Joshua-
Please contact me as soon as possible. I am a retail loan officer with Flagstar Bank, which is based in troy, MI. I have about a 3 page spreadheet of Flagstar Bank REOs, each of which qualify for 100% financing, with no Mortgage Insurance and very little bank fees.

Please email or call me and I will email you the list - no charge or obligation.

Luke Allison
Flagstar Bank
828-777-8828
Luke.Allison@flagstar.com

Joshua:

With a 670 credit score you can easily qualify for FHA financing at your price point. This will be your least costly avenue with interest rates and downpayment.

http://www.michigan.gov/mshda/0,1607,7-141-45866_45870-172114--…

This is Michigans housing finance agency which has downpayment assistance programs available to first time home buyers.

Without knowing the condition of the property, it would be unfair to give advice. Ask your agent to give you comparable sales in the neighborhood over the past three months to determine a fair asking price. Some REO's are priced way below market value and others are overpriced. It depends on the house/lender.

Hey Joshua,
Way to take the proactive approach and ask a lot of questions and congrats on the decision to purchase. Hopefully I can provide a little insight.

Maureen is right about incentives. The tax credit is about the only thing I know of going on. With respect to mortgage incentives, while there aren't really any special programs specifically for 1st time buyers, there are a handful of programs designed with the first time homebuyer in mind - i.e. less credit restrictions, flexible down payment guidelines, etc.

If you are seeking a conforming 30 yr fixed you can expect to need about 10% down and you will pay about an additional 1% in points due to your credit score. You are better off going with an FHA loan because you wont be penalized at all due to your score and up until Jan 1 you only need to put 3% down (that goes up to 3.5% next year). Not to mention rates right now on FHA are in the mid to low 5% range.

You may also want to look into a MSHDA loan or Rural Development if you are short on money for a down payment. I handle both of those types of loans and would be glad to take a look at your situation. I'm based out of Ann Arbor but I can do mortgages anywhere in the country.

As far as your last question, hopefully you are working with an agent. That is who should be giving you advice on putting in an offer. That offer depends on a number of factors including but not limited to: the condition of the property, how long it has been on the market, the bank that owns it, and how competitively it is priced. What I'm seeing more and more these days with REO's is that the banks are pricing them to move quickly and to attract multiple offers. You should get a yes or no responce regardless of the amount, but don't be surprised if it takes a full price offer or more to get the house. Again, I'd recommend working with a buyer's agent on this one.

Good luck,
Tony

Joshua,

Congratulations!

1 There is nothing specific that I know of for Michigan buyers, but there is a federal $7,500 tax credit that you can still use in the first half of this year.

2. That seems to be changing daily right now. Why are you weary?

3. I don't work in your area, but I do work with Detroit lenders who can lend anywhere in the state. If you need a reference, please drop me a line through my contact button on my profile.

4. Don't worry about upsetting a bank. They don't have emotions. They are a business. Ask your agent to guide you on the offer.

Good luck!