August 29, 2007
Update: 100% financing is still available. The availability is dependent upon credit score, reserves after closing, and income levels. Appraisal are being scrutinized very carefully as we are in an area with declining values.
Rural Development Loans-We participate in the program and it's a great product once you get outside of Ann Arbor and Ypsilanti. In fact, the rest of Washtenaw County, all of Lenawee and Livingston Counties are eligible for Rural Housing loans. These are 100% loans with no mortgage insurance. Please contact us for more information.
Private Mortgage Insurance-The use of pmi is rapidly expanding as combination loans become increasingly difficult to obtain. Remember, there is nothing wrong with pmi, so please do not tell your buyers to avoid it. They may not be able to if they want that house!
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Encouraging Signs-It's too early to say for certain, but there are signs that the panicky U.S. credit market is beginning to get a grip. If so, most Americans should escape relatively unscathed from this month's financial anxiety attack.
One sign that things are calming down: Smart players are starting to look for bargains on Wall Street. The Bank of America, for example, agreed to invest $2 billion in the ailing Countrywide Financial, the nation's biggest mortgage company.
The Bank of America move gives it the equivalent of about a 16% ownership stake in the company, suggesting that the bottom hasn't fallen out of the mortgage business, that good borrowers still will be able to get loans, that lenders still can make money and that smart people are aware of all these things.
Gary Thayer, chief economist at A.G. Edwards, sees other signs that the crisis is easing a bit. Investors are starting to venture beyond ultra-safe Treasury bills and move back toward corporate bonds and other forms of debt. If things keep going as they are, Mr. Thayer said he thinks the credit crisis will produce only a slight hiccup in the economy's overall growth rate.
Are we out of the woods? No, we still have a way to go but encouraging signs are beginning to surface. Hang in there!
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Disclaimer: The information contained in this newsletter has been gleaned from various sources and is intended to be current and accurate, however we cannot and do not warrant or guarantee as such. This newsletter is for informational purposes only and is not intended to be, nor should be considered as, investment advice. It does not take into consideration the financial circumstances, needs or investment objectives of any specific person who may receive this newsletter. Individuals should seek financial advice with regard to specific circumstances before making any investment decision.
©Copyright 2007 Ann Arbor Mortgage Company, LLC
David Crisp
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