same home, they do not have to pay the money back unless they sell their home, move out, or pass away.

The three different types of reverse mortgages are:

Single-Purpose: Offered by some state and local government agencies and nonprofits. They are the least expensive options and can only be used for home repairs, improvements, or property taxes.

Proprietary Reverse Mortgages: Private loans backed by developmental companies; these are tailored towards higher-valued homes.

Federally Insured Reverse Mortgages: Also known as Home Equity Conversion Mortgages (HECMs), these are backed by the United States Department of Housing and Urban Development (HUD). Many factors are associated with HECMs, such as age, home appraisal value, interest rates, and more.

Lenders for reverse mortgages usually charge a service fee, closing fees, along with mortgage insurance premiums. As the homeowner acquires money, interest is added each month. So over time, the amount of money the homeowner owes rises with interest. Reverse mortgages often come with variable rates, which are associated with a financial index and fluctuate based on the market. Interest on reverse mortgages is not tax-deductible until the loan is paid off. With a reverse mortgage, the homeowner is responsible for property taxes, insurance, utilities, fuel, maintenance, and more.

Reverse mortgages can be helpful for some people but might not be the best option for others. It’s important to compare fees, costs, understand total costs, loan repayment, and more.

Are you interested in applying for a Reversed Loan? Contact the loan experts at EB Mortgage today.

Written by the digital marketing team at Creative Programs & Systems: https://www.cpsmi.com/

EB Mortgage

Obtaining Cash Through Home Equity Loans, HELOCs

Posted on October 19, 2022 by Creative Programs and Systems

As a homeowner, you are automatically building equity through time, which can be used to secure low-cost funds by obtaining a second mortgage. Through one-time home equity loans or a Home Equity Line of Credit (HELOC), these options are available for you to access cash for renovations, large purchases, or alternative debt repayment.

Home equity loans and HELOCs are secured against the value of your property, which allows lenders to offer lower rates than other types of loans.

A HELOC is a specific amount of money that can be used at your discretion. Similar to a credit card, these loans are repaid over time. However, they accrue lower interest rates on outstanding balances, and these loans are accompanied by variable interest rates and serve as a revolving source of funds that you can access whenever you choose through online transfers, checks, or credit cards connected to that account. There are few, if any, closing costs associated with HELOCs, and untapped funds do not charge interest.

Home equity loans are often given as large lump sums of cash, often accompanied with a fixed interest rate. These are good for individuals who need money for a one-time expense such as a wedding or home renovation. These loans generally exceed $35,000 or more. Closing costs associated with the first mortgage also need to be paid, such as loan-processing fees, origination fees, appraisal fees, and recording fees. Prepaid interest might also be required at closing.

These loans use your house equity as collateral by calculating the difference between the value of the home and the mortgage balance. The downside to these types of loans is that lenders typically place a second lien on the home, giving them rights to it – along with the first mortgage lien – if there is a default. The more the borrower obtains, the more they are at risk.

Mortgage brokers generally have the best deals on home equity loans due to their ongoing relationships with lenders and investment pools. If you need extra cash, a second mortgage can be a realistic option. Lenders might be willing to offer lower rates because they are secured against the your home’s equity. Remember to calculate the extra loan payment and factor it into your monthly budget, and don’t go into default, or your home could be at risk of foreclosure.

If you’re looking for fast cash, you’ve come to the right place! Contact the experts at EB Mortgage to get started today.

EB Mortgage

Credit Scores Explained

Posted on September 20, 2022 by Creative Programs and Systems

Let’s face it, most of us don’t have a couple hundred thousand dollars under our pillow to buy a home or even a new vehicle. We need banks to loan us large amounts of money for big-ticket items. How do banks determine who qualifies for a loan by calculating our credit score?

Your credit score is 100% up to you. How does it work?

First, we explain how the banks obtain your scores. Loan institutions use three credit bureau agencies: TransUnion, Equifax, and Experian, to get your score. They submit your social security number, and each company gives a score from 300-850. The higher the score, the better.

The three credit bureau agencies use FICO and Vantage Score to determine your score. Below are the five items FICO uses to determine your score:

35% Payment History – Pay down/off loans that are currently outstanding
30% Amounts Owed – Do not spend more than you make
Keep your loan-to-debt ratio below 30% (not including your mortgage debt) but all other debt owed like vehicle loans, credit cards, student loans, etc.
Experts say to stay below 10% if you want to maintain a credit score in the high 700s
15% Length of Credit History – Keep the line of credit/loan open, even if the balance is zero
Do not apply for a dozen credit cards just because you can. The credit limit, even though it’s zero, the balance goes against your credit score under income to debt (#2 above.)
Furthermore, do not close a bunch of credit cards either because the score is also measured by history by 15%.
10% Mix – Keep a mix of credit (a car loan, a credit card, and a mortgage.) Lenders like to see a borrower who can handle a combination of loans.
10% New Credit – Restrict yourself from applying for credit of any kind unless you have planned this through
Every time a creditor submits your application for a loan, it reduces the current score. They say 5 points or more for every pull.

Keeping a healthy, high credit score takes discipline and constant work. If you have questions or need help obtaining a loan, contact the experts at EB Mortgage today!

Written by the digital marketing team at Creative Programs & Systems: https://www.cpsmi.com/

EB Mortgage

Common Hand and Wrist Injuries Due to Sports

Posted on September 20, 2022 by Creative Programs and Systems

Playing sports has significant health benefits to a person’s well-being. However, with any physical activity is the possibility of injury. Approximately 25% of all sports injuries are associated with the athlete’s hand and wrist. These damages can create barriers to completing daily tasks- on and off the field. It’s important to understand the symptoms of common hand and wrist injuries and know how to take proper care to limit downtime. Below we discuss the most popular sports-related injuries:

Skier’s Thumb

Also known as ulnar collateral ligament tear, it is an acute injury of the ligament at the base of a person’s thumb. This injury occurs when the thumb is bent backward, causing the ligament that helps the thumb grasp to tear. Although this injury is most found amongst skiers while grasping a ski pole and falling, it can happen in any sport. Symptoms include pain and swelling at the base of the thumb with low mobility and weakness when attempting to grasp. Tears are best treated with rest and splinting for 4-6 weeks, but a complete tear or multiple injuries may require surgery to reattach tendons.

Finger Jam

This type of injury is also called the “basketball finger,” but it can occur in a range of sports like rugby, volleyball, or football that involves contact with a ball striking the end of an extended finger. The severity of the injury can range. A sprain or dislocation may be corrected by simply pulling on the finger. Symptoms to expect would be joint pain and swelling with the increased difficulty in bending the affected finger. Treatment consists of rest, ice, splints or buddy taping to an adjacent finger.

Scaphoid (Wrist) Fracture

A wrist fracture is an acute injury resulting from the break in one of the many small bones in the wrist. These injuries are not always easy to observe and diagnosed by untrained eyes. The most common cause of a wrist fracture occurs among snowboarders, rollerbladers, and football players, those who extend their arms when falling. Fractures happen when their hand and wrist get hyperextended, and the athlete’s weight is forced onto the palm. Injuries include pain and swelling in the area below the base of the thumb up through the forearm. The pain may increase with the movement of the thumb and wrist. Treatments will vary depending on the severity of the fracture, where most require splinting or casting, but others may result in surgery needed.

Wrist Ligament Tear

Wrist ligaments and cartilage can experience tearing for many different reasons. The two most common are acute trauma caused by a hard fall on an outstretched arm, causing the wrist to twist abnormally. Secondly, repetitive stress injuries (RSIs) can gradually pull on tendons and tear during exercise or other recreational activities.

Total prevention of sports injuries may not be possible, but taking the proper precautions, will likely lower your risk. Always wear well-fitting sports equipment and protective gear like wrist guards and gloves. Sports tape can help make a big difference in keeping your muscles in check. Remember to warm up, stretch, and take breaks to allow proper body functionality.

Have an injury to your hands or wrist? Contact the experts at Michigan Hand & Wrist for a free consultation!

Michigan Hand & Wrist was founded in 2001 with the mission to provide the highest-quality care for patients seeking surgical or non-surgical hand or upper extremity relief. Our goal is to exhaust all non-operative measures before discussing or moving on to surgical interventions. We offer on-site physical therapy from therapists committed to improving your quality of life. Our individualized treatments are modern, progressive, and exceptional. Call us at 248-596-0412 for further questions.

Written by the digital marketing team at Creative Programs & Systems: www.cpsmi.com

EB Mortgage

Experts Spot Recession Signs in Michigan

Posted on August 22, 2022 by Creative Programs and Systems

Soaring prices for items such as gas, airline tickets, food, and more are signaling alarms to economic experts. According to a June report by the University of Michigan Surveys of Consumers, buyer sentiment decreased by 14.4 percent in June, and roughly 79 percent of consumers anticipate bad times for business conditions in 2023.

University of Michigan economist Joanne Hsu said, “As higher prices become harder to avoid, consumers may feel they have no choice but to adjust their spending patterns.” Some economists project a 50 percent chance that the United States economy will slide into a recession before 2024.

For Michigan, the automotive industry is a telltale sign of a potential recession, as huge layoffs generally begin there. When people are out of work, they swiftly cease taking out vehicle loans.

Strong consumer demand has outpaced supply, as semiconductor shortages have put auto production behind for nearly two years. This unusual trend is leaving automakers with empty lots. Car sales in April and May of 2022 were ultra-low due to lack of supply, not demand.

According to some consumers, a recession is already happening due to the United States jobless rate being 3.6 percent in June for the fourth month in a row. For Michigan specifically, the jobless rate was 4.3 percent in May.

Technically, a recession is labeled as an economy that shows negative growth for two consecutive quarters. It is possible that the United States economy could slip into this trend, but the stark recession in 2020 lasted only two months at the beginning of the COVID-19 pandemic.

The Great Recession took place between December 2007 and June 2009. The jobless rate stayed around nine percent and higher for most of 2009 and 2010.

Gabriel Ehrlich, director of the University of Michigan’s Research Seminar in Quantitative Economics, says he doesn’t see a recession as inevitable. He warned that a recession could be sparked by the Federal Reserve’s effort to fight inflation along with the war in Ukraine.

“All bets are off if supply chains have major problems. That’s the number one wild card.”

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Written by the digital marketing team at Creative Programs & Systems: https://www.cpsmi.com/

EB Mortgage

Alternative Loans Explained

Posted on July 19, 2022 by Creative Programs and Systems

Conventional loans are not the only way borrowers can get approved – alternative loans include non-conforming loans, stated income loans, Alt-A loans, portfolio loans, and others. Where conventional loans cannot provide purchasing power, alternative loans can work for the right buyer.

Alternative loans are meant to assist unconventional borrowers to secure financing. Atypical buyers can include those who are self-employed, receive income from unconventional sources, don’t have established credit, have high debt-to-income ratios, credit struggles, or exhibit other unique life experiences that complicate securing a traditional loan.

For certain property types, it can be challenging to secure a traditional or government-backed loan; alternative loans are also useful in these cases.

The requirements for alternative loans differ from those for conventional loans. Usually, they are more relaxed and do not make the same requisites. For example, buyers might not have to show all of their income sources or might be able to receive a loan even if their employment history is inconsistent or challenging to verify.

Some alternative loans include:

Low Down Payment: Borrowers can apply for a low- to nonexistent down payment. Since there is no official governmental oversight, the requirements vary between lenders, but overall, the rules are more flexible.
Credit: Buyers with credit issues (no credit established, short credit history, credit problems, etc.) can benefit from alternative loans. Usually, this happens when the borrower is very young or has no credit cards or other debt in their name.
Debt-to-Income: A high debt ratio to income can immediately disqualify a borrower for standard loans. Stated income loans are an alternative that does not subject the buyer’s income to verification.
Employment: People who are self-employed, newly employed, promoted, career change, etc., might struggle to secure a traditional loan. In these cases, an alternative loan is best to get them into a house they truly love.

The right lender can help you apply for an alternative loan. Work with an experienced mortgage advisor to ensure you fully understand the fine print and can be led in the right direction.

Unconventional loans often include a higher interest rate; even with a good rate and adequate terms, it is important that borrowers applying for alternative loans are honest and truthful about what they can afford.

Are you looking to secure an alternative loan? Contact the experts at EB Mortgage today.

Written by the digital marketing team at Creative Programs & Systems: https://www.cpsmi.com/

EB Mortgage