Oakland County, Michigan : Housing Market Trends Are Changing

Oakland County, Michigan : Housing Market Trends Are Changing

The housing market has taken a lot of people by storm recently. Homeowners, Realtors, home buyers, and mortgage brokers in Oakland County can probably attest to that. Residential real estate sales in cites such as Farmington Hills, Novi, Northville, and West Bloomfield have been booming. Home prices have been on the rise as has sales transactions.

Looking at the high number of homes for sale in Oakland County, MI, there may be some indicators that a homes for sale in oakland county market may be on the horizon. If you are a home seller or buyer who has been trying to time the market, there are some housing sales trends that will be of interest to you. However, like all trends, even the experts find it challenging to determine the exact timing of upswings and downturns.

What are Some of the Indicators of a Cooling Housing Market?

In a red hot real estate market, home prices tend to go sky high, and the number days that homes for sale in Oakland County, Michigan remain on the market is impressively low. Houses sell fast at their asking price and frequently above the listed price.

Never underestimate the wisdom of the rule of supply and demand. When the supply of homes for sale in Oakland County, MI exceed the demand, this is a signal that something is changing. This may or may not mean that there are many homes just listed on the market. What you could be witnessing is that homes are on the market for longer than they used to be, and the demand is not keeping up with the supply.

There appears to be some subtle undertones in the Oakland County, Michigan housing market according to some people who are watching it closely. When one piece of the puzzle waivers even slightly, it could be the beginning of a domino effect that is about to happen. If their home is not selling as quickly as expected, a homeowner reacts by lowering their asking price. If this happens enough, other sellers are forced to lower their price to be competitive in the Oakland County, Michigan housing market.

This has a negative impact on home sellers who, of course, want to get top dollar for their real estate. It does, however, open up an opportunity for the buyers. A first-time buyer may now find themselves able to purchase a home in a market that was previously price prohibitive for them as long as they can qualify for a mortgage.

The Economic Unknowns in 2021

There are many economic unknowns at this time, and more seem to come into play all the time. While many people are talking about Washington DC’s inclination to raise interest rates, it’s a bit of a mystery so far. A rise in the prime interest rate will be reflected in the rate at which a consumer can obtain a home mortgage. Uncertainty slows down many sectors, and the residential real estate market is no exception. Potential buyers in the Oakland County, Michigan housing market may be forced to take a “wait and see” attitude before they buy a house.

Many people are concerned about the uncertainty of the stock market and what this could mean to their personal erage American home buyers in Oakland County, Michigan have IRAs and 401ks they need to protect, and that will negatively impacted whether they believe they are ready to buy a new home.

Another economic uncertainty is also likely to bring on a cooling housing market in Oakland County and across the country for that matter. There is an ongoing threat that higher taxes will be imposed on businesses, corporations, and individual taxpayers. If this new tax policy was to get passed, the impact would affect people in every income level. Businesses have historically reacted to higher tax rates by laying employees off and decreasing hiring. Fear of losing their job is another reason why people put off buying a house and taking on any new financial obligations.

Another current issue that could cause a cooling housing market in Oakland County, Michigan is the rising rate of inflation that people are already feeling in 2021. People are paying more for practically everything, and their money is not going as far as it used to just a year ago. This, combined with the other aforementioned new developments, is not going unnoticed by consumers in Michigan. When consumers get “hit in the pocketbook” or wallet, they understandably change their buying habits. With so much negative economic news, however, it doesn’t necessarily mean that the real estate market in Oakland County will come to a standstill. Even if home sales slow down, home sellers should remember that it has been in quite a boom.

A boom in real estate is a trend that comes and goes from time to time. People will always want or need to move for one reason or another. Homes that are priced right will continue to sell, and buyers will continue to buy them. The days of bidding wars may be fewer and further between, but it’s always exciting when it happens! Now that school is open again after summer vacation, the families of Oakland County are hopefully all settled in their lovely new homes. Farmington Hills, Novi, Northville, West Bloomfield, and all of the other wonderful communities in Oakland County are great places to live, work, raise a family, or just live life to the fullest as an empty nester.

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Buying a Home in Oakland County MI: Responding to A Counteroffer 

Buying a Home in Oakland County MI: Responding to A Counteroffer 

Buying a Home in Oakland County MI: Responding to A Counteroffer 

When buying a home in Oakland County MI, the stakes are high for both the person buying the home and for the seller. Hence, it may take some negotiating to reach an agreement that both the buyer and the seller are happy with. Of course, the optimum scenario would be to submit an offer on a home you love and the seller accepts it with no conditions. However, it’s more common, that the seller will respond to an offer with a counteroffer, which means they are open to starting the negotiation process.  In real estate terms, this is appropriately referred to as the seller-to-buyer counteroffer. 

How Many Counteroffers Are Typical? 

Just as a seller can submit a counteroffer to a buyer, a buyer can counter the seller’s counter, which then becomes a counter-counteroffer or Buyer Counteroffer No. 1. There’s no limit to the number of counteroffers that can go back and forth. If either party does not agree to the terms, the offer becomes void, and the buyer and seller go their separate ways with no further obligation. 

Responding to a counteroffer

A counteroffer changes one or more aspects of your original offer, and basically, you have three options for responding. You can either accept the seller’s counteroffer, reject the counteroffer or present a counteroffer of your own.

If you decide to continue negotiations, know your options such as how much you can spend, whether there are (or will be) similar properties to bid on, and what you are willing to concede – whether that’s contingencies or repairs you were previously set on.  

Also, consider how you can make the deal smoother for the seller, which may help push your offer through. For example, how quickly is the seller looking to close and can you agree on that? Have they already bought a new house? Do they want reassurance that their childhood home will be well-loved?  

View Homes For Sale in Oakland County MI

Find out what the seller’s motivations are – financial, emotional, logistical – and create a counteroffer that is in alignment with your own priorities. The seller’s motivations may become apparent with their first counteroffer and your counter may address some but not all of the seller’s concerns.

Commonly negotiated aspects of home buying 

With homebuying, everything is negotiable from repairs and closing costs to furniture and appliances. Some of the most commonly negotiated aspects of homebuying include the purchase price, closing costs, closing date, contingencies, earnest money deposit, and personal property. Offers and counteroffers can negotiate on a mix of these factors:

Purchase price 

Your pre-approval letter from your lender will tell you the maximum you can pay for a property, but you may not need to increase the price up to your limit. Your Farmington Hills MI REALTORⓇ will be able to advise you on what makes the most sense for your budget and the local market. The sale price is the most commonly changed item in the seller-to-buyer counter offer.

The seller might change this number in one of two ways. They might offer a price that is somewhere in between your offer and the original asking price or counter back with their original asking price, which means they are not willing to negotiate on price. But if they give you a counteroffer below the original list price, the negotiations are on. You can then choose to accept the seller’s proposal or make another counter offer back to them.

Closing costs 

The closing costs, which include insurance, title fees, taxes, and appraisals, are often the most negotiated line item between buyers and sellers. Closing costs can add up to as much as 5% of your total loan amount.  The seller’s counteroffer might address any contributions toward closing costs.

For example, you ask them to cover $6,000 worth of your closing costs, which is a common strategy in a buyers market. The seller might simply say no to this request. They could also agree to contribute $6,000 toward your closing costs while increasing the sale price by $6,000 – allowing you to finance your closing costs into the loan.

Closing date  

This is the date that you get the keys to the home. In a counteroffer, the seller might make changes to the closing date. Maybe they need more time to pack up and move, so they sign a counteroffer back to you proposing a 45-day escrow period. As the buyer, you can accept it or not. In most cases, the buyer will accept the seller’s proposed changes to the closing date, if it’s not a big difference

Contingencies 

If the provisions aren’t met, contingencies let you back out of a contract. A seller can reject or modify the contingencies, or conditions for the purchase, that you included in your offer. A home appraisal, obtaining financing, home inspection, and home sale are all examples of contingencies:

  • An appraisal contingency protects the buyer and is used to ensure a property is valued at a minimum, specified amount. 
  • A financing contingency gives the buyer time to obtain financing for the purchase of the property.
  • An inspection or a due diligence contingency gives the buyer the right to have the home inspected within a specified time period.
  • A home sale contingency gives the buyer a specified amount of time to sell and settle their existing home to finance the new one.

Before you consider dropping contingencies, be sure to speak with your Oakland County MI real estate agent about the possible risks. Sellers almost always accept the home-inspection contingency, as well as the financing contingency because they know that most buyers will refuse to move forward without those contingencies.

Earnest money deposit 

The earnest money deposit – also referred to as good faith money – is the sum you put down with your offer to show the seller you are a serious buyer. The earnest money deposit applies toward your down payment or closing costs. While the buyer and seller can negotiate the earnest money deposit, it often ranges between 1% and 2% of the home’s purchase price, depending on the market.

The earnest money deposit might range between 5% and 10% of a property’s sale price in a hot housing market. Some sellers prefer a fixed amount, such as $5,000 or $10,000. Of course, the higher the earnest money amount, the more serious the seller is likely to consider the buyer.

Therefore, a buyer should offer a high enough earnest deposit to be accepted, but not one so high as to put extra money at risk. Earnest money is always returned to the buyer if the seller terminates the deal.

Personal property 

A refrigerator, washer, and dryer set, and other appliances may be included in a home sale, but if they’re not, ask for them. The same goes for furniture and other personal belongings. The structure, fixtures, outbuildings, and anything attached to the land is included in the sale and is considered the “real property.”  

Negotiate with the market in mind

How you negotiate the seller’s counteroffer will depend on the type of market you’re in. Do you know if the seller has multiple offers on the house? If they do, you need to tread carefully. In a hot seller’s market, the seller’s counter may come with an unofficial “take it or leave it” clause. 

How is a counteroffer accepted?

The buyer can simply accept the counteroffer and deliver it back signed to the seller and their agent. Time is of the essence here as all counteroffers include an expiration date. It’s also important to note that the seller can accept another offer while the buyer is deciding whether to move forward, which is another reason to act quickly when a counteroffer is on the table. 

If the seller receives a more favorable offer while the buyer is deciding, the seller will typically withdraw the counteroffer, effectively removing the first buyer from the situation.  

The bottom line

The counter-offer process in real estate is more art than science. Look at what motivates the other person, get all the information you can about your alternatives, and look for a middle ground that still meets all of your priorities. Also, don’t believe an agent who tells you the seller will always counter the offer. Even if the seller does, you can still lose the house if the home is still getting showings. 

Partner With Oakland County MI REALTOR® – Tom Gilliam

REALTOR® – Tom Gilliam is your expert to buy or sell your home in Oakland County, Michigan – the Oakland County community’s number one REALTOR®.  In Oakland County, MI, you need to find an experienced agent who knows the community.

Tom currently lives in the Oakland County area and is very familiar with the local market, neighborhoods, schools, and community issues. His office is located in the heart of Farmington Hills, with five additional offices throughout the southeast metropolitan area.

View Homes For Sale in Oakland County MI

Tom is always ready to help families find the perfect home in the Oakland County area they want to live, whether it’s Farmington Hills, Novi, Birmingham, Troy, Rochester Hills, West Bloomfield, Bloomfield Hills, Ferndale, Royal Oak, Northville, Novi, Troy, Rochester, or Rochester Hills.

Give Tom Gilliam – “Your number one Oakland County Michigan REALTOR®” – a call today!

Tom Gilliam, REALTOR®
RE/MAX Classic
29630 Orchard Lake Rd.
Farmington Hills 48334
Direct: 248-790-5594
Office: 248-737-6800
Email: Homes2MoveYou.com
License #314578 

How to Increase The Resale Value of Your Oakland County MI Home

How to Increase The Resale Value of Your Oakland County MI Home

How to Increase the Resale Value of Your Oakland County MI Home

As the housing market continues to rebound, amid the pandemic, would-be sellers should think twice before skipping on updating areas of their home in need of serious upgrades. With housing inventory low and demand steadily increasing, Oakland County MI homebuyers are still willing to spend big on homes with quality finishes in sought-after neighborhoods. Whether you are thinking about putting your Oakland County MI home on the market this year or in the next couple of years, it’s a good idea to start building your home’s resale value now. 

Small maintenance and repairs

If you think that home maintenance on the weekend is a waste of your time and energy – well, it’s not. The small chores that you do around your home today actually prevent it from losing value. A little TLC maintenance goes a long way toward warding off expensive repairs. Most appraisers claim that homes showing little to no preventative maintenance can depreciate from $15,000 to $20,000.

A study conducted by researchers at the University of Connecticut and Syracuse University reveals that regular maintenance can boost your home’s value by about 1% per year. However, ongoing maintenance costs offset that value, which means that regular maintenance actually slows down your rate of depreciation. 

Most homebuyers generally notice any repairs needed upon buying a home. Proactive maintenance lets potential buyers know they won’t need to spend extra cash to maintain the basics – making your Oakland County MI real estate more attractive and more likely to get higher-priced offers. Although maintaining the basics can cost you a little money and certainly some effort, there is a way to accomplish this very important activity intelligently.

Many Professional home appraisers and REALTORSⓇ recommend a proactive maintenance schedule that includes keeping enough cash on hand to replace systems and materials; creating and following a maintenance schedule; planning a room redo every year; and keeping a notebook of all your maintenance and repairs.

Landscaping

Landscaping can add tens of thousands of dollars to the value of your Oakland County MI property. In fact, it is one of the few home improvements you can make that not only adds value immediately but also increases in value as the years go by as plants grow fuller and more robust as the years go by. 

A well-landscaped home has a significant price advantage over a home with no landscaping. This advantage ranges from 5.5 percent to 12.7 percent depending on the type of landscaping and the home’s original value. That translates into an extra $16,500 to $38,100 in value on a $300,000 home.

Having a long-term landscaping plan is great if you’re in the house for the long term. However, If you are planning to sell within a year, you can take several immediate steps to dress up your landscape and boost your selling price. For example, cutting fresh edges around your planting beds; having a sharp, well-defined edge between grass and mulch or dirt gives the landscape a professional look.

Replacing Your front (entry) door 

So how much value does a new front door add? According to Remodeling magazine, replacing your entry door has an average ROI of 74.9% With that ROI, you could potentially add three-quarters of the front door cost back into your home’s value. You could even add more value to your home, depending on the type of door you get and other adjustments you make to your home’s curb appeal.

With that ROI, you could potentially add three-quarters of the front door cost back into your home’s value.  A new door adds value in several ways: It attracts potential buyers, replaces an old worn-out door, prevents drafts, and welcomes visitors to your home. 

Popular front door color options include:

  • Black gives your home anything from a sleek and modern look to a more traditional touch. It can also provide the best resale value for your home because it is such a versatile color.
  • White is another versatile shade that goes with classic or contemporary facades. It doesn’t draw as much attention, though, but it would be a safe option.
  • Navy blue can be sleek or traditional, depending on the rest of your home. If a black door wouldn’t complement your home’s exterior, consider navy blue instead.
  • Yellow is a cheerful color that’s sure to attract attention. It’s more of a gamble to go with this color since not every potential buyer will like it.
  • Red is eye-catching. A red front door adds a traditional look to your home, and you can tone it down with a burgundy color if true red seems too bright.

Also consider leaving your front door its natural wood tone, which can give your home a warm and inviting appeal that complements other features of the exterior.

Replacing your garage door 

Initially, you might not think that your garage door increases the value of your home. However, as the largest entryway of your home, the garage door gets noticed first because it’s the focal point of your house. Your garage door distinguishes your home from the other houses on your block. If you want to quickly increase the resale value of your home, you’ll want to make the most of this feature. 

According to Remodeling Magazine’s 2020 Cost vs. Value Report, replacing your garage door has an average ROI of 97.5%, and ranked number two when compared to 21 other home improvements. The report’s data came from across 101 US markets and focused on the ROI at the time of sale. If you are planning on selling your home and have to decide between different renovations, consider a new garage door for the most added value.  

Another 2018 industry study examined real estate agents’ estimates of perceived home value based on exterior appearance. Respondents were also asked if garage door appearance made a difference in the listing price they would assign to a house. The study indicated that a new garage door could result in up to a 4% increase in a home’s perceived selling price, which is an $8,000 bump on a $200,000 home.

 A few interesting things being done with garage doors include:

  • Increased Size: Bigger garage doors help homes stand out more, and homeowners can do more creatively with them.
  • Bold Colors: Bright and bold colors now can complement the color of your home, or you can build a concept around the color of your home.
  • Faux Wood: You can install fiberglass or steel garage doors that look like wood garage doors. This gives your home a new level of sophistication.
  • Windows: Large Windows on your garage door improve the aesthetic of your home, and provide light into your garage so that it’s no longer a dark space

Installing fiberglass attic insulation

While energy efficiency is still not the sexiest selling point of your home, installing fiberglass attic insulation saves energy and provides a big payback on your investment. According to Remodeling Magazine’s Cost vs. Value top trends report, fiberglass attic insulation gained the top return on investment among the 30 projects in this year’s report. 

The national average ROI in the U.S. for a fiberglass insulation upgrade is a whopping 116.9%, meaning this upgrade more than pays for itself. The average national cost of installing blown-in insulation in an attic is $1,268, and the average of a home’s retail value increase for this project is $1,482, according to Remodeling Magazine’s Cost vs. Value report.

Replacing your windows

Replacing your windows is another way to save energy and increase your home’s resale value. Window replacement is consistently listed as a top ten home improvement project that increases home resale value. If you spend $15,000 to replace your home’s windows, your home could rise in value by $11,000, which is an ROI of 74%. Replacement windows offer homeowners the chance to update the look of their homes.

You might consider investing in some custom window shapes to add architectural interest or amp up the natural light. The options and ability to customize with replacement windows are endless. Replacement windows will also increase your overall energy efficiency. From Low-E glass to UV and solar blockers, window technology is continuously evolving to make homes look good while saving on energy costs. According to HGTV, you will see a reduction in your utility bill from 7% to 15%.

Replacing the windows can help your Oakland County MI home stand out in the market and increase your home’s value before you list it. And since most buyers are looking for houses that are not only move-in ready but updated with modern amenities, new windows can help improve your home’s resale value and marketability.   

Remodeling your kitchen

Since the kitchen is central to the home and commonly used by families, it’s one of the first things many house hunters look at. Whether you’re renovating your kitchen to help your home sell or to create the kitchen of your culinary dreams, there’s some planning and budgeting you’ll want to do first. Remodeling your entire kitchen can get expensive, but small renovations can make your home more buyer-friendly.

According to HomeAdvisor, the average cost of remodeling your kitchen ranges from $13,343 – $37,701. How do you know what a realistic budget is for your kitchen renovation? A good rule of thumb is to spend 5% – 15% of your home’s total value on your kitchen renovation. For example, if your house is valued at $200,000, a decent kitchen renovation budget would be 10% of that value, so about $20,000.  

Bathroom addition or remodel

When thinking about selling, many homeowners consider areas in their home that might need a little pre-listing TLC, and bathrooms are commonly on the list. In fact, 26% percent of sellers make some sort of improvement to a bathroom before selling, according to the Zillow Group Consumer Housing Trends Report 2018.

Remodeling a bathroom before resale can help attract more buyers, but getting every dollar invested back at the time of resale is not guaranteed. Zillow data shows that bathroom remodels yield the biggest returns in terms of boosting your home’s resale value. For minor cosmetic changes, you’ll see a $1.71 increase in home value for every $1 you spend. This includes things like painting and refinishing cabinets, swapping out the mirror, or upgrading hardware. In most cases, a renovation will be cheaper than an addition.  

The cost for adding a bathroom can vary widely based on a number of factors. The lowest cost is going to be around $3,000. This is a good estimate if you’re taking an area that you already have all marked out that has all the necessary components. If you need to add an entirely new space totally from scratch, the cost will be closer to $25,000.

It’s important to note that you’ll get diminishing returns in terms of value if you already have a house that is among the highest in value of any other on your street. The conventional wisdom on this is that you’ll add about a fifth to your house’s value, in general, if you add a full bath. If you add a half bathroom, then you’ll get about a tenth of the value added on.

The takeaway

No matter if potential buyers view your Oakland County MI property in-person or virtually, you’ll want to make sure it’s in top condition when it comes time to sell. If you want to get the most return on your investment, focus on features that most home buyers really want to see. Knowing design trends will give you the opportunity to make changes to your home based on where your needs and your potential buyer’s desires come together – greatly increasing your home’s value. 

Consumer tastes can vary by region, so be sure to consult with your Oakland County real estate agent to find out which home features are in high demand in your area, advises Dr. Jessica Lautz, vice president of demographics and behavioral insights for the National Association of REALTORSⓇ. Your agent will be able to help you make the most informed choices when it comes to remodeling or renovating your home.  

When you’re ready to list your home, contact Oakland County REALTOR – Tom Gilliam to help you navigate the competitive Oakland County MI real estate market. Tom can help determine the value of your home and also make suggestions on how you can command a higher asking price.   

Partner With one of the Most Trusted REALTORS® in Oakland County MI – Tom Gilliam 

Tom Gilliam is proud to be one of the top-rated REALTORS® in Oakland County MI, offering his guidance and expertise to home buyers and sellers for over 20 years. Tom understands that buying or selling a home is a significant financial and life decision and that you are looking for someone you can trust. As your agent, Tom will protect your interests, advocate for you, negotiate on your behalf, and will always go the extra mile to ensure the best results possible. Get the process started today by contacting Tom at (248) 790-5594 or you can get in touch by email.

Tom Gilliam, REALTOR®
RE/MAX Classic
29630 Orchard Lake Rd.
Farmington Hills 48334
Direct: 248-790-5594
Office: 248-737-6800
Email: Tom @ Homes2MoveYou.com
License #314578 

Oakland County MI First-time Home Buyers: FHA Loans 101

Oakland County MI First-time Home Buyers: FHA Loans 101

 Oakland County MI First-time Home Buyers: FHA Loans 101

While most people consider homeownership the American dream, many are not able to qualify for a conventional loan, which is a type of mortgage loan that’s not insured or guaranteed by the government. Unlike conventional loans, FHA loans are backed by the Federal Housing Administration and help to take some of the risk from lenders and place it on the government for higher-risk borrowers. Although the government insures the loans, they are actually offered by FHA-approved mortgage lenders.

The FHA, which is part of the U.S. Department of Housing and Urban Development (HUD), offers a wide range of loans to help different groups of people. FHA loans are helpful for Oakland County MI home buyers with limited savings and/or lower credit scores as they allow for down payments as low as 3.5% and a 580 FICO.  These types of loans are not only for first-time home buyers. Repeat buyers can get an FHA loan as long as they use it to buy a primary residence. FHA loans can also be used to refinance your home or for repairs on an older home.  

How FHA Loans Work

The Federal Housing Administration’s flexible underwriting standards allow borrowers who may not have stellar credit, high incomes, and/or cash savings the opportunity to become homeowners. With an FHA loan, borrowers must pay mortgage insurance, which protects the lender from a loss if the borrower defaults on the loan. The cost of insuring your loan is generally higher than with conventional mortgages, and you can expect to pay higher mortgage insurance premiums (MIPs) each month. Government-guaranteed mortgages are not available on high-priced homes, and you can see the cap in your area using the online tool on HUD’s website.

The differences between an FHA loan and a conventional loan 

When buying a home in Oakland County MI, It’s easier to qualify for an FHA loan than for a conventional loan, which is not insured or guaranteed by the federal government. FHA loans require mortgage insurance regardless of the down payment amount, compared to conventional loans where you need mortgage insurance for down payments under 20%. FHA mortgage insurance payments will be the same regardless of your credit score.

FHA loans

  • More rigid property standards
  • Lower credit scores allowed 
  • Somewhat higher down payment needed
  • Private Mortgage Insurance (PMI) is required for down payments of less than 20%

Conventional loans

  • Higher credit score needed (at least 620)
  • Slightly smaller down payments allowed
  • Private Mortgage Insurance (PMI) is required for down payments of less than 20%
  • More liberal property standards

One of the biggest advantages of an FHA loan is that only a 3.5% down payment is required for a home loan purchase (with a minimum 580 credit score). This is a lot less than other conventional types, which will ask anywhere from 5 to 20%. It’s worth noting that If you were to combine the FHA loan with a down payment assistance program, it could potentially mean that you would only need to put 0.5% down.

With an FHA loan, the down payment doesn’t have to come directly from the borrower; It can come from a family member, employer, or charitable organization as a gift. Also, if you prepay your mortgage before a certain amount of time, many conventional lenders will charge a prepayment penalty. With an FHA loan, there is no penalty for prepayment.

FHA loan limits for Oakland County MI in 2021

No matter which type of FHA loan you’re seeking, there will be limits on the mortgage amount. These limits vary by county. Limits for FHA Loans in Oakland County, Michigan range from $356,362 for a 1 living-unit home to $685,400 for 4 living-units.   

The different types of FHA loans

Loan qualification guidelines are fairly similar across the various types of FHA loans available:

  • Fixed-rate loans – Available in fixed-rate terms between 15 and 30 years, FHA mortgages come with a low down payment advantage- one of the lowest on the market.
  • Adjustable-rate loans – An FHA adjustable-rate mortgage (ARM) comes with an interest rate that “adjusts” over the loan’s term; generally increasing. Many people are drawn to ARM mortgages because they offer initial rates significantly lower than a fixed-rate product.
  • FHA 245(a) loan – An FHA 245(a) loan packs a fixed rate graduated-payment mortgage, also known as a “growing equity mortgage.” Graduated payment mortgages structure your monthly payment to scheduled increases over the life of your loan. As your loan amortizes, you’ll reach a point in time when your equity starts gaining traction. These mortgages are set up in 30-year terms, but it’s not uncommon to pay off the loan early depending on which graduated plan you choose.
  • FHA energy efficient mortgage – The FHA Energy Efficient Mortgage (EEM) program is a financing add-on that allows FHA borrowers to roll the cost of approved energy efficiency upgrades into their home loan. Homebuyers commonly use this program to update their home’s windows, HVAC systems, and insulation.
  • FHA loans for mobile homes – It is possible to use an FHA loan to finance a manufactured or mobile home, but finding a lender willing to approve financing may take a few tries.  
  • FHA loans for condos – Many are surprised to find that they can purchase a condo using the FHA loan. Since some condo associations enforce rules regarding property sales and improvements, however, there are some restrictions when it comes to using your FHA loan for a condo.
  • FHA 203(k) – Compared to other types of FHA products, 203(k) loans offer the opportunity for buyers to purchase fixer-uppers while financing additional funds for home repairs and renovations into the mortgage.
  • FHA reverse mortgage (HECM) – FHA Reverse mortgages are used as a home equity conversion mortgage (HECM). This allows a qualified homeowner to receive monthly cash disbursements by liquidating the equity they’ve built up in their home.

How to qualify for an FHA loan

Getting prequalified for an HOA loan is a simple and quick process, and can even be done over the phone. Your loan officer will require information about your basic finances, such as debt, income, and assets.  After running these numbers and evaluating them, he/she can tell you an amount you may qualify to borrow. To be eligible for an FHA loan, borrowers must meet the following lending criteria:

  • A FICO score of 500 to 579 with 10 percent down or a FICO score of 580 or higher with 3.5 percent down.
  • Verifiable employment history for the last two years.
  • Income is verifiable through pay stubs, federal tax returns, and bank statements.
  • The loan is used for a primary residence.
  • The property is appraised by an FHA-approved appraiser and meets HUD property guidelines.
  • Your front-end debt ratio (monthly mortgage payments) should not exceed 31% of your gross monthly income.
  • Your back-end debt ratio (mortgage, plus all monthly debt payments) should not exceed 43% of your gross monthly income. (Lenders may allow a ratio of up to 50% in some cases).
  • If you’ve had a bankruptcy, you will need to wait 12 months to two years to apply, or three years after a foreclosure. (Lenders may make exceptions on waiting periods for borrowers with extenuating circumstances).

Your credit score

The minimum credit score for an FHA loan is 500. If your score falls between 500 and 579, you can still qualify for an FHA loan, but you’ll need to make a larger down payment. Again, these are FHA guidelines — individual lenders can opt to require a higher minimum credit score.

Your debt-to-income ratio (DTI)

The FHA requires a DTI of less than 50, meaning that your total monthly debt payments can’t be more than 50% of your pretax income. This includes debts that you aren’t actively paying off.

FHA closing costs

FHA closing costs include the mortgage insurance (MIP), lender and third-party fees, and prepaid items that are due when signing your mortgage paperwork. Here’s the breakdown:

  • FHA mortgage insurance premium (MIP) totals 1.75% of your loan amount, due at closing. You can also finance this charge as a part of your loan. You’ll also find that an additional ongoing FHA MIP of 0.45% to 1.05% is built into your monthly payment. While the rate remains the same for the life of the loan, the premium is adjusted annually based on the remaining principal loan balance.
  • Lender fees typically include an origination fee, underwriting fee, document preparation fee, supplemental loan origination fee (for FHA 203(k) renovation loans only), and interest rate lock fee.
  • You may also decide to buy discount points (a prepaid interest that lowers your loan’s interest rate), which will be listed as a lender fee.
  • Third-party fees include fees for services offered by other providers and could include Title insurance policy premium (for the lender and an option for the buyer to purchase as well), notary fee, credit report fee, Recording fees, appraisal fee, courier fee, attorney fees, and flood certification fee.
  • Prepaid items are fees that are paid in advance, with some shared between buyer and sellers such as tax and insurance escrow deposit, flood and hazard insurance premiums, real estate taxes, and per diem interest.

In summary 

Whether an FHA loan vs a conventional loan is the better choice, when buying a home in Oakland County MI, really depends on the situation as each borrower, financial situation, and home are different. Likewise, each loan has its benefits. An FHA loan is more flexible to obtain, but no matter how large your down payment, you will have to pay mortgage insurance. Whereas, a conventional loan requires a higher credit score and more money down, but doesn’t have as many provisions. You’ll want to speak with your mortgage professional to discuss which loan makes more sense for your individual financial situation and needs.

Partner with award-winning Oakland County MI REALTOR® – Tom Gilliam   

Tom Gilliam is proud to be a trusted REALTOR® in Oakland MI for the past 20 years – offering his guidance and expertise to both home buyers and sellers. Tom understands that buying or selling a home is a significant financial and life decision and that you are looking for someone you can trust. As your agent, he will protect your interests, advocate for you, negotiate on your behalf, and guide you towards a smooth and successful transaction.   

Whether you are ready to buy a home in Oakland County MI or its time to list your your current property, feel free to reach out to Tom directly at (248) 790-5594 or you can get in touch with him by email.

Tom Gilliam, REALTOR®
RE/MAX Classic
29630 Orchard Lake Rd.
Farmington Hills 48334
Direct: 248-790-5594
Office: 248-737-6800
Email: Tom @ Homes2MoveYou.com
License #314578 

 

 

Why Homebuyers Should Consider New Construction Homes in Oakland County MI

Why Homebuyers Should Consider New Construction Homes in Oakland County MI

New Construction Homes in Oakland County MI. Explore new homes and new construction residential developments across Oakland County MI. Whether you’re in the market for a brand new condo/townhome, a home on the golf course or waterfront, or a custom luxury home with the latest designer features and amenities, Oakland County currently has 243 new home communities featuring a wide range of residential choices.

Top builders in the region include M/I Homes, Hunter Pasteur Homes, Taylor Morrison, Toll Brothers, Singh Homes, Robertson Brothers, Pulte Homes, and Allen Edwin Homes, just to name a few. If you are ready to begin your search for new homes for sale in Oakland County, you’ll want to partner with an experienced agent who can help you find the perfect home for your family in the community you want to live in.

Experienced Oakland County MI REALTOR® Tom Gilliam can give you an overview of all of the amazing new home developments in Oakland County and help you narrow down which neighborhoods would be the best fit for your lifestyle and needs. For more information about new construction homes in Oakland County MI, give Tom a call today at (248) 790-5594 or you can get in touch with him here!

On our easy-to-use website, you’ll be able to search the MLS for the most accurate and up-to-date listings for new construction homes Oakland County MI. You can save your search, create a free account, and receive email alerts of new listings that match your home criteria delivered directly to your email.

Browse New Construction Homes in Oakland County MI 

$575,000
Single Family Home For Sale
Active
3
BEDS
3
TOTAL BATHS
3,121
SQFT
2077 Applebrook Drive
Commerce Twp, MI 48382
Birkdale Pointe Sub No 1 Subdivision
New Listing - 3 weeks online
$299,900
Single Family Home For Sale
Active
3
BEDS
2
TOTAL BATHS
1,533
SQFT
4785 Half Penny Court Court
Commerce Twp, MI 48382
Mt Royal Hills Subdivision
$750,000
Single Family Home For Sale
Active
4
BEDS
4
TOTAL BATHS
3,380
SQFT
4461 Forest Hill Drive
Commerce Twp, MI 48382
Whispering Woods Commerce Subdivision
$599,900
Single Family Home For Sale
Contingent Continue To Show
5
BEDS
4
TOTAL BATHS
3,040
SQFT
1602 Wandrei Court
Commerce Twp, MI 48382
Crystal Shores Estates Occpn 776 Subdivision
New Listing - 5 days online
$475,000
Single Family Home For Sale
Active
3
BEDS
3
TOTAL BATHS
2,817
SQFT
5350 Bridge Trail W
Commerce Twp, MI 48382
Bridge Pointe W Sub No 2 Subdivision
$479,900
Single Family Home For Sale
Active
4
BEDS
4
TOTAL BATHS
2,443
SQFT
1600 Salishan Lane
Commerce Twp, MI 48382
Huron Hills Condo Subdivision
$589,900
Single Family Home For Sale
Active
4
BEDS
3
TOTAL BATHS
2,461
SQFT
360 Creedmore Street
Commerce Twp, MI 48382
 
New Listing - 3 weeks online
$269,900
Single Family Home For Sale
Active
3
BEDS
2
TOTAL BATHS
1,500
SQFT
4029 Watuga Street
Commerce Twp, MI 48390
Wenonah Hills Subdivision

Reasons to Consider New Construction Homes in Oakland County MI 

New Construction homes in Oakland County MI will typically include highly-rated features and the latest amenities on the market such as energy-efficient appliances, well-insulated windows, and other sustainable features. The latest security features have also been incorporated into many new homes such as state-of-the-art alarm systems, smart locks, and other safety features that often come standard. Not to mention that many of these new homes are nestled in the safety and privacy of private gated communities. 

New Construction Homes Oakland County MI

Another perk to buying a new construction home in Oakland county MI over a resale home is that maintenance costs will be significantly lower. Even a home that is only 10 years old will begin to show signs of aging. With an older home, buyers are often faced with maintenance issues that can come with staggering price tags such as older HVAC systems, worn-out roofs, and rusting pipes. With new construction, every feature of the home is brand new and designed with the latest materials. 

Oakland County MI New Home Community Amenities

You’ll also want to consider the type of amenities that you want in your new community. Many new home developments will feature its own set of amenities such as common green spaces, walking trails, tot lots, community swimming pools, tennis courts, recreational buildings, and more. An experienced Oakland County REALTOR® can help educate you about each development, including the types of homes and features offered, the builders, schools, community amenities, the surrounding area, and more.  

PARTNER WITH TOP Oakland County MI REALTOR® – TOM GILLIAM

Tom Gilliam - Oakland County MI REALTORAlthough the real estate market is always changing, Tom’s commitment to exceptional, personalized service is something you can always count on. Tom has helped hundreds of families find and get into the perfect home for their lifestyle and needs. He will always take the time to listen to your needs and concerns, keep you informed every step-of-the-way, and will do whatever is necessary to facilitate a smooth and successful transaction. With Tom as your personal agent, you can be assured that he will protect your interests, advocate for you, and handle all the details of your new home purchase from start to finish.

If you’re looking to sell your home in Oakland County MI, Tom incorporates the most effective and cutting-edge marketing approaches to marketing your home and getting it in front of as many potential buyers as possible. Your property will be listed in hundreds of locations all around the Internet and will get exposure on all the major sites such as Zillow, Trulia, Realtor.com, Movato.com, Homes.com, and other many other sites that homebuyers frequently visit. Tom is 100% committed to getting your home SOLD for the highest market price in the least amount of time possible. He is an expert negotiator and will work hard to protect your investment by making sure that no money is left on the table. 

To find out more about buying a new home in Oakland County MI or selling your existing property, please call Tom directly at (248) 790-5594 or you can get in touch with him here!

Tom Gilliam, REALTOR®
RE/MAX Classic
29630 Orchard Lake Rd.
Farmington Hills 48334
Call: 248-790-5594
Office: 248-737-6800
Email: [email protected]
License #301741

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