Detroit Real Estate

I got a call from my buyers over a month ago saying their mortgage deal was falling apart - what do we do?  I told them to calm down and tell me what was happening.  They had a pre-approval letter that said they could buy a house at the purchase price we offered and yet now the bank was saying no. 

The bank was saying said they no longer had the proper debt ratios.  They had too much debt when they included the house payment, insurance, and taxes. (as compared to their income)  My clients income had been decreasing over the last two years because of Detroit's poor economy.  We only could use her income because her husband had bad credit, so we could not use his income.

The two issues we had were the insurance was too high, and the house payment was now too high.  So here were my suggestions.

1.)  Originally the client had gotten a quote of $1500 for insurance because the house was so far out into the country.  So I coached my client to start shopping hard for an insurance policy.  Some of the tricks to get a home insurance down is to get a high deductible.  A higher deductible will have a lower insurance premium.  In their case they could switch back to a lower deductible after the loan closed.  I also said to check what would happen if they would switch their cars over to the same policy.  Neither the husband or wife smoked.  The house has updated electric and plumbing.  The house had smoke alarms hard wired in.  We were able to get the home insurance down to $550.  A savings of almost a $1000.

2.) In order to get the house payment down the buyers borrowed money to buy down their interest rate.  Lower interest rate meant lower payment.

3.) Last trick we had to do was to pay off their higher credit cards (the ones with the high monthly payments).  My clients really wanted the home so they liquidated some of their retirement accounts, (some people get a gift to pay off the credit cards)

My clients closed on the house last week.  Sure we had a lot of issues that we had to find solutions for.  But in the end we closed because the clients worked hard to overcome them.

    They got their house!

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