Think you know your credit score? You are wrong!

Minneapolis / St Paul, MN:  These days, everyone seems to know their “credit score”.  Many people subscribe to one or all  3 credit services, or get a score from a place like CreditKarma.com.

Before you get too excited about that credit score, understand that the score numbers you just received most likely was based on the “Advantage Score” model. While that IS a credit score, that is NOT the same scoring model mortgage companies use.

Mortgage Credit Score
Mortgage Credit Score

Another way to look at is is think about buying a car. You tell someone you bought a new Ford. Great, but what model Ford? Did you get a Ford Focus, or was in a new Ford Truck?

Getting your credit score somewhere?? They are generally all FICO scores, but what scoring model is it based on?? Advantage score, Beacon Score?   Typically the Advantage Score is noticeably higher than your mortgage score.

If the credit score you are looking at is from a mortgage company, then that should be accurate if any other mortgage company pulls your credit…  Or at least until something changes, and credit scores can potentially change everyday.  I’ll save that for another article…

Ultimately, the ONLY credit score that matters is the credit score your Loan Officer obtains on the day you start your mortgage application.


Down Payment Assistance Programs in MN

DOWN PAYMENT ASSISTANCE PROGRAMS

MHFA Start Up and Step Up down payment assistance programs in MN for First Time Home Buyers

Have $1,000?  Have OK Credit?  Than YOU can be a homeowner.

down payment assistance programs mnThe biggest hurdle for many first time home buyers is the lack of down payment money.  With the down payment assistance programs from the Minnesota Housing Finance Agency – you can buy a new home today, and be enjoying it next month!

TWO MINNESOTA DOWN PAYMENT ASSISTANCE PROGRAMS

START UP Program

The Start Up assistance program is for people who have NOT owned a home in the last three years.

STEP UP Program

The Step Up program is for people who currently do, or may have owned a home previously.  Both of these program assist with up to $10,000 is down payment assistance to those who qualify.  Most people get much less. Typically up to just $5,000.

MORTGAGE CREDIT CERTIFICATES

By adding a Mortgage Credit Certificate option, first time home buyers can potentially save up to an addition $2,000 on their taxes.

Click or call to learn more about the benefits of mortgage credit certificates in MN (MCC)

 WHO QUALIFIES FOR DOWN PAYMENT ASSISTANCE?

As with any assistance program, there are additional rules and guidelines that need to be followed.  Here is a basic list of requirements:

  • Credit score above 640 (middle score of all applicants)
  • Attend Home Buyer Education Class or take the online class
  • Meet family Income Limits
  • Buy an affordable home
  • Provide previous three years tax returns
  • Meet FHA, VA, USDA, or Fannie Mae / Freddie Mac underlying loan guidelines

The rules and guidelines for first time home buyer and down payment assistance programs in MN are a bit overwhelming for most potential new home owners.  We suggest you don’t try to figure it out yourself…  Rather, simply call us at (651) 552-3681, or fill out a full online application. Our licensed professional Loan Officers will review the application, zero in on the best loan for you, then contact you to discuss your options, all with NO COST and NO obligations whatsoever.

Click here For FULL RULES and GUIDELINES on the Minnesota Housing Finance Agency Down Payment Assistance Programs


No down payment VA home loans

Take Advantage of your VA Benefits! VA Home Loans for Minnesota and Wisconsin military veterans

VA loans MNWhy get a VA Loan?    

It’s simple … Lower Rates. Lower Payments. $0 Down Payment.

Thousands of people are using their VA Loan benefit every single month. Let us help you purchase a MN or WI home with ZERO DOWN, or lower your existing VA home loan with a refinance to today’s low interest rates.

BUYING A HOME WITH A VA HOME LOANS

Purchase with Zero Down

A VA Loan s

till allows a Vet buy a home with Zero DOWN and finance 100% of the home’s purchase price. Now more than ever, banks are requiring larger down payments for conventional loans with more expensive mortgage insurance. In many cases they require 10-20% down, putting home ownership out of reach for many prospective buyers.

How much will $0 down save you? FHA loans require 3.5% down. Conventional loans will require a minimum of 5% down, and in many cases as much as 10% and 20%.

 VA Loans Minnesota

 

VA loans have NO PMI = Lower Monthly Payments

ZERO DOWN VA Home LoansA VA Loan offers a HUGE savings benefit. They do NOT require monthly PMI, or private mortgage insurance. PMI is an added monthly expense required for conventional loans and FHA loans where the borrower finances more than 80% of the home’s value.

Interest rates are also typically lower with a VA Loan, than a conventional loan. A lower rate combined with monthly PMI savings can substantially lower your monthly payment.

Getting Qualified is Easier

The qualification guidelines are less stringent for VA Loans. Because the loan is backed by the government, lenders don’t need to meet strict lending rules.

VA Purchase loans for Veterans – APPLY

VA Loans require no down payment, and have no mortgage insurance, plus you can roll all your closing costs into the loan. This makes for one heck of a great first-time home buyer deal for military veterans wanting to buy a home! The country appreciates your service. This is one way we pay you back. Today mortgage rates on VA loans are very low, making homes even more affordable.

VA Home Mortgage Loan Advantages vs Other Mortgage Loan Options

  • VA home loans do not require a down payment, unless the purchase price is more than the appraised value or in excess of current loan limits.

  • VA home loans have limitations on which closing costs may be assessed to the veteran.

  • VA home loans have no prepaid without penalty.

  •  Maximum (zero down) VA loan has increased to match conforming loans!

  • VA home loans may have forbearance extended to worthy VA homeowners experiencing temporary financial difficulty

  • VA performs personal loan servicing and offers financial counseling to help veterans avoid losing their homes during temporary financial difficulties

  • VA interest rates are competitive with conventional loan interest rates.

  • VA home loans do not require mortgage insurance – this is a HUGE savings.

  • Although there is no down payment required – There are still closing costs, but the seller usually pays ALL of the veteran’s closing costs (and with a $0 down payment, the veteran can literally purchase a home for nothing).


Refinancing activity down 55% – Rates still awesome

Mortgages Rates in Minneapolis, MNAccording to recent surveys from the Mortgage Bankers Association, refinance applications are down 55% from recent highs. The latest survey shows the smallest amount of refinance activity in years, yet refinances still account for 63 percent of all mortgage applications.

Clearly the uptick in interest rates from the lows we say back in May 2013 are having an effect on activity. As mortgage rates move higher, refinancing makes less sense for more and more people.  Current best execution on 30-year fixed mortgage rates is running +/- 4.50%, which is about 1% higher than the recent lows.

From a historical perspective, interest rates are still fantastic, and surveys show there are still millions of people who could benefit be refinancing to today’s current interest rates.

HARP Refinance MNThere is also a huge mental aspect to refinancing. When people “hear” rates have gone up, many don’t even both to check with their local mortgage professional to run numbers.   But interest rates are only one aspect of refinancing.  Getting a short term, like a 15-year mortgage, can easily save many people well in excess of $100,000 or more.  That is nothing to ignore.   For others, refinancing back to a new 30-year fixed mortgage could save them hundreds of dollars a month.

Finally, many people still are under the belief that that can not refinance because of underwriting rules, or because their home has lost value.  But programs like HARP 2, the Home Affordable refinance Program for underwater home are working well for millions of people.

My advice is to never assume.  Call your local licensed mortgage professional for a quick review.  You may be surprised at what you hear!

 


How many homes should we look at before buying?

You are fully pre-approved with your mortgage lender, and out looking at new homes.

How many homes should we look at before buying?

Minneapolis, MN Real Estate - Mortgage BrokerReal Estate Agents and lenders get this question all the time. The answer? It depends.

Realistically, most people only physically need to look at between 5 – 7 homes before deciding on which one to make an offer on. Some look at 1 or 2 homes before making and offer, and some look at 20 plus homes. The trick is to work with your Real Estate Agent and Loan Officer to have realistic expectations of your wants, needs, goals, and affordability.

The first step is to get pre-approved with a local Minneapolis area mortgage broker.

This way you’ve already discussed mortgage loan programs, down payment and loan requirements, and have set a realistic home purchase price. How can you even start looking at homes if you don’t know this information?

Meet with the Real Estate Agent

With mortgage knowledge in hand, now you can meet with a local Realtor to go over your housing needs, Bedrooms, neighborhoods, yards, features, priorities, and more. Your agent will discuss all of these items, and figure out a realistic plan. Usually they will then set up some automated listings to be sent to you by Email that meets your criteria. When you find some that you like, now it is time to physically go look at homes.

Because you’ve already discuss financing, and set good expectations with your Realtor, you can usually achieve the dream of home ownership without looking at dozens of homes. It’s all about educating them up front and getting on the same page.

First Time Home Buyers

Many first time home buyers in the Minneapolis, MN area look at a little high average, more like 7 – 10 homes before buying. This is OK, as they sometimes need to discover features and options on homes that they may have not been as familiar with as a move up buying looking at their second or third home.

The Bottom Line is that there is no set number

Each person is different. But if you’ve physically looked at more than 10 homes, it is probably time to sit down with your mortgage and real estate professional to re-examine your housing wants, needs, goals, and affordability.before they find the right home.


Rates Tick Up – Buyers Want to Lock Low Rates

Minneapolis, MN: Mortgage interest rates have been near historic lows for a long time. Home buyers have fallen into a feeling that low mortgage rates are normal.  That attitude changed a bit recently as mortgage rates jumped up to the highest level in over a year.
lmrInterest rates on baseline  30-year fixed mortgage  surged 12 basis points to average 3.9% in the week ended May 24, the highest level since May 2012. The upward trend went even slightly higher this week, with most lenders reporting best execution rates at 4.00%
The slight up-tick in rates has caused many potential buyers to jump off the fence, and act now before interest rates go any higher.

So why are rates moving higher?  It is complicated, as there are many factors, but the simplest explanation is that the economy is slowly getting better.

Another big reason is that the FED has been propping up mortgages by being the primary buyer of mortgage backed securities. Without them buying these securities, the entire mortgage system would collapse. While they have, and continue to say they will buy the securities for the immediate future, there are signs that this policy may be changing, with a pull back of the buying because of the improving economy

Simply put, rates may be slowly starting to return to where the market should be if supporting itself, and not being propped up by the Fed.


Rates jump up after jobs report

lmrMinneapolis, MN:  Mortgage rates jumped up  at their fastest pace in two months after this weeks employment report, which showed that more jobs than anticipated were created in April.  Anytime we see good economic news, it tends to cause long-term mortgage interest rates to move higher.

Not only were April’s numbers good, the report also revised March’s numbers higher – which combined, added to the increase in mortgage interest rates.

While this all sounds like doom and gloom for anyone looking to buy a new home, or refinance their existing mortgage to save money – it just means that for a perfect customer, a 30-year fixed rate is back up to about 3.50%…  Hardly terrible news!

While we never know what mortgage interest rates will do, today’s rates are awesome.  There is very little room for downward improvement, and lots of room to move up.  I suggest locking in these great low rates, and never look back.


Weekly Mortgage Rate Report for April 27, 2013

ir-2Mortgage Rates Hit 2013 Lows, Big Week Ahead

Market Summary
Minneapolis, MN:   Mortgage rates finally made a break from a narrow range that’s persisted since April 15th.  They’d edged up to the top of that range by Thursday, but then made their first authoritative move lower to end the week at the best levels of 2013.

READ THE FULL REPORT

 


Average Home Buyer Numbers

fico_graphMinneapolis, MN:  According to a recent information from EllieMae, the average mortgage customer today has the following status:

  • Average credit score: 743
  • Average down payment: 19%
  • Average housing debt ratio: 25% of income
  • Average overall debt ratio: 35% of income
  • Average score of a denied client: 702

Where do you fit?

Do NOT let this fool you.  I was rather shocked to read this information. That doesn’t sound like my average customer!

Best advice? Contact a local licensed mortgage professional.  Provide them with a full application, and let them determine if you qualify for a mortgage loan with your credit score, your income, and your down payment size.


Average home price in St Paul Minneapolis up 18.9%

St Paul, MN: The median price of a home in the Twin Cities rose 18.9 percent in the past year and stood at $192,557 in March, according to a study by an online real estate website.

The study, released Thursday, April 25, reflects a well-documented shortage of homes for sale in the Twin Cities, which has contributed to an increase in prices.

READ THE FULL STORY

 


Can’t refinance – Maybe you can with HARP – Find out here

HARP 3.0 ???  Help for underwater home owners

St Paul, MN:  Virtually, all homeowners have lost value on their homes in recent years.  For many, this has created some challenges to refinancing and taking advantage of today’s super low mortgage interest rates.

There are a few programs with can help, depending on what type of mortgage loan you have today.  May people have successfully used program like HARP (Home Affordable Refinance Program), the FHA Streamline Refinance, or even the VA Streamline refinance known as an IRRRL loan.

Sadly, not everyone fits the criteria.  Therefore Washington has been floating the idea of an expanded HARP 3 Refinance ProgramIt doesn’t exist yet, and may never exist…  But if it does, here is what it may look like:

There are some basic criteria for the #MyRefi or HARP 3 refinance program:

  • Current loan is NOT backed by FHA, USDA, Fannie Mae, Freddie Mac
  • Primary home only. No second homes or investment home
  • Loan less than $750,000.
  • On time mortgage payments for the past 6 months, with no more than one 30-day late payment in the past year.
  • Credit score above 580

This new HARP 3 refinance program proposal mirrors the current HARP 2.0 refinance loan program (possible no appraisal, less document, etc), except it would potentially also allow any underwater home owner, not just those who have a loan owned by Fannie Mae or Freddie Mac.

Try out the governments “Would I qualify for a refinance” below..


What clients and Real Estate Agents Don’t Understand about Appraiser Independence

What clients and Real Estate Agents Don’t Understand About Appraiser Independence

Minneapolis, MN:  Real Estate Agents constantly call our mortgage office to ask if an Appraisal was ordered, or if it is completed yet.

appThe first question is pretty silly…  Of course it was.  The second question is tougher to answer until the completed appraisal physically shows up on the lenders desk.

Recent lender rules require what is known as “Appraiser Independence”.  This is a double down on the old rules that no one is allowed to influence or pressure the appraiser to obtain any pre-determined value on the home. The rules also means that no one who will be compensated on the file can have anything to do with picking the appraiser.  It has to be totally blind and randomly assigned.  This is very different from years past where the client or the Loan Officer could pick any appraiser they wanted.

Once the appraisal has been ordered, there are varying degrees of what the Loan Officer may or may not know about the status of the appraisal.  Most mortgage companies use a middle company, known as an AMC, or Appraisal Management Company, to handle all aspects of the appraisal. This easily means the lender will meet the “independence” guidelines. Some AMC’s are better than others in letting the lender know the status, giving them the expected date the appraiser will visit the property, and the expected appraisal completion date. With many others, the lender is completely in the blind. In the vast majority of cases, I don’t even know who the appraiser is until the appraisal is completed.

To further complicate the issue, while it is technically possible for a Loan Officer to speak to an appraiser on a very limited number of questions, the vast majority of lenders completely forbid this contact to avoid even the remote likelihood of influence complicity.  It is much easier to respond to regulators that “our loan officers are forbidden”, then to claim they didn’t do anything wrong.

As a mortgage lender, it is very frustrating when real estate agents constantly bombard me with appraisal question.  If I know, I will tell you.  Do not yell at the Loan Officer if they don’t know the answer or say they can not talk to the appraiser.


Why Mortgage Pre-Approval is Important

Successful house hunting starts with mortgage pre-approval – Not talking to a Real Estate Agent.

What Is Mortgage Pre-Approval

Minneapolis, MN:  Mortgage pre-approval is what happens when you talk to a Loan Officer and find out how much house you can afford. It’s an important step because it helps your real estate agent zero in like a laser beam on the correct house price for you. Your mortgage consultant will ask questions about your financial situation, including job, income, assets, debts, and more. Then you’ll talk to them about your comfort level when it comes to a monthly mortgage payment. It’s important to know this, in order to avoid buying a home you really can’t afford.

 

FHA Mortgage Loan Expert in MN and WI
FHA Mortgage Loan Expert in MN and WI

At this point, you are NOT pre-approved.  The next step to full pre-approval is submitting all your documents to the lender. Common items include; photo ID, pay stubs, W2’s, and bank statements. Once the mortgage company reviews these documents, THEN you will be pre-approved!

Here’s a look at some of the benefits to getting pre-approved before you house hunt:

  • Powerful Buyer. Sellers often give preferential treatment to pre-approved buyers since they know for sure that you can finance the purchase. If you get into a bidding war with another buyer, the seller might look at your offer in a better light than someone who hasn’t talked to a mortgage consultant.
  • Interest Rates. As interest rates go up and down, you can get in on a locked rate before they go up again. You can lock in an interest rate if you are pre-approved, as soon as you have a signed purchase contract. A lower interest rate will save a lot of money over the life of that mortgage.
  • Credit Surprises. Mortgage pre-approval reduces credit surprises.  If you wait until the last minute to secure financing and find that you have a few issues that need to be resolved with your credit, you could miss an opportunity to purchase your dream home.  Getting pre-approved will help you head-off surprises so you can go look for the perfect home.

Mortgage pre-approval is as close as anyone can get to insuring you’ll be able to obtain a mortgage loan in advance of finding a home.  Pre-approval gives MN and WI first time home buyers a definite idea of what they can afford and shows sellers that they are dealing with a serious buyer.


Mortgage rates bounce near records lows for week ending 12/14/2012

Mortgage Rates Mixed, 30-Year Fixed Averages 3.37 Percent

ST Paul, MN:  Freddie Mac today released the results of its Primary Mortgage Market Survey® (PMMS®), showing fixed mortgage rates mixed following data reports on inflation and the housing construction market. The 30-year fixed moved up averaging 3.37 percent, while the 15-year fixed eased to 2.65 percent, both remaining near their record lows.

News Facts

  • 30-year fixed-rate mortgages (FRM) averaged 3.37 percent with an average 0.7 point for the week ending December 20, 2012, up from last week when it averaged 3.32 percent. Last year at this time, the 30-year FRM averaged 3.91 percent.
  • 15-year fixed rate mortgages this week averaged 2.65 percent with an average 0.7 point, down from last week when it averaged 2.66 percent. A year ago at this time, the 15-year FRM averaged 3.21 percent.
  • 5-year adjustable (ARM) mortgages averaged 2.71 percent this week with an average 0.7 point, up from last week when it averaged 2.70 percent. A year ago, the 5-year ARM averaged 2.85 percent.

Quotes
Attributed to Frank Nothaft, vice president and chief economist, Freddie Mac.

“Mortgage rates were mixed this week following data reports on stable inflation and a thriving home construction market. The 12-month growth in the core consumer price index has remained between 1.9 and 2.1 percent for the past five consecutive months ending in November. Meanwhile, housing starts averaged the strongest three months in November since September 2008, and homebuilder confidence rose in December to its highest reading since April 2008.”

Freddie Mac’s survey is the average of loans bought from lenders * last week, including discount points. Applicants must pay all closing costs at these rates. No cost loan rates higher.

Follow this link to view today’s best MN and WI mortgage interest rates.

 


The FHA 203k Rehab Loan in MN / Fix a Fixer-Upper

Found your dream home – But it needs a little repair? The FHA 203k rehab loan to the rescue!

Minneapolis, MN: The FHA  203(k) loan program offers borrowers the resources to buy that great fixed-upper home opportunity. One single loan is used to pay for the purchase (or refinance) and the cost of renovating the home.

There is no doubt that the current real estate market offers a lot of great bargains on bank owned, Foreclosed, REO, Repo’d, etc homes. However,  many of these homes are in poor condition. Missing appliances, ruined carpet & flooring, holes in the wall, etc.  Most lenders don’t offer loan programs that will be able to help folks buy homes in this condition.

This is where a little known program called the FHA 203K Rehab loan comes in. The FHA 203K Rehab loan is becoming very necessary for the purchase of many Bank Owned, REO, or Repo properties.

FHA 203K streamlines loans make the process of buying a home that needs a little TLC (or quite a bit in some cases!) easier, more affordable, and quicker. Many of us have seen firsthand, or have heard stories about foreclosed home that have been torn up, stripped, vandalized, etc. With conventional financing, these homes are very difficult to sell or buy, as they are not in move in condition, and most lenders will not lend on a damaged home.

 

Is a 203(k) Loan Right for You?

  • Buy a “Fixer-upper” or REO property needing renovation
  • Get funds to both purchase and upgrade your dream home
  • Refinance and renovate your existing home

Advantages of 203(k)

  • Loan amount based on the home value including renovations
  • Only one loan needed to both purchase and improve
  • Refinance and rehab your own home

Can be used to buy property otherwise not eligible for financing

Who Qualifies?

  • A minimum down payment of 3.5%
  • A credit score of 640 or higher
  • You currently have no other FHA loans
  • You DO NOT have to be a first-time buyer
  • Home will appraiser for the purchase price PLUS repair costs
  • Loan amount meets FHA Loan limits, which vary by county (Check FHA  limits in your area)

 Download a Streamline 203K Presentation

 Download a Free Home Buyer Handbook


Has your Minneapolis area home LOST VALUE? HARP 2.0 can help you refinance!

Has your Minneapolis area home LOST VALUE? HARP 2.0 can help you refinance!

Minneapolis, MN:  What is HARP? HARP stands for Home Affordable Refinance Program, an initiative from the Federal Housing Finance Agency (FHFA) to assist homeowners whose homes are now worth less than what they owe.  And just recently, new enhancements to the program were announced, making refinancing options available again to an estimated one million more homeowners.

If you are a responsible homeowner but the current marketplace loan-to-value (LTV) requirements and need for a new appraisal have made it difficult or impossible for you to refinance at today’s record low interest rates, lenders may be able to help you without needing a new appraisal or meeting previous LTV requirements.

The HARP “Special Refinance Program,” is designed to help up to 9 million American families refinance their loans to a payment that is affordable now and into the future. This program is aimed at helping responsible homeowners “refinance” their loans to take advantage of historically low interest rates. Here are some common Questions and Answers about the Refinancing Initiative in the program.

You may be eligible for a HARP 2.0 refinance if:

  1. The mortgage must be owned or guaranteed by Freddie Mac or Fannie Mae.
  2. The mortgage must have been sold to Fannie Mae or Freddie Mac on or before May 31, 2009.
  3. The mortgage cannot have been refinanced under HARP previously unless it is a Fannie Mae loan that was refinanced under HARP from March-May, 2009.
  4. The current loan-to-value (LTV) ratio must be greater than 80%.
  5. The borrower must be current on the mortgage at the time of the refinance, with no late payment in the past six months and no more than one late payment in the past 12 months.

If you answered YES to these questions, Click HERE to Apply for a HARP Refinance in the Minneapolis, MN area.