Category Archives: Buyer Information

Wire Fraud in Real Estate Growing Fast

Buyer Information, Seller Information

Real estate transactions are a lucrative and growing target of opportunity for fraudsters. Why? The transactions are large, with many players involved, and email is commonly used for providing instructions for the sending of funds at closing. This creates the perfect opportunity for criminals to swoop in on unwary buyers, snatch funds, and disappear. Homebuyers who are aware of these schemes can protect themselves and make sure their purchase goes smoothly.

How Does Wire Fraud in Real Estate Work?
Closing on a house generally requires a wire transfer, and this transaction is usually a large sum. This step in the closing process must be done with care. This is the stage when scammers are most likely to move in. Here’s how real estate wire fraud works.

A scammer gains access to the email of a participant in the transaction, usually the REALTOR® or title agent. Not only does this give the scammer access to the agent’s information—such as the buyers they’re working with—but it also allows the scammer to use the agent’s name and email to deceive buyers.

The fraudsters then forge the agent’s email and other details to make their email appear authentic. This message may look and sound very similar to the agent’s real emails, so this can be difficult to detect.

They monitor the transaction and at the time for the disbursement of funds they send an email to the buyer or financial institution with bogus wiring instructions to their account. This is usually not discovered until the title agency notifies the buyer or financial institution that they did not receive the funds. By this time the criminals have the money and it is rarely recoverable.

How Can This Be Avoided?
All wiring instructions, no matter who they are from or appear to be from, should be confirmed by phone to a previously verified number of the alleged sender. This is one of the best ways to prevent wire fraud in real estate.

Keep in mind that phone numbers in scammers’ emails may also be fraudulent, so do not use the number included in the email. Also, be aware that scammers can call you from seemingly legitimate phone numbers using a technique called “spoofing,” so be sure you make the call to your agent.

 

 

Buying a Home in 2019

Buyer Information

If you’ve decided that 2019 is the year to buy a home you may be wondering about the timing. When is the best time to buy? What do you need to do to prepare  and when should you do it? This simple home buying real estate calendar for 2019 will help you plan out the process easily.

January, February and March
Winter is, in some ways, the best time to buy a home, since home prices tend to be lowest. However, this also means there are fewer homes on the market, and you might not find the one you’re looking for during this time.

Before you begin, get your financial documents in order, shop for a lender and get pre-approved for a mortgage. In the current “seller’s market” an offer will not be considered unless it is accompanied with a pre-approval letter from a lender.

To obtain a mortgage pre-approval, you’ll need a variety of documents including previous taxes, W-2s, bank account information, and credit card statements. Then you’ll want to choose a lender. You might choose your local credit union, your preferred bank, or a private lender. Take some time to shop around and see where you can get the best interest rate.

April, May and June
Make a list of wants and needs for your new home and begin searching online. Decide what you must have in a home and what you might compromise on.  Select your preferred locations and a price range that fits your lender’s terms as well as your budget. Write these things down so you have a clear reference point when you start looking at homes.

Contact a real estate agent and start touring homes.  Through these home visits you’ll become familiar with the market and develop a sense of what you can purchase within your price range.

These are the months when the largest number of homes are listed for sale.  Conversely, this also the time when you’ll be in competition with the largest number of buyers looking at the same homes you’re considering.  Greater Lansing is going through a “seller’s market” with home’s going for full price or more when there are competitive offers.  Don’t be surprised to learn that a home you looked at yesterday has an accepted offer today.  In the Spring, homes are listed and under contract within a few days.

July, August and September
You should have toured a few homes by now. Hopefully, one or two have met your needs and you may have already written an unaccepted offer on a home or two.

You would think that by now the competition has slowed down.  This isn’t necessarily true.  With more buyers than homes, there will continue to be competing offers on any home you submit an offer on.  It’s simple. If you like the home, so will someone else.

When you found the “must have” home, your real estate agent will help you  prepare a winning offer within the terms of your budget.

Once you have and accepted offer, the closing process begins.  It takes an average of about 45 – 50 days from accepted offer to closing. Pay close attention to deadlines, and stay in close contact with your agent. Inspection deadlines are very important.

October, November and December
This is the slowest time in real estate and competition from other buyers is greatly reduced.  Successful buyers who found a home are gone.  Those who didn’t probably decided to lease until next Spring.

The November and December are good time buy a home, as prices are lower and seller expectation are not as high. They aren’t seeing the same volume of traffic that occurs in the Spring and Summer months and there’s a pretty good chance you’ll be able to make an offer without being in a competitive situation.

If you’re entering the Holiday season living a home you’ve recently closed on. Just kick back and relax.  You’re now a homeowner.  Just remember to change the furnace filter.

 

The Credit Scores You Need to Buy a Home

Buyer Information, Finance and Taxes

Mortgage lenders check your credit history before approving a home-buying loan. Your credit scores are crucial to getting the amount you want to borrow at a good interest rate.

Your income vs. your debt, your payment history, the length of time you’ve had credit, new credit you’ve opened, and the types of credit you owe (such as student loans or consumer debt) are all calculated in a valuation system known as credit or FICO scores.

FICO scores range from 300 to 850, but because mortgage loans are so large and have such a long payback period, most lenders require scores between 520 to 700 and above, depending on the type of loan. “Conforming” loans are guaranteed by the federal government, including FHA and VA loans. They require a minimum score of 500 to 520 and any scores lower than 580 will increase the minimum down- payment required to 10%. If you’re married or have a co-borrower, their scores must meet the same requirements.  All FHA loans require private mortgage insurance, which reduces the amount you can borrow.

“Conventional” loans are federally sponsored by Fannie Mae or Freddie Mac to be packaged into securities bundles and sold on the secondary market. Lenders can manage risk by requiring scores of 700 and above, using loan-level price adjustments, based on loan-to-value ratios and credit scores.

For any loan, the larger your down- payment, the lower your credit score can be. Credit scores also impact interest rates. The better the score, the better the rate.

Quick Ways to Build Equity

Buyer Information, Finance and Taxes

Equity is the percentage of market value that you own in your home. Your lender owns the rest, so your goal should be to pay the lender’s share (the principal) down and build your share (equity) up.

You don’t need to go to extreme lengths to pay down your mortgage. Just follow these few easy tips:

  1. Buy wisely. Buy as much home as you can without straining your resources, so you can occupy your home longer. Moving and closing costs eat away equity.
  2. Pay a little extra. Pay a little more every month toward reducing your principal. Use bonuses or cash back on your credit cards to apply to your mortgage. Making one extra payment a year could shorten your loan payoff by as much as four years, saving you thousands of dollars in interest.
  3. Pay off other debts. Don’t incur new debt. Spend less on automobiles, dinners out and other expenses. Pay off credit cards and student loans as quickly as you can, so you’ll have more money available to pay toward your mortgage.
  4. Make improvements. Keeping your home repaired and updated helps you preserve equity by making market value higher.
  5. Let time work for you. Think of your home as a savings account where the money you put in can be retrieved one day – with interest. Historically, homes have increased in value as much as three percent a year in normal markets, which is a great way to build instant equity.

Should You Wait for Lower Prices and Interest Rates?

Buyer Information

Home prices have been rising for over seven years, and mortgage interest rates for five years. Should you wait to buy a home? The numbers say no.

According to the National Association of Realtors®, the median existing home price is more than $250,000, the highest it’s ever been.  If you wait to buy a home,  you’re losing the opportunity to build equity, or ownership, in a home of your own.

If you’re worried that homes are priced too high and you’re afraid of losing money, consider this: According to the US Bureau of Labor Statistics, prices for housing were 50.88% higher in 2018 versus 2000, for an average increase of 2.31 percent a year. The average inflation rate for the same period was 2.07 percent. Home ownership beat inflation by 0.24 percent.

Mortgage interest rates hit all time highs in October 1981, when a benchmark 30-year fixed rate was 18.45 percent (with 2.3 points paid by the borrower). The lowest took place November 2012 at 3.35 percent with 0.7 points. At the current about 4.5 percent for a conforming fixed-rate for those with good credit, mortgage interest rates are tantalizingly low.

The best time to buy a home is when you want to, not when you think the market timing is best. Unless you have a crystal ball, you don’t know if prices and interest rates will recede, plateau and or rise. Look at homebuying for the long term, and you’ll be glad you didn’t wait.

What Realtors Look For to Find Comps

Buyer Information, Seller Information

Comparable homes, or “comps,” are among the most accurate estimations of any home’s value. Realtors find comps and use this information to inform real estate sales or purchases for their clients. When working with home sellers, Realtors find comps to make the most accurate price possible, so the house isn’t priced out of the market and no money is left on the table. When working with home buyers, Realtors find comps to ensure a home is priced accurately and, if it’s not, to make a solid argument for a lower bid. But how can Realtors tell if a home is truly comparable? And how do Realtors find comps?

Location
Location, location, location. It’s one of the most important factors when buying a home, which makes it an equally important factor to accurately find comps. Realtors try to find comps within a half-mile radius of the home in question. This generally means the homes are in the same or very similar subdivisions or neighborhoods.

Locals know that transitions between neighborhoods aren’t always gradual, and this can be tough to tell from a map. Going down the street past a certain building, or crossing the street into another neighborhood can make a big difference in home value. When finding comps, it helps to work with a local expert who understands the unmapped borders between neighborhoods.

Time and Market Conditions
In today’s competitive seller’s market, a lot can change in 6 months. From one year to the next, average home prices can change by as much as 10% or more in any given neighborhood, which indicates a 6 month delay can change the price by 5% or more. On a $200,000 home, that’s a $10,000 change in 6 months. To find comps with truly comparable prices, Realtors look for homes currently listed for sale as well as those that have sold in the last three months.

Actual Sales Price
While you can see what nearby homeowners are currently asking for their home and public records will show previous sale prices, this isn’t the full story. Sellers may make concessions to buyers during real estate negotiations, such as covering closing costs or making repairs, that can adjust the actual sale price. Realtors use their local Multiple Listing Service (MLS), which is maintained and updated by other Realtors, to get a more accurate picture of the real sale price.

Square Footage of the Living Space
Two homes in the same neighborhood that were sold around the same time might still have drastically different prices if they’re not the same size. Unless there’s other big repair problems or key features missing, bigger homes tend to generate bigger prices. To find comps, Realtors look at homes with the same or very similar square footage.

Bedrooms and Baths
Square footage isn’t the only important size factor. Two homes with the same square footage may have different numbers of bedrooms and baths, which will change the functionality of the home and therefore the price. When finding comps in the area, Realtors will compare homes with the same numbers of bedrooms and baths and also consider other functional spaces, like the size of the kitchen or a finished basement.

Updates
Remodeling your kitchen and bathroom, or finishing a basement not only gives you a luxurious space to enjoy, but it also increases the value of your home. This means, to find comps that are truly comparable, Realtors will consider recent updates, and determine how much these updates are worth. If the home in question has had a lot more remodeling than nearby homes, or it’s missing key updates, it can impact the price more significantly. While the MLS lists this type of information, many other home estimators and listing services don’t.

Repairs
Some homeowners want to build equity and don’t mind making some repairs to a home. Others are looking for a move-in ready home and don’t want the hassle of repairs. If the home in question needs some work, Realtors will have to adjust the price accordingly.

Yard and Property
It’s not just the home that attracts homebuyers. Outdoor amenities such as big yards, fences, decks and patios make a big difference, especially for Michigan homebuyers. To find comps within the area, Realtors will also consider outdoor features.

Special Features
A variety of other features can drive home prices up or down. Different areas may have their own special features, such a being close to MSU, parks, shopping or recreational activities. Common house styles, and types of buyers in the market can make certain homes more attractive. The cold winters in Michigan make energy efficiency updates an important consideration. In summer, central air conditioning may be a valuable feature.

View
In a neighborhood located near a lake, wooded area, or another special feature, home values may vary significantly based on how close or how visible the feature is.  A lakefront property, for example, would not be comparable to a lake access property, even if the latter was very similar and located across the street.

To truly find comps that represent your home, it’s important to consider all factors. It’s also important to get local insight, so you’re not comparing homes in neighborhoods that aren’t the same. An online estimator is a good place to start and can help you find comps with baseline similarities. However, to get a more accurate valuation, it’s best to work with an expert.

 

 

7 Home Inspection Red Flags to Watch Out For

Buyer Information

Buying a home is an exciting process, but many homebuyers are also understandably nervous. Buying a home is a big investment you’re going to have for years. That’s why it’s important to watch out for home inspection red flags that signal big problems. Some slight problems or minor defects are fixable with a bit of TLC, but some issues can seriously detract from your investment, and even endanger your health and safety.

1. Structural Problems
Structural problems top the list of home inspection red flags. Structural problems, like a cracked foundation or damaged load-bearing walls, affect the integrity of the entire home and signs of these problems should be taken seriously. When selling a house that needs work, some home sellers might not know about structural problems or they might not disclose them, so you may have to detect these yourself. A home inspector will include structural damages in their report, but you can find signs before you get to the inspection stage. Looks for these issues which may indicate structural problems.

  • Cracks in the basement floor larger than ⅓ inch
  • Bumps in the basement floor
  • Misaligned door frames or windows
  • Misaligned porch or front steps
  • Walls have been removed

2. Grading
The grade or slope of the surrounding property affects the way water drains during storms or snowmelt. This subtle feature can be a big home inspection red flag if it’s not done properly. If the property slopes towards the home, even at a slight angle, it will cause water to pool in or around the home, perhaps in the basement or around the foundation. If the property slopes away from the home, but the yard forms a valley where water pools, this can also cause flooding and water problems. When studying the grade, look for the following home inspection red flags:

  • The surrounding yard is completely flat
  • Patches of dead grass, moist areas or puddles
  • Property slopes toward the home
  • Moist areas close to the home

3. Mold
Mold is often a problem if you’re buying a fixer-upper. Sometimes mold results from neglect and it can simply be cleaned up, but other times it can be a serious home inspection red flag. The major deciding factors are the extent of the problem and the cause of the mold. If mold has occurred due to a lack of cleaning and it’s isolated to small areas, the problem may be easily resolved. However, if the mold occurs due to a lack of ventilation or accumulating moisture, the mold will simply come back if you clean it, and you’ll have to fix the cause to stop the mold. This might mean replacing drafty windows, or it might mean redoing the entire attic, roof, or bathroom to ventilate the area or stop a leak. Watch out of these mold-related home inspection red flags to detect problematic mold issues.

  • Large patches of black mold anywhere in the house
  • A noticeable mold odor
  • Bathrooms without fans or windows
  • Large areas of patchy paint

4. Old Electric Wiring
Faulty electrical wiring can make it difficult to run modern appliances, and it is a leading cause of home fires, which makes it a serious home inspection red flag. Electrical wiring is also difficult to fix, making it easy to lose money on this home renovation. Homes constructed before 1930 may use dated wiring methods like knob-and-tube wiring, which can limit power output and even cause electrical fires. These wiring systems are often complex and disorganized, making future renovations difficult and expensive. They can even cause home insurance providers to refuse coverage due to the increased fire risk. If the home was constructed before 1930, ask about electrical updates or ask your home inspector if they can determine the type of wiring used. You can also look for the following home inspection red flags yourself:

  • Flickering lights
  • Outlet faceplates are hot to the touch
  • Outlets aren’t grounded
  • Certain appliances won’t work or won’t work properly
  • Certain appliances can’t run together

5. Old Plumbing
Like faulty wires, faulty pipes are hidden behind walls and under floors, which makes them expensive to fix. However, this also makes it difficult to determine how big of a plumbing problem is present. Sometimes a pipe can be easily repaired or a drain snaked to fix a problem, other times the issue is much bigger. To uncover major damages or clogs, look for widespread and long-lasting symptoms. If the problem exists only with one sink, one drain, or one pipe, it’s probably an isolated incident that can be reasonably fixed. However, if all the drains, sinks and pipes show the same symptoms, there’s probably a bigger underlying issue. Watch out for these plumbing-related home inspection red flags to detect the difficult and expensive problems.

  • Low drainage throughout the house
  • Low water pressure throughout the house
  • Water remains cloudy or discolored after running several minutes
  • Faucets continually sputter
  • Stained walls, ceiling, or tile
  • Mold smell
  • Wood rot around sink or bathtub

6. Pests
It’s almost impossible to keep your home completely pest-free, especially if you live in a rural area. However, there’s a difference between a few bugs and an infestation. If ants, termites, cockroaches, mice or other pests have taken moved in before the new buyers, it’s a home inspection red flag. In some cases, pests wander through a home and a thorough cleaning or a few traps can end a pest problem. In other cases, the creatures have nested in the home, causing structural damage and requiring full-scale extermination. So how do you tell the difference? Look for these home inspection red flags as signs of serious pest problems.

  • Powdery substance around windows, door frames, counters or home exterior
  • Scraping, grinding, buzzing or tapping noises
  • A musty smell
  • Dead or extensively damaged trees, plants or grass
  • Tracks, droppings, discarded wings, or other bug parts
  • Weak or hollow areas in floors or walls
  • Colonies or swarms around garages, trees or neighboring homes

7. Roof
When looking for your “forever home”, the roof is an especially important consideration. A solid roof is so important that an older home with a new roof can be a better deal than a newer home with a bad roof. Besides the costs of replacement or repairs, leaky roofs can lead to other problems like mold, rot, and water damage. So how can you tell if the roof needs replacement? Look for these home inspection red flags.

  • Roof replacement was never recorded
  • Roof was replaced more than 20 years ago
  • Excessive moss or plant growth
  • Missing, curling or cracked shingles
  • Dark spots or patchy paint on the ceiling
  • Previous roof repairs
  • Dark streaks on the roof

First-time home buyers should be especially aware of what home renovations they can handle and what do expect. Some homes with minor problems can be a good investment that will increase in value over time. However, other homes with big problems can quickly eat up your renovation budget. Watch out for these home inspection red flags and work with an experienced home inspector and you can find a home that will build equity over time.

Multiple Offers…the New Norm

Buyer Information, Market Update

The Greater Lansing housing market continues to suffer from low inventory.  As of the end of April there are 16% fewer homes for sale than were available at the same time last year.  Lack of inventory has been a serious problem for the past 42 months with real estate buyers struggling to find a home as demand outweighs the supply.

Multiple-offer situations have become commonplace

Because of high demand, homes have been getting continuous showings beginning on the day of listing. A few days later, sellers are presented with multiple offers for well over the asking price. It is not unusual for a seller to receive as many as 12 to 16 offers. To succeed in this competitive housing market a buyer must be ready to make a strong offer and act quickly. It’s essential that buyer have mortgage financing if place with a letter of pre-approval from the bank. To protect from making a hasty decision, the buyer should spend time viewing a selection of homes to become acquainted with the market. Finally, when the buyer discovers a home that they’d like to make an offer on, they should remember that if they like the home…someone else will too.

For home buyers, these trends highlight the importance of working with an experienced real estate agent when making a purchase. An agent can help you navigate the local real estate market and make a strong offer in a timely fashion.

What this means for sellers

In the current seller’s market, homes tend to sell faster and at a higher percentage of the initial list price.  It is not unusual to see offers of 10 to 15% above the listed price.

Can Second Time Homebuyers Qualify for an FHA Loan?

Buyer Information

With low down payments, low interest rates, and less stringent credit score requirements, FHA loans are an attractive option for many first-time home buyers. But what if you’re ready to upgrade?  Though many first-time homebuyers use them, second-time home buyers can qualify for FHA loans too. Here’s what you need to know.

Do You Meet Credit and Down Payment Requirements?

Just like first-time homebuyers, second-time homebuyers can qualify for an FHA loan only if they meet credit and down payment requirements. If you’re a second-time homebuyer looking for a forever home, there are no additional requirements and you’re not penalized for being a second-time homebuyer.

If You’re Buying a New Home To Live In

If you’re moving into a bigger home or moving to change locations, you’re in luck. An FHA loan is a good option for move-up buyers with a need to change homes. If you are moving to be closer to a new job, or you are moving because your family has grown, you may be able to have two FHA mortgages at the same time. If you don’t want to manage a second mortgage, you can coordinate your home sale to close your first FHA mortgage and take on another in a short period of time.

You’re Not Buying a Vacation Home

The FHA allows you to take out a second loan for a home that is closer to your workplace, but you cannot take out a second loan just for a vacation home. However, you can use a traditional loan to purchase a vacation home while paying off the FHA loan on your primary residence.

You’re Not Buying an Investment Property

Generally, FHA loans aren’t permitted for a property you don’t plan to live in. You must occupy the home within 60 days of closing, and you must live in the home for at least one year. Once these requirements are met, however, you can rent out the property and use a traditional loan to purchase another home if you choose. You may also rent a portion of the property at any time to help cover the costs or to make extra income, though you are still responsible for the entirety of the loan and you must prove you can make the payments yourself beforehand.

You Haven’t Had a Foreclosure, Default or Bankruptcy Recently

If your first home was foreclosed or you declared bankruptcy recently, it’s not impossible to get an FHA loan, but it is more difficult. You’ll have to wait at least 3 years after the foreclosure or bankruptcy, and your credit score will have to meet minimum requirements. Additionally, if you’ve defaulted on any type of federal loan, including a small business loan or student loan, among others, you’ll need to resolve it before you can use an FHA loan, regardless of whether you’re a first-time or second-time homebuyer. If you’ve resolved these issues, get pre-approval before home shopping to make the process easier.

If You’re a Co-Borrower

A second-time home buyer can qualify for an FHA loan if they co-borrowed the first loan with someone else. This provision is often used in cases of separation or divorce. Ownership of the first home may be settled in court or through an agreement, but the occupant moving out can use an FHA loan to purchase a second home if they choose.

National and Michigan First Time Homebuyer Programs for 2018

Buyer Information, Finance and Taxes

You don’t have to have perfect credit or a lot of money saved up to buy your first home. The first-time homebuyer programs of 2018 make home ownership an achievable dream for millions of Americans. If you’re ready to buy a home, the Michigan 2018 real estate market looks good for first time homebuyers.

National First Time Homebuyer Programs in 2018

1. FHA Loans

Credit Score: 580
 Down payment: 3.5%
Assistance: Not specified
 Other Requirements: Not specified

FHA Loans are among the most attractive and most popular options for first-time homebuyers. Insured by the Federal Housing Administration, FHA loans give first time homebuyers better rates with lower credit score requirements than many private loans. Credit scores can be as low as 580 and down payments can be as low as 3.5%. FHA loans are commonly used by first time homebuyers, but second time homebuyers can qualify for FHA loans too.

2. USDA Loans

Credit Score: 640
Down payment: 3.5%
Assistance: Not specified
 Other Requirements: Rural area

If you want to find your forever home in the countryside, a USDA loan is the ideal first time homebuyer program in 2018. USDA loans are very similar to FHA loans, except they are backed by the USDA instead of the FHA. While the property doesn’t have to be a farm, USDA loans are generally for properties in rural areas. A 640 credit score will make application easy, though buyers with lower credit scores can apply with additional documentation.

3. VA Loans

Credit Score: 0
 Down payment: 0
 Assistance: Not specified
 Other Requirements: Active or retired service member or spouse

VA loans are also similar to FHA loans, except they are backed by the U.S. Department of Veteran Affairs and they are only for retired or active service members or their surviving spouses. VA loans are particularly appealing because there are no credit score requirements, down payments, or private mortgage insurance needed.

4. HomePath Ready Buyer

Credit Score: Not Specified
 Down payment: 3%
 Assistance: 3%
Other Requirements: Education course, specified HomePath property

Government-sponsored enterprises Fannie Mae and Freddie Mac offer the HomePath Ready Buyer program to help first time homebuyers responsibly and affordably purchase a home. HomePath is unique because it gives several advantages to buyers over investors, and it sells properties that were previously in foreclosure and subsequently purchased by Fannie or Freddie. An online or in-person home buyer education course is required and closing cost assistance up to 3% is available.

5. Good Neighbor Next Door

Credit Score: Not Specified
Down payment: Not Specified
Assistance: 50% of home sale price
 Other Requirements: select occupations, select properties

If you’re a police officer, firefighter, emergency medical responder or teacher, you can get a home in certain areas for half the listed price. Sponsored by HUD, these loans are intended to benefit homebuyers as well as disadvantaged areas. Homebuyers must live in the home at least 36 months and only certain homes are eligible, but this first-time homebuyer program in 2018 offers considerable savings.

Michigan Specific First Time Homebuyer Programs in 2018

1. Michigan State Housing Development Authority (MSHDA) MI Home Loan

Credit Score: 640
Down payment: 1%
 Assistance: up to $7,500
 Other Requirements: below income maximum, Michigan properties only

The MSHDA offers favorable loans with down payment assistance to first time homebuyers statewide. MI Home Loans are FHA, USDA or VA loans with additional benefits from the state. The credit requirements are similar those of the federal government-backed loans, but down payments are much easier. By completing a Homebuyer Education class, buyers can receive an interest-free, payment-free second loan up to $7,500 for the down payment. The loan is only due when the property is sold, transferred or refinanced. There are a few requirements:

  • Homebuyers must contribute at least 1% of home sale price
  • A minimum credit score of 640 is required
  • All adult occupants must co-apply and qualify
  • Household income must be below area maximums (between $64,000 and $105,000 for two people, depending on area)
  • Buyers cannot have owned a home in the last three years

2. Michigan Mortgage Credit Certificate Program

Credit Score: Not Specified Down payment: Not Specified Assistance: 20% of loan interest Other Requirements: Subject to tax code

The mortgage credit certificate (MCC) program is a federal tax credit distributed by select states, including Michigan. This Michigan first time homebuyer program in 2018 can save some homebuyers thousands each year.

If you purchase a mortgage credit certificate from an approved Michigan lender, you can deduct up to 20% of your mortgage interest from your federal taxes. Since it’s a tax credit and not a tax deduction, it’s a dollar-for-dollar savings that essentially reduces the interest you pay by 20%. However, since the mortgage credit certificate is a nonrefundable tax credit, if won’t apply if your tax liability is already zero due to other credits. Talk to a tax professional to see if the MCC program is a good option for you.