Real Estate Information

The city of Minnetonka is offering a down payment and closing cost assistance program to first time home buyers. How do you qualify? By the following:  1) Must be a 1^st Time Home Buyer or have not owned a home in the past 3 years 2) Debt to Income below 50% 3) Must contribute 25% of own money to down payment 4) Must attend a Home Buyer Workshop 5)Income Limits 

To find out more information about the Minnetonka Assistance Program please email us at clientcare@preferredhometeam.com

WCCO 830 Real Estate Radio Hour would like to invite you to join Garth Johnson of Minnesota REO Experts and your Host Chris Rooney with The Realty House at 6pm on May 10^th at the Edina Community Library for a seminar on Steps to Buying Foreclosure Properties RSVP online www.realestateradiohour.com  or call our hotline 612-750-3246.  That is this Tuesday at 6pm please RSVP today for space is limited.

Fannie Mae could stop purchasing mortgages intended to buy properties during the redemption period. The poor writing, inapplicable content and potential procedures of the Fannie Mae selling guideline is the reason for this change. This could negatively impact the real estate market and prevent sellers from dealing with a short sale. Please click the link below to read the full article. http://nash-law.squarespace.com/fannie-mae-selling-guide-1-27/?SS_CSAT=QAWFSLAABOGZGCTZ

Do you have a qualified trusted advisor team?

Who do you trust to give you advice?  This is one of my favorite questions to ask my clients.  It really is amazing at some of the answers I hear.  They range from my husband or wife, my friends, my management team to the internet or media.

These are all good sources but is the information they give you tailored to your goals and objectives.  Is this advice emotional or a reaction to short term issues?  Is this advice given from an outside prospective?

As a general statement there is one major differentiator between companies or individuals that are successful and ones that are not; the successful ones have put together a ‘team’ of advisors they rely upon to make decisions. 

Let’s think about this for a minute. 

Our mind is programmed to think we can do everything ourselves.  We don’t need advice or help from others.  I fall victim to this thought process from time to time.  It takes discipline and humility to ask for help.  Our mind fights asking for help from others but experience tells us that asking typically yields better outcomes than going it alone.

Having a team of advisors that clearly understand your goals and objectives can provide the following:

1. Vast range of professional and personal experiences
2. Different expertise / knowledge basis
3. Provide emotionally intelligent advice
4. Provide clarity from outside the forest we live in

Take time to evaluate who is on your team?  Are they bringing value to you?  Are they on your team because they are friends or are they on your team because they are the best at what they do?  (Friends can be a great resource and a part of your team but make sure they are on your team for the right reasons.)

Build that team and make sure you meet with them on a regular basis to assure everyone clearly understands your goals and objectives.  It may be the best investment you make!

Check out our team at www.RealEstateRadioHour.com

Get your pre-qualification for your loan, even if you're just browsing. You might think, you're not really ready to buy but let's go shopping any way. Don't make this crucial mistake. Know what you qualify for, this helps you understand how much home you can afford and then browse in that market range.

Since the mortgage crisis, getting loans and buying a home has gotten more complex and can take even longer than before to qualify. This shouldn't discourage you but rather encourage you to get everything in order to make sure you can purchase a home.

Act now. Timing the market and waiting to see if you can get the absolute rock bottom interest rate, can cause you to lose the home you love. Of course, we all want to save money and get the best deal but understanding that when you find a home you really like, trying to wait to see if the rates/price will drop, could cost you the deal. Certainly negotiating is always part of real estate, but just keep in mind that if you're not careful you could time yourself out of the home you really want.

Stay on top of your home sale. If you're in a situation like many buyers are where the purchase of their new home is depending on the sale of their current home, then you must stay on top of your home sale. Contingency sales are sometimes easier to negotiate in a buyer's market.

Keep in mind that the house-hunting process for your new home, is, of course, only part of the deal. That means that keeping up your own home while it's on the market is vital. Sometimes buyers get so busy shopping for their next home that they end up leaving their current listed home a mess. This could turn off a potential buyer; it happens all the time. So do the juggle --keep an eye on how appealing your home is to a buyer while shopping for your new home as a buyer.  

Announcing 3.625% rate for Minnesota Mortgage Program

As of 1:00 p.m. on Tuesday, October 12, Minnesota Housing lowered all first-time homebuyer program interest rates, with the lowest rates currently under the Minnesota Mortgage Program (MMP) at 3.625% for government loans and 4.000% for conventional loans (conventional rate includes all pricing adjustments).  

In addition, for clients who are ready to buy and interested in 100% LTV financing, consider using the  Affordable Advantage product, now at 4.375%. 

Please note, these rates are subject to change at any time, and this is not an offer to enter into an interest rate agreement. Such an agreement may only be made pursuant to Minnesota Statutes Section 47.206, Subds. 3 and 4.

For more information please contact us at info@preferredhometeam.com

Tips to Improve Your Score

Your credit score is a number that helps lenders predict how likely you are to make your payments on time. This score affects your ability to obtain credit and helps determine what you pay for credit cards, auto loans, and mortgages on Minneapolis St Paul homes. Even your insurance rate is related to your score. The higher your score, often referred to as a FICO score, the more apt you are to be approved for and pay a lower interest rate on new loans. Scores ranging from 650 and below are considered bad and indicate to the lender that you are a very high risk. Chances are you will be unable to secure a loan, or if you are, it will be at a much higher interest rate and/or require a cosigner.

What If there Are Errors

What to do if you have a low score and do not qualify for a mortgage on a Minneapolis St Paul home? Your first action should be to check your credit report for errors. If you find erroneous information, you need to act immediately by contacting both the credit bureau (the three major ones are Equifax, Experian, and Transunion) and the organization that provided that information.

• The credit bureau/agency: Send a certified, return receipt requested letter to the bureau pointing out each inaccuracy and enclose copies of documents which support your claim as well as the report itself (with the misinformation highlighted). Factually explain why you dispute each item and request a deletion or correction for each one.

• The creditor or information provider: Send the same type of letter and enclose the same documents. Request that the provider notify you of action taken (generally within 90 days) so that you can verify the amended information.

If there are no errors on your report, then you should take immediate steps to improve your credit. Ways to do this include the following:

1. Stop using your credit cards. Do not continue to accumulate debt.

2. Get current on delinquent accounts. Since payment history makes up 35% of your score, this action will have a great impact on your score.

3. Keep accounts with balances open, but don’t apply for more credit.

4. Call your creditors. Explain your financial situation and ask about possible hardship programs which will temporarily reduce your monthly payments.

5. Begin paying off your existing debts, even if you have to sell some belongings to do so. Come up with a get-out-of-debt plan and stick to it.

6. Get professional help. There are resources available to help you reestablish a good credit rating. Contact the National Foundation for Credit Counseling for assistance.

7. Be patient. Realize that improving your credit score takes time and that there is no quick-fix --and keep in mind your goal of owning a Minneapolis St Paul home.

The home improvement trend appears to have gained momentum in recent months, be it in simple upgrades or major remodeling. Owners of Minneapolis St Paul real estate are rapidly joining the ranks of do-it-yourselfers, hirers of handymen and specialists, or clients of architects and general contractors. Which of these categories best describes you depends on your time, ability, and motivation; the complexity of the job; approval/certification required by local authorities; financial considerations; and the availability of reputable help.

After you have identified the improvement desired and the level of expertise required to do the job, your next step is to find the appropriate worker. If that person is you, there are many sources to assist you. Businesses such as Home Depot, Lowes, and carpet/tile retailers often give free “how to” clinics in the evenings or on weekends and have helpful handouts to guide you. There are also innumerable web sites for the novice to advanced do-it-yourselfer which provide, articles, diagrams, videos, advice from professionals, and step=by=step instructions for a myriad of fix=ups or upgrades ranging from hooking up an icemaker tore facing kitchen cabinets to laying floors and constructing a patio. Some helpful sites are DYInetwork.com, DYIAdvice.com, HomeandGardenAdvice.com, and HomeImprovements-and-Financing.com.

You may have determined that you want the services of a professional, but do you want a handyman or a specialist? The latter, the more expensive of the two, has a depth of experience in his/her field but is limited to work in that field. A handyman, while not as experienced, offers a breadth of skills--he/she can hang your ceiling fan as well as paint your ceiling. Check out websites which help in locating dependable handymen and reputable specialists. www.AngiesList.com will not only assist you in finding the right match for your needs, it will also warn you about individuals/companies who have garnered complaints from customers. You may also want to check out franchise businesses such as www.MrHandyman.com--more expensive but more likely to be insured and bonded.

Your reason for upgrading your Minneapolis St Paul real estate may be to increase your quality of life or reflect a changing lifestyle (addition of a home office or a screened- in patio), decrease utility bills by becoming more energy efficient (installation of upscale siding or quality windows), or adding value to your property (kitchen island, renovated bathroom). Whatever the purpose, be sure to take advantage of the internet and local businesses--and do enjoy the fruits of your labor.

Get the current value of your Minneapolis St Paul real estate.

To sell or not to sell? That is a question with which many seniors are wrestling these days. One the one hand, older homeowners are faced with rising maintenance costs, personal physical constraints, a desire to live a more carefree and less complicated lifestyle, a realistic look at future needs, such as being near public transportation and/or quality health care, and living in a “too-large” home. On the other hand, they are reluctant to leave a neighborhood where they are known and respected, move further from friends and family, consider downsizing and parting with treasured items, and undertaking the seemingly overwhelming job of emptying one home and setting up another. In addition, they don’t want to give up the security or the memories tied to their current home.

A knowledgeable and understanding real estate agent who is familiar with the needs and desires of the 55+ set, combined with the services of an attorney who specializes in both real estate and estate planning and an accountant who deals with senior tax implications, can be invaluable to you in looking at all aspects of selling your Minneapolis St Paul real estate and helping you determine what is best for you. Senior Expert Margie Behr also advises that you think about taking out a home equity loan before you put your house on the market and that you involve your whole family in the decision-making process.

If you do decide to sell, BankRate.com cautions you to first get a written market analysis and a financial evaluation which will help you and your team of advisors address the realities of the market, your investments, and tax objectives.

Once underway in the selling process, you‘ll have to prepare your Minneapolis St Paul real estate for showing to potential buyers. That includes removing, storing, or giving away some large furnishing, heirlooms, or collections, and making your home as “clutter-free“ as possible. If this task looms too large for you to deal with by yourself, your real estate agent can provide you with qualified, responsible people who will make the burden much lighter. Remember that a well-maintained property with plenty of open space makes the house seem larger and shows off its assets.

The exterior, too, needs attention so that its “curb appeal“ will make shoppers want to come inside and investigate further. Keep lawns mowed, bushes trimmed, and flower beds fresh and colorful. Walkways, siding/brick, and roofs should be in good condition and entranceways must be attractive and inviting.

What and where to buy? Bankrate.com stresses the importance of looking at all your options and comparing them to your physical needs-now and in the future. Carefully consider the benefits to a one-level home or a building with an elevator. Would a condo with no maintenance required be best for you? Have you thought about a retirement community? You’ll need to determine the value of being close to friends, doctors, churches, stores, public transportation, and facilities which foster leisure pursuits. Do you golf? Want to be involved in a recreational senior center? Will you want trails or bike paths nearby? Be sure to visit areas you are seriously considering--often and at different times of the day. Talk with current residents, drop in the stores, walk around the community with family members or a friend. You can also do some reconnaissance online at [our website] which give you very useful demographic information re: income, population, employment, crime rate, etc., or you can Google a specific neighborhood.

Two final precautions:

1) don’t commit to a vacate date on the Minneapolis St Paul real estate you’re selling until you have secured a new residence. You don’t want to have to move twice!

2) if family is really important to you, don’t move too far from them. Many grandparents have regretted their move so much that they have moved back to be closer to the children!

As you go through the process of relocating to/from your Minneapolis St Paul real estate, view it as an adventure, a chance to view the world from a different setting, meet new people, and make new friends--and enjoy the journey!

To a Minneapolis St Paul home loan shopper, there may seem to be an endless--and confusing--array of mortgage types. Of course you want to choose the option that is best suited to your current and future financial situation, but understanding the terminology, types, and monetary ramifications is not always easy. Mortgages generally fall into four categories (fixed rate, adjustable rate, step, and balloon) according to the interest rate and duration of the loan.

Basic terminology;

• Fixed rate--The interest rates do not change during the life of the loan, thus allowing you to know the amount of your payments.

• Adjustable rate (ARM)--the interest rate is tied to certain indexes plus a margin and can fluctuate up or down, thus affecting each payment,

• Step--the interest rate and monthly payment remain the same for a specified period of time. After that the interest will change to the prevailing rate and will remain there for the duration of the loan.

Balloon--a loan payment that expands after a certain amount of time. Basically it functions similarly to a fixed rate mortgage in the earlier months/years with a delayed steep increase at the end,

The following information, courtesy of Mortgages.Interest.com, outlines the type of mortgage, the loan characteristics, and the situations most appropriate for each one. If, for instance, you plan to live in your Minneapolis St Paul home more than 10 years and desire stability in payment amounts, then a fixed rate mortgage is for you. If, however, your finances are currently strained, but you know that in 5 to 10 years your monetary situation will improve or that you will most likely move within 10 years, then an ARM or balloon mortgage may be better for you. Being familiar with these options allows you to discuss them intelligently with your real estate agent and/or lender and then select the type which best fits your circumstances.

Fixed rate mortgage (30, 20, 15, 10 years)*

*Interest rate & monthly payment remain the same for the entire term of the loan
*plan to live in property more than 10 years
*like total payment stability

0/1 year adjustable rate mortgage1

*Interest rate & monthly payment remain the same for 10 years
*Starting the 11th year, interest rate adjusted every year, so payment is subject to change every year for remainder of loan
*plan to live in property more than 10 years
*like initial payment stability, can accept later changes OR
*plan to move within 10 years
 *want loan to remain in force in case plans change

7/23 (2-Step) or '30 due in 7' mortgage

Interest rate & monthly payment remain the same for 7 years
*Conversion option: On the 8th year, interest rate adjusted to reflect prevailing interest rates, resulting payment will remain the same for remainder of loan
*plan to live in property more than 10 years
*can tolerate one payment adjustment OR
*plan to move within 7 years
*want to remain in force in case plans change

7/1 year adjustable rate mortgage

*Interest rate & monthly payment remain the same for 7 years
*Starting the 8th year, interest rate adjusted every year, so payment is subject to change every year for remainder of the loan
*plan to live in property more than 7 years
*like initial payment stability, can accept later changes OR
*plan to move within 7 years
*want loan to remain in force in case plans change

7 year balloon mortgage

*Interest rate & monthly payment remain the same for 7 years
*At the end of 7 years, loan is due in full. Borrower must refinance into new loan at prevailing interest rates
*plan to live in property more than 7 years
*are willing to refinance at prevailing market rates OR
*plan to move within 7 years
*like payment stability

In addition, there are variations of the ARM, step, and balloon mortgages which differ primarily in the duration of the loan and of the planned residency.

Another good source of information for first-time Minneapolis St Paul home buyers is the Department of Housing and Urban Development (HUD), an agency which oversees FHA loans. This type of loan is particularly useful if you have little money for a down payment, less than great credit, or large monthly bills. An FHA loan requires as little as 3% down (and it can be a gift from a relative or friend). In terms of your credit rating, the FHA is primarily concerned that for the past two years you have paid bills in a timely manner and have been steadily employed. With FHA you have to wait only two years after declaring bankruptcy, and your debit-to-credit ratio can be higher than for a conventional loan. You can qualify for an FHA loan if your monthly payments are no more than 43% of your income, and, as with conventional loans, you can choose from many types.

Of course, there are some negatives to consider before taking on an FHA loan. Interest rates generally run about 1/8 of a percentage point higher than conventional rates, but the real disadvantage of an FHA loan is that the borrower must pay an up-front insurance premium of 1.75% of the mortgage if the down payment is less than 20%. This cost can, however, be added to your total loan amount.

So there you have it--an easy-to-understand guide to mortgage types. As always, you should feel free to contact me anytime with questions. I am glad to recommend a number of outstanding mortgage lenders if you are interested in talking with one.

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