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 …

You’re A First Time Homebuyer? So What!

I know, my headline may be a little offensive to some, but I had to get your attention. This is going to be well worth your 4 minutes to learn a few things about first time homebuyers and first time homebuyer programs. I’m sure you have heard of Toys R Us and Babies R Us, right? Ever heard of Entitlements R Us? Nope.  It doesn’t exist.  And I’m going to break the notion that just because you are a first time homebuyer, that you are entitled to those programs or any down payment assistance. (besides, entitlements are only for the government). …

Homebuyers: Thinking About A Lowball Offer? Think Again.

 If you are under the impression that the Minnesota real estate market is still a buyer’s market, it may be time to put away the bell bottom hip huggers and burn the flower power polyester pullover.  Okay, that may be dating back a bit too far but you get my point.  Let’s time warp to 2013. Long gone are the days of putting in a lowball offer and hope it sticks.  It won’t and it doesn’t anymore.  I know, I know…your friends, family and colleagues who purchased homes just a few years ago still boast that they got their home …

Before You Shop for a Condo, Pre-Qualify Your Lender First

If you’re a FHA buyer shopping for a condo, you’d better pre-qualify your lender first. If you’re listing a condo and a buyer gives you a FHA pre-approval letter, you’d better pre-approve that lender first. Because Spot Approvals are a thing of the past, it’s important to know which of the two remaining FHA condo approval processes your lender will be using: Direct Endorsement Lender Review and Approval Process (DELRAP) or HUD Review and Approval Process (HRAP) as outlined in MORTGAGEE LETTER 2009-46 B. DELRAP is only available to lenders who have unconditional Direct Endorsement authority and staff with knowledge and …

Do’s and Dont’s 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 …

What are Compensating Factors When Qualifying for a Mortgage?

Although we wouldn’t know it from watching the six o’clock news, mortgage underwriting guidelines and mortgage insurance underwriting guidelines have been in a pattern of loosening, not tightening.  This trend started in late 2009 and continues today with such examples as lower minimum credit scores for mortgage underwriting guidelines and fewer declining markets for mortgage insurance guidelines.  As this has happened, another trend has emerged.  The phrase “underwriting exception” is coming back in practical contexts rather than a nostalgic reference to days gone by.  These days, underwriting exceptions are more and more common where a mortgage loan file has “Compensating …

FHA Premium Rate Increase Makes PMI a Better Option for Many Borrowers

The Federal Housing Administration (FHA) implemented a 25 bps increase to its annual premium rates on April 18, resulting in a payment increase for FHA borrowers. With this change, RMIC (an iLoan preferred mortgage insurer) offers equal or lower monthly premium rates on all LTVs with no upfront premium. RMIC Monthy PMI vs. FHA MIP · Lower Total MI Premiums 30-Year Fixed · Purchase1 Unit Primary Residence Loan Amount £ $417,000 > 95% LTV · 35% Coverage 95% LTV · 30% Coverage FICO 720+ FICO 700+ RMIC FHA RMIC FHA Upfront — 1.00% — 1.00% Year 1 1.15% 1.15% 0.94% …

Mortgages for Saint Paul, Minnesota Community Land Trusts (CLT) Housing

Community land trusts are created to preserve long-term affordable housing by purchasing homes in their communities, then leasing the land using a long-term ground lease to low-income and moderate-income families at affordable monthly ground rents. Community Land Trusts (CLT) have had a foothold in the Twin Cities for decades. More broadly, the leasehold form of home ownership is more common in Minnesota than many would think. It is a market that Realtors would do well to be skilled in. More especially, it is a market that is crying out for more readily available, quality financing through Fannie Mae. For the …

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 …

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 …