Developing a Lease-to-Own Market

A lease-to-own (LTO) transaction is one in which a potential home buyer occupies the home as a tenant but has an option to purchase it within a specified period at a specified price. In exchange, the potential buyer pays a non-refundable option fee upfront plus a monthly rent. In a recent article, I noted the intense interest in LTO deals today by wannabe home buyers who can’t qualify for the mortgage they need to make a purchase now. Despite the large demand, not many LTO deals are being done. They are very complicated and most potential buyers and sellers don’t …

The MN Mortgage Financing Contingency – What it is and what it isn’t

The “Written Statement” of Lender Commitment is a misunderstood, under-utilized, and yet incredibly significant component of the Minnesota Association of Realtors’ (MAR) Residential Purchase Agreement. Despite the almost universal acceptance of the MAR forms in MN purchase transactions, the “Written Statement” or Lender Commitment Letter component is seldom explained to a buyer or seller. The Financing Contingency (Conventional, FHA or DVA) which functions to describe the financing that a buyer is attempting to obtain, contains the clause referring to the Lender Commitment Letter (referred to as a “Written Statement”.)  The Financing Contingency requires an option to be chosen at the …

Buying a Home & Getting a Mortgage with a H-1B Visa

These days, any time a lender sees a square peg and a round hole, they tend to run for the hills.  In the case of homebuyers seeking a mortgage with H1B visa status, too often this is the case.  If they’d patiently take the “outside in method” of loan structuring (start with Fannie Mae/Freddie Mac, then check mortgage insurance guidelines and then reference the lenders underwriting guideline overlays), they’d find that these waters are not that hard to navigate and that round hole isn’t as round as it may appear. An H1B visa is a work permit issued by a …

Low Appraisal Challenges in a Newly Inclining Real Estate Market

After half a decade of falling home values, the real estate industry has become well versed in the language of declining markets. Buyers have learned to be skeptical, buyers’ agents have sharpened their teeth advocating for lower purchase prices and appraisers have become increasingly conservative in order to meet the demands of an equally conservative lending industry. Enter: 2012 Twin Cities Real Estate Market. New to the scene and largely forgotten by all arrives a balanced market which quickly reveals itself as an inclining market. This new market was initially greeted with skepticism and disbelief by much of the real …

How to Choose a Mortgage Lender When Buying Your Home

This episode of the Twin Cities Real Estate Radio Show covers different considerations when choosing a mortgage lender for a home purchase. Charles Dailey – Branch Manager, Loan Officer, Certified Military Housing Specialist – CA DOC, MN DOC & WI DFI The Home Buyers Scouting Report® is provided directly to the buyer by HBM II, a licensed national real estate brokerage service company, not to or through a lender. The FREE home finding service is provided directly to prospective homebuyers by HBM II and its real estate brokers, as part of their ordinary real estate brokerage services. HBM II, Inc. …

Fannie Mae Tightens Condo Mortgage Underwriting. . . . Again!

Many would say that perhaps Fannie Mae should have become tighter on their guidelines for condos back in 2008 and now that they’re seeing recovery, start to loosen up (kind of like the private mortgage insurance companies did).  The opposite is happening as clearly Fannie Mae wants to limit their exposure to condos in their portfolio.  Periodically, changes are made to Fannie’s underwriting guidelines and their automated underwriting software.  Some are small and some are large and impactful.  Condo buyers beware as they snuck this one in (effective October 20th): “A limited project review will no longer be permitted on …

New Rules: If You Want an Adjustable Rate Mortgage (ARM) You Better Have Cash

Rest assured, if homebuyers or Realtors think they may have a good idea for a low down payment purchase loan program, they needn’t bother thinking since Fannie Mae has decided to make that executive decision on their behalf.  As of October 20th, the new choice will be between a fixed rate mortgage, fixed rate mortgage or fixed rate mortgage.  What’s best for the homeowner has now been mandated by Fannie Mae. The maximum Loan to Value for ARM’s (Adjustable Rate Mortgages) is being dropped from 97% to 90% for all purchases and no cash out refinances (seriously, this is not …

The Breaking Mortgage Industry

This excerpt from the Twin Cities Real Estate Radio Show covers the pressures that are bringing the mortgage industry to its knees. Charles Dailey – Branch Manager, Loan Officer, Certified Military Housing Specialist – CA DOC, MN DOC & WI DFI The Home Buyers Scouting Report® is provided directly to the buyer by HBM II, a licensed national real estate brokerage service company, not to or through a lender. The FREE home finding service is provided directly to prospective homebuyers by HBM II and its real estate brokers, as part of their ordinary real estate brokerage services. HBM II, Inc. …

The Return of the Subprime Mortgage

Fear, regulatory uncertainty, market instability and a lack of consumer confidence has kept the reemergence of these products at bay.  Make no mistake though; the money for these products is there.  Reemerging market stability has helped to abate the fears of some mortgage investors on the secondary market.  Consumer confidence has not recovered but it is up.  The big issue has been regulatory clarity.  Two significant events are unfolding that are likely to bring that to an end. The first is the move by the FDIC to provide the new definition of subprime mortgages.  The first thing they did was rename subprime loans as …

Refinancing When You’re Upside Down

This episode of the Twin Cities Real Estate Radio Show covers different mortgage options for borrowers who are upside down on their homes. Charles Dailey – Branch Manager, Loan Officer, Certified Military Housing Specialist – CA DOC, MN DOC & WI DFI The Home Buyers Scouting Report® is provided directly to the buyer by HBM II, a licensed national real estate brokerage service company, not to or through a lender. The FREE home finding service is provided directly to prospective homebuyers by HBM II and its real estate brokers, as part of their ordinary real estate brokerage services. HBM II, …

General Information on FHA VA and Conventional Mortgages

This podcast of the Twin Cities Real Estate Radio Show covers general pro and con information on different loan types such as conventional, FHA and VA. Charles Dailey – Branch Manager, Loan Officer, Certified Military Housing Specialist – CA DOC, MN DOC & WI DFI The Home Buyers Scouting Report® is provided directly to the buyer by HBM II, a licensed national real estate brokerage service company, not to or through a lender. The FREE home finding service is provided directly to prospective homebuyers by HBM II and its real estate brokers, as part of their ordinary real estate brokerage …

The Home Buyers Scouting Report® Mobile App is Here!

The Home Buyers Scouting Report® is now mobile. From the browser on your mobile phone, if you type in www.homescouting.com, you’ll see that your scouting report is now mobile friendly. From an iPhone, Android or Blackberry you should bookmark the page and add a bookmark icon to one of your home screens. You can also get the apps from the Apple Store or Google Play: For tutorials on the mobile Home Scouting app, click here. If you need mortgage calculators on the go, pull up http://calculators.charlesdailey.com/ in your mobile browser and bookmark it .  Should you want rate quotes on …

How to Get Your Offer Accepted in Multiple Offer Situtuations

This radio show explains the difficulties of getting your offer accepted in multiple offer or competitive situations and how to overcome them. < Charles Dailey – Branch Manager, Loan Officer, Certified Military Housing Specialist – CA DOC, MN DOC & WI DFI The Home Buyers Scouting Report® is provided directly to the buyer by HBM II, a licensed national real estate brokerage service company, not to or through a lender. The FREE home finding service is provided directly to prospective homebuyers by HBM II and its real estate brokers, as part of their ordinary real estate brokerage services. HBM II, ...

The Cost of Waiting to Buy a Home in fall of 2013 vs. Now

With all of the recent strength in the Twin Cities housing market and Minnesota’s relatively low unemployment rate one might be confused about why we’re experiencing all-time lows (ours are even lower) in mortgage rates since typically the beginning of a recovery is followed by higher interest rates. But the truth is that the Minnesota story is not the national or global story. Events on the national and international stage have caused the Federal Reserve and global bond markets to drive US mortgage rates down. This too will end and will carry a cost to those contemplating a mortgage. First, …

Reverse Mortgage – FHA’s Home Equity Conversion Mortgage (HECM)

A FHA HECM reverse mortgage loan is a very special type of loan that permits borrowers to convert some of the equity in their home to cash.  Reverse  mortgages can give senior homeowners the funds they  need to lead a more secure and enjoyable retirement,  repair their homes, or potentially pay for long-term care  and other necessary expenses, while allowing them to  continue to live in their own homes for as long as they want. Borrower Requirements You must: ●      Be 62 years of age or older ●      Own the property outright or have a relatively small mortgage balance ●      …

Short Sales Gaining on REO – Mortgage News Daily

This article,  Short Sales Gaining on REO Sales as “Change is Afoot”, by BY JANN SWANSON does the best job of any article I’ve seen like it of defining and documenting an emerging trend.  Realtors and buyers would do well to adjust their searching, shopping and negotiating habits to conform to Jann’s observations. “A change is afoot when it comes to short sales,” RealtyTrac said on Thursday, releasing new data which indicate, based on January’s numbers, that pre-foreclosure sales (most of which are so-called short sales) in the first quarter were the highest since the first quarter of 2009. In theory, the company said, a short …

Buying a Home After a Short Sale using a VA Mortgage

I have had a lot of people ask me about how to buy a home after a short sale using FHA financing but it’s becoming more and more common that people are considering buying a home after a short sale using financing insured by the Veteran’s Administration.  These guidelines use to be murky but the issues concerning waiting periods after a short sale and underwriting guidelines are coalescing around an interesting blend FHA guidelines and Fannie Mae guidelines. There are six unique stipulations and they are as follows: The borrower must have made all mortgage and installment payments within the …

Say Goodbye to the Lowest Minnesota Mortgage Rates in History

The market is at a turning point for the worse due to growing worries about inflation. While it is not a problem right now (although the consumer price index did just rise the most in 10 months), there are several strong economic factors emerging that typically lead to higher prices to the consumer and thus higher mortgage interest rates down the road. While the Federal Reserve said they wouldn’t raise rates until 2014, Mark Zandi, chief economist at Moody’s Analytics and many more economists don’t believe that they’ll be able to stick to that promise. A stronger dollar, improving jobs …

How to Choose and Calculate Your Private Mortgage Insurance (PMI)

Saving an eighth of a percent on interest rate can save a little on your monthly payment and shopping around on closing costs can save a little on your down payment but perhaps the most overlooked and costly mistake when buying a home is not choosing the right mortgage insurance if the down payment is less than 20%.  The wrong decision on this choice can cost thousands of dollars. Let’s take a generic purchase of 200,000 dollars with the minimum down payment and compare them but before that, here are some definitions that you’ll need: Borrower Paid Monthly Mortgage Insurance …

Why Some Refinancing Borrowers Leave Money on the Table: The Issue of Reissue Rates

Re-Blogged with permission via: http://www.mtgprofessor.com/A%20-%20Title%20Insurance/Reissue%20Rates.html posted February 25, 2012 Ten years ago, Kenneth Harney wrote an excellent series of articles on why many refinancing borrowers pay too much for title insurance. In one article, published June 9, 2002 in the Baltimore Sun, Harney stated: “No one knows how much American homeowners lose annually by overpaying title premiums when they refinance their mortgages. Even title insurance industry officials admit the problem is substantial. They say some consumers could save 50 percent or more at refinancing if they’d simply memorize two words: “Reissue rate.” Use them as a mantra at your next refinance.”  Not much seems to …