Buying a Home on a Lease with Option to Purchase – Rent to Own

Since the housing crash and great recession, there have been swelling ranks of people that have had credit damaged but have increased their savings and reduced their consumer debt. Many of these people, in a reasonable time frame will qualify for conventional, VA, FHA, or Rural Development loans but at this time, do not. For those who have their finances situated, saved money and increased their capacity to cover their housing payments, a Lease with Option to Purchase is a great choice. A Lease with Option to Purchase is really two contracts that, by referencing each other in their respective …

If You Are Not Doing a 90 Day Burn Now, When Are You Going to Start?

If you are not doing a 90 day burn now, when are you going to start? Ok, we can all stand around the water cooler and compare our successes and frustrations with our current real estate market, and sometimes that is a great way to get and share ideas.  However, if you are finding yourself mostly getting negative feedback these days around that water cooler, you have a choice to make.  Will I survive 2011, or am I going to be one of the many real estate agents that will retire from this career??? So, just not getting the contacts …

Nothing About Industry, A Lot About EVERYTHING

Recently, my daughter had to write a short essay from a list of topics for her English class.  I wanted to share.  There is a whole lot of wisdom in this teenager’s thoughts……….. One of the things that confuse me most in life is why people accept average or less than average.  People live in a world of mediocrity, settling for something less than what life could offer them.  People don’t excel.  Many people don’t even try.  We live in a society of people who believe “I can’t”.  This country exposes us to a world of opportunity.  The sky is …

HOME BUYERS: GET A REALTOR, PLEEEEZ! A Loan Officer Rant

The MN Mortgage Mom is on a rant. I’m a little crazy right now. ATTENTION BUYERS! Long gone are the days of easy real estate, no doc financing and everything in between. Let me direct your attention to “today’s world”: Short sales, foreclosures, banks and asset managers…are you really equipped to deal with these realities? Declining values, appraised values, overpriced, underpriced…what kind of tools do you have in your back pocket to ensure you are getting the BEST value and deal available to you? Seller paids, seller concessions, seller carry backs….bet you can’t even define these potential opportunities! Negotiations, multiple …

10 Home Renovations That Don’t Necessarily Add Value

Some people assume that all renovations done to the home will add value.   As a matter of fact most people spend thousands of dollars on expensive upgrades and renovations over a period of time. What these people forget is that the next owner may not like the renovations.  Everybody needs to remember that your home is only worth that of homes of comparable size are appraised at, not necessarily by the characteristics of your home.  Yes, some qualities are highly sought after like garages, finished basements, enclosed yards or large kitchens but you need that certain buyer to appreciate them. …

What is a HO-6 Policy?

An HO-6 policy is insurance covering the interior of a condominium.  In most cases, the association’s master policy does not cover the interior and only applies to common areas.  By “interior” we mean: carpet, cabinets, drywall, fixtures, and doors, upgrades, personal liability, and personal property. For this reason alone, an HO-6 can be well worth the low cost of $15-$30 per month.  But for many home buyers, an HO-6 policy is a precondition for underwriting approval.   Under the new lending rules, an HO-6 insurance policy must provide coverage for no less than 20% of the condominium unit’s appraised value.   A …

Two Thirds of Minnesotans Will be Affected by Flooding in 2011 – Act Now!

If homeowners don’t act in ways not common in the past, many will stand to lose a fortune due to flooding in Minnesota in 2011.  It’s likely that sandbagging won’t do it this time and we need to start thinking about flood insurance and in some cases act quickly on flood insurance.  According to expert guests on a Minnesota Public Radio show two days ago, two thirds of Minnesotans will be affected directly or indirectly by flooding this year.  If someone thinks their house won’t be affected, they can at least count on traffic being a mess. Just try and …

Do’s and Don’ts with Credit During the Home Buying Process

When buying your next home, changes to your credit (additional accounts, closing accounts, fluctuating credit card balances) can result in the lowering of your credit score. If your credit score changes, that can affect your interest rate and even the loan approval itself. Therefore, it is imperative that there are no major changes to your credit and information provided, during this process. In order for your loan to reach final approval and fund, you’ll want to adhere to the following: DO NOT charge any new items on your charge cards (higher balances will lower credit scores). DO NOT apply for …

Minnesota Home Prices Headed for a Double Dip? – Don’t Believe the Hype

If you’ve been watching the evening news or reading what’s been coming off the press, you might be thinking that the sky is about to fall on Minnesota home prices. You’ll hear a lot of doom and gloom and a lot about the S&P/Case-Shiller Home Price Indices. I assure you that the media will not do an adequate job of explaining what this does and more importantly does not mean to you as a Minnesotan. Since the great recession hit, metropolitan areas have increased in home values 3 percent from their lows. There were 5 major metropolitan areas that bucked …

Does Your Loan Officer Wear Lime Green Polka Dotted Underwear?

Okay, perhaps that’s a little TOO much information!  Perhaps you really don’t need to know what splash of color your loan officer is bestowing on his or her bloomers on any given day. But what you SHOULD know is who your loan officer IS. Let’s see….scum bucket, slime ball, scammer, fraud frog…any of these ring a bell?  They do to a whole lot of people, as our industry has been historically speckled with less than scrupulous loan officers committing fraud and scamming the innocent.  Unfortunately, those LO endearments have, in many cases, been very well founded.  (And how embarrassing that …

Wanna Be a Good Mortgage Applicant? . . Then it’s Time to Get Naked!

Qualifying for a Mortgage, we went from one extreme to the next!  3 years ago, if you had a social security number, stated your income and ordered an appraisal (with practically a stated value), you were good to go. Today, when The Mortgage Lady meets with a potential client, one of the opening statements is “we are going to be required to document your documents” and, ask them to not be insulted when the investor has conditions that are beyond what they would expect. We live in a country where our justice says, we are innocent until proven guilty, everyone …

So You Want Constantly Updated Lists of Foreclosed Properties?

You’re smart enough to get pre-approved early and you know you need to know the market well in advance of buying your home.  You want to get a good deal and to that end, you want to buy a foreclosed home but where can you get the best and most current lists of foreclosures?  There’s a solution for you. You’ll need a lot of tools to begin this process on your own but when it comes to searching for real estate online, I invite you to check out the Home Buyers Scouting Report® (HBSR) from Home Buyers Marketing II, Inc. …

So You Want to Search Homes Without a Realtor Contract?

You’re smart enough to get pre-approved early and you know you need to know the market well in advance of buying your home.  But perhaps, you don’t want to waste a Realtors time when you’re not ready to commit to using them just yet.  Don’t get me wrong, you’d be a fool not to buy a home with a Realtor but if you need to get started and aren’t sure who to commit to using, there’s a solution for you. You’ll need a lot of tools to begin this process on your own but when it comes to searching for …

Who Is Going To Write These Loans?

The mortgage industry has seen much blood shed in the last 2 years, particularly in the last year.  After reading a very interesting magazine article, I began to think about the future…the eminent future and a big question arose, “Who the heck is going to write these loans”?  What is the MN Mortgage Mom rambling about now?  Well, let me take a step back a few years first. In the early to mid-2000’s, loan officers were a dime a dozen.  We were in offices, working out of our garages and in the comforts of our living rooms.  We were dressed in …

Fannie Mae Guideline Changes – Gifts, 97% Financing and Mortgage Insurance

There has been some recent excitement about Fannie Mae (FNMA) changing her guidelines on down payments and allowing gift funds as an acceptable form of down payment in lieu of a borrower’s own funds. Before we all get excited about FNMA getting a little FHA in her with respect to gift funds, we need to realize that the guidelines for mortgage insurance and FNMA are not aligned. So long as they aren’t, this change will only have minimal effect. This chart outlines the new accepted forms of down payment from FNMA’s perspective: Here’s the Fannie definition of acceptable donors for …

C’Mon Minnesota Legislature, . . Just Ban Deficiency Judgments

In some regards, the MN legislature was ahead of the curve on the mortgage and housing crisis. They regulated non-bank lenders and brokers in ways that other states hadn’t even considered. They got ahead of abusive practices towards distressed homeowners and shady loan modification companies. What they have unequivocally failed at is aiding homeowners who are upside down on their homes. Their greatest impact could be with those contemplating a short sale. Other states have already taken steps. Perhaps the best example would be those taken in California. For some time now, CA has not allowed deficiency judgments in the …

What Does SB931 Mean to Your Seller? . . . It Means That They’re a FHA Buyer!

California has taken, barring the stupidest veto ever, a clever step towards opening doors for homeownership. A primary intention of this bill no doubt was to flush the market of negative equity and aid struggling homeowners. It has an added benefit of streamlining continued homeownership for those who will do a short sale after January 1, 2011 by making a difficult FHA loan approval that much easier to get done. Buying a home after a short sale has been possible through FHA for some time now. While many investors are willing to purchase and securitize these loans, few have been …

Bank LO’s vs SAFE Brokers and Lenders… oh my!

Alright, alright, alright…  MOST everyone in Mortgage and Real Estae has heard about the S.A.F.E Act right?  The Secure And Fair Enforcement for Mortgage Licensing Act was passed into law a while back but in last stages of being implemented RIGHT NOW.  There’s a bit of a rush going on right now as its supposed to be completely implemented by January. All originators from coast to coast need to get on the list and registered.  Some LO’s (Loan Originators) will need much more.  There’s 2 distinct groups of LO’s and I’ll try to provide direct clear hyperlinks… (mostly for the LO’s who don’t need education and …

Waiting Periods on Bankruptcy, Foreclosure and Short Sales for Mortgages

Since late 2007 and the MORTGAGE MELTDOWN started we’ve had many “inquiries” from prospective MN & WI buyers who’ve wanted to get into a new home or BACKinto home ownership.  The last couple years have been hard on many people even though the Federal Government says that the recession is behind us.  People have had their incomes cut back, lost jobs, bankruptcies, foreclosures and short sales. What I wanted to share with you is a current (as of today) crib sheet of how long certain negative things need to be “seasoned” before different types of mortgage financing can be offered. Let’s …