Buying While Selling

Buying your new home while selling your old home can seem daunting if not impossible. It is difficult to feel in control with so many factors at play. But there are really only three scenarios: You sell your old home before you buy your new home; You buy your new home and sell your old simultaneously (same day closings); You buy your new home before you sell your old home. Few people choose to sell their old home before purchasing the next for fear of homelessness. Moving your belongings into storage and finding temporary living accommodations is not for everyone. But it does …

Buying beats renting in less than 2 years

Buying beats renting in less than 2 years In 70% of the major markets across the nation, it takes just 1.9 years to break even on a home purchase (in the Twin Cities it’s 2 years exactly), compared to renting the same house. A Zillow analysis of rent-versus-purchase costs examined data through the fourth quarter to determine the “break-even horizon.” Zillow’s home search tools are weak but their research is excellent.. Considering the largest 35 metros, the home purchase break-even point is longest in Washington D.C. (4.5 years) and shortest in Dallas (1.3 years). You would also need to live in …

What Does Renewing Your Tabs in MN Have to Do With Buying a Home

If you’re like most people this year, then auto tabs have nothing to do with buying a home but if you’re planning on buying a home in MN, then the state’s new requirement that you show proof of insurance to renew your tabs gives you an excuse to talk to your insurance agent on upcoming insurance savings on your home.  We’ve discussed saving money on utilities but homeowner’s insurance is an overlooked element of saving money on your monthly mortgage payment. Each person’s situation is unique but here’s a sample of some things you can learn about on your call: …

Why a Fed Rate Hike Won’t Affect Mortgage Rates in the Short Term

Normal media channels do a terrible job of explaining what affects mortgage interest rates. And rest assured, every time the Fed talks about or raises interest rates, the cable news networks start shrieking about how mortgage rates are going up in a cloud of their own ignorance.  An appetite for investors to buy Mortgage Backed Securities (MBS) and US Treasury Notes, particularly the 10 Year Treasury Note (10 Year UST), are in fact the driving factors of mortgage rates and that appetite continues to be healthy.  When people invest in Treasuries and MBS, the yields drop and when their yields …

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Length of Self-Employment Mortgage Guidelines

With employers getting more and more creative in the way they hire, more and more would be homeowners with stable income find them self asking, “How long do I need to be 1099’d to get a mortgage or how long do I need to be self-employed to get a mortgage.”  The guidelines for this were static for a long time and then loosened during the 2000’s.  Since the Great Recession, they tightened and have finally normalized to something predictable (and rational I might add). While there are emerging subprime lenders that will allow bank statements as an alternative form of …

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Think You’re Buying a Townhome/Rowhouse?….Think Again.

In the world of real estate transactions involving condos and townhouses, if it looks like a duck, talks like a duck and walks like a duck…sometimes it’s not a duck. Frequently enough, some home buyers want to split hairs between single family residence living and the condo life. They make a slight compromise on privacy for the sake of limited maintenance. They seek a larger floorplan perhaps. There are many reasons but in the end, they seek a townhome or row house. Excitedly, the purchase agreement is executed, the inspection is scheduled and it’s often at this point, . . …

How Underwriters View Owner Occupied Vs. Non-Owner Occupied Transactions

There are many times when a homebuyer truly intends to occupy a home as a primary residence only to be told by a mortgage underwriter and subsequently their loan officer that their claim of having the intention to occupy a property as a primary residence was not adequately credible. This often happens when a property purchase is being made while another property is being retained. The consequence of a decision on the part of the underwriter to not agree with a homebuyer’s intent to occupy a property as a primary residence can lead to larger down payment requirements and inferior …

A Deeper Examination of Schools Near Your Next Minnesota Home

We highly value the feedback we get on how we can improve your home search tool, the Home Scouting Report®.  Over time, your recommendations have led to many additions (all available by clicking on our ugly mugs after you’ve logged in).  Now, we’ve added another interactive research tool; The Minnesota Report Card from the Minnesota Department of Education. While you’ve always been able to get basic school information via the Map View of your Home Scouting Report® but with this new tool, you’ll have access to these additional resources: My School – Demographics, trend data, graduation rates, contact information and …

How to Refinance Your LLC Properties’ Mortgages into Your Own Name

Attempting to navigate the process of refinancing mortgages out of the name of a LLC and into your own name with a conventional mortgage can be a lot like walking across a minefield with a blindfold on.  Perhaps one of the main reasons for this is that the guidelines that affect these transactions have trickled out here and there, over a long period and have been amended periodically.  Here is a summary of guideline considerations to take into account when considering refinancing your investment property loans from a LLC into your own name: Are LLC’s eligible to be refinanced from …

Long Term Mortgage Rate Forecast Going Into Winter Market

As the winter weather hits or threatens to hit, many people who have actively or passively been searching for a home ask, “Should I just postpone the idea until spring?”  There are many reasons to either wait or hasten the purchase of a home.  If you happened to be considering mortgage rates as one variable in your decision, we thought that we’d share the one reliable forecasting model that we follow for long term mortgage rate forecasts: Mortgage Rate Forecast for 30 Year Conventional Loan 30 Year Conventional Mortgage Rate. Percent Per Year Average of Month. Month Date Forecast Value …

Fannie Mae and Freddie Mac Near Deal to Bring Back 3% Down Financing

The Wall Street Journal published that a deal between the FHA, Fannie Mae and Freddie Mac is much closer to becoming real than had been anticipated. Nobody knows the exact timing of the implementation of the deal but there are two significant parts that will benefit the consumer. The first element has to do with making it crystal clear to lenders what is expected of them when delivering loans to Fannie Mae or Freddie Mac or getting them insured by HUD. This clarity will mean that lenders won’t be afraid of loan risk nearly to the extent that they now …

How to Improve Your Credit Prior to Buying a Home

iLoan recommends iQualifier as a powerful credit analytics tool to show you the way. If you’re looking to pre-qualify for a home and want a lower rate or better loan program, iLoan recommends iQualifier to enable you to analyze your credit history with the same tools that lenders and credit agencies use. Additionally, it takes you beyond that analysis demonstrating how different financial decisions may affect your credit in the months ahead. iQualifier can help you: • Better understand your credit standing • Improve your financial decision making • Achieve your financial goals (& target credit score) • Save money …

Top Three Reasons to Feel Good About Buying a Home in the Twin Cities

It doesn’t happen very often where, in a compact period of time, I see a wealth of reliable data released that shed such sunny light on the decision to buy a home in the Twin Cities but lately that has been the case.  If you’ve been contemplating such a decision, here are 3 great reasons to feel good about your decision and its timing in ascending order. Reason 3: CNBC Ranks Minnesota as a Top State for Business. CNBC’s announcement may seem boring, and it definitely is, but from the perspective of a homebuyer or homeowner, it’s critical.  This is …

Today’s Rate vs. Today’s Rates – Mortgage as a Second Language

The mortgage industry is almost cruelly filled with nearly impossible jargon.  Most of it is inconsequential from the consumer’s perspective and only serves to make communication easier for industry insiders.  However, when it comes to the concept of choosing an interest rate from your lender par rate, buy ups, buy downs, discount points and lender credits are a must know. Definitions: Today’s Rate – “Today’s Rate” is a myth perpetrated as a reality.  It is something the mortgage lending industry came up with because it’s an intellectually condescending industry that doesn’t believe that its clients can do math or understand …

Your Monthly Housing Payment Beyond Principal Interest Taxes and Insurance: Utilities

Nobody wants to be house poor.  Therefore, understanding what your mortgage payment will be when buying a house is only part of what should be considered when contemplating one’s housing costs.  Getting quotes on phone service, security systems, internet and cable are easy enough but utilities like heating and cooling costs can be a little trickier.   Taking these costs into consideration is important though because miscalculation can lead to unexpected payment shock.  Should that payment shock occur, it’s often too late to do much about it so it’s necessary to be proactive. Some of the required seller disclosure items are …

The iLoan Lock and Shop Program

Many buyers are concerned about rising mortgage rates and the implications on their plan to buy a home or sell their home and then buy another home.  The frequent question is, “Can I lock in my interest rate before I find my home?”  Typically one can’t do this until they have a fully executed purchase agreement and this amplifies a homebuyer’s fear prior to going under contract to buy their dream house.  Now, with the iLoan Lock-N-Shop program, this fear can be put to rest. Here’s an outline of how it works: The lock may be for 60 or 75 …

Down Payment Assistance Programs in MN

Deb Muelken (NMLS ID 364933) of iLoan (NMLS ID 4474) outlines the various options for down payment assistance to use with mortgages in Minnesota on the Twin Cities Real Estate Radio Show.  For more information on how these programs might be of help to you, contact Deb at 651.353.8531 or by emailing her at deb@iloanhomemortgage.com! Trouble listening?  Click Here

Fannie Mae Increases Down Payments on MyCommunity® and Standard Loans

In another backward-thinking move, Fannie Mae has very subtly announced that they will be increasing their down payment requirements by decreasing their maximum Loan to Value Ratios for MyCommunity® mortgages and for standard mortgages on 1-unit primary residences effective on or after the weekend of November 16, 2013.  The previous allowed down payments were at 3% based on a Loan to Value Ratio (LTV) of 97%. The difference between 95% LTV and 97% LTV financing may sound slight but on a macroeconomic level, it’s huge.  It will postpone purchases for multitudes of buyers; particularly first time homebuyers who might find …

The FHA 1 Year Waiting Period After Short Sale, Bankruptcy or Foreclosure – Back to Work

Where was this three years ago?  Better late than never I suppose.  FHA is now insuring loans to homebuyers who have experienced an Economic Event (Short Sale, Bankruptcy, Deed in Lieu of Foreclosure or Foreclosure) in the past and can document that (1) their certain credit impairments were the result of a Loss of Employment or a significant loss of Household Income beyond the borrower’s control, (2) the homebuyer has demonstrated full Recovery from the event and, (3) the homebuyer has completed housing counseling. FYI, in the event of a short sale, this is for buyers who DID have late …