Tips to getting a better mortgage loan

Minneapolis, MN:  Tips to getting a better mortgage loan are all over the internet, and everyone seems to have an opinion. When buying a home, almost everyone is going to need to get a mortgage loan. So knowing the tips of where you get that loan can effect service, programs, rate, cost, and more.  Here are a few tips I suggest understanding:

So where to get a mortgage?

Banks, brokers, credit unions, and mortgage companies all offer loans in MN.  Most offer the exact same loan programs, but not everyone offers everything.  For example, it is fairly common for small banks and credit unions not to offer FHA loans or VA loans.

keyTips when getting a mortgage loanHistorically many people start with what I call their place of comfort. That is almost always whatever institution has their checking account. There really isn’t anything special here, but many people call it “their bank”, and wrongly believe because you have an account there already, you’ll get a better deal.  Sorry, but that simply isn’t true.

Since the age of the internet, a web search for a mortgage company is another popular starting point.  You’ll find a wide range of banks, brokers, credit unions, and local mortgage companies. There is nothing wrong with searching the internet for a mortgage company, except you need to understand that some out-state lender or the big internet companies names you see on TV CAN NOT offer you anything better than the local lender down the street.

Finally, about half of all people when buying a home simply use the mortgage lender the Real Estate Agents suggests.  This is where I believe so many  home buyers make a fatal, and expensive error.

Beware of Realtor In House or Preferred Lenders

When your Real Estate Agent suggest a lender, there are two types.

In House or Preferred Lender: Generally these companies are either owned by the real estate company, or have some kind of official partnership.  Many times they have similar names.  XYZ Real Estate sending you to XYZ Mortgage, but not always.

The Real Estate Agents work very hard to drive you to the in-house financing for a simple reason. They make money doing so.  No matter what they say about convenience or anything else, it is all about making more money for their company.  As you can imagine in this situation, you are generally NOT going to get the best deals in the market. Furthermore, just because they are the Real Estate Companies preferred lender, doesn’t make them good.

Outside Referral Partner: Generally speaking, these referrals companies do not have any sort of official relationship with the Real Estate company the agent works for.  The Realtor is referring you to this Loan Officer simply because they have proven to have the knowledge, expertise, and the programs the clients need and want. The Loan Officer has proven themselves to be a great referral partner. The Real Estate Agent and the Real Estate Agents Company are making nothing extra when you select this lender. The agent and their company has no financial gain. Their only interest is based in you getting the best possible deal for you (not their company) and having someone they trust on your side.

Another tip? The worst referral partners… Builders… But I’ll save that for another article.

Choosing a Loan Officer

The first big thing to understand is about the Loan Officer you choose.  You want your largest financial transaction handled by an experienced professional.  So look for someone with well documented industry experience. I suggest at least 10-years at a minimum.

Next, realize that Loan Officers at depository lenders (banks and credit unions), and mortgage companies owned by a bank or credit union, are NOT required to have a license, are NOT required to have any schooling, and DO NOT need to pass any state or federal testing.

Loan Officers at non-depository lenders (brokers and direct mortgage companies) ARE REQUIRED to have schooling, continuing education each year, and pass stringent state and federal testing requirements.

I’m not saying any one individual Loan Officer is better or worse, but face it.  I would prefer a licensed person versus an unlicensed person.   So how do you know if your Loan Officer is licensed? You don’t unless you ask or check through the national loan officer database.  All Loan Officers must have a tracking number known as an NMLS number. Don’t be fooled, an NMLS number is NOT a license number.

Giving the two choice of referral partners, and knowing what you’ve just read… Which one would you choose?


Down Payment Assistance Programs in MN


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!


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.


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)


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

Refinancing after a bankrupcy

Q: Do you have to reaffirm your mortgage with a bankruptcy to refinance the mortgage loan today?

Minneapolis, MN:  I hear this question on a fairly regular basis, and the plain and simple answer is NO.

You DO NOT need to reaffirm a mortgage loan that was in a bankruptcy to refinance that loan today. Anyone telling you otherwise is 1000% wrong.

refinance mortgage bankruptcy affirmation reaffirmationIf you did not reaffirm your mortgage during your bankruptcy, the mortgage did not disappear. It is still a lien on your house.  It is still owed and must be paid unless you are willing to risk losing the property.  The mortgage company — the servicer — virtually always wants you to make these payments.  And they often don’t care about the reaffirmation and will not waste their time (and your money) asking for it during the bankruptcy case.

If you pay, you get to stay

If you don’t pay, you will be foreclosed on and have to vacate the house.  The bankruptcy will protect you from ever having to pay any loses ON THAT LOAN.  But if you sign and take out a new loan, it is a new debt, a new loan, and the previous bankruptcy protection from the old loan is gone.

The problem new lenders have is because of the bankruptcy, the current lender is no longer reporting your payment history to the credit bureau.  A new lender is required to get a current payment history, and that can sometimes be very difficult.

The Loan Officer is Wrong!

With that said, some lender want you to reaffirm.  Sort of stupid, but that is up to them…  Not every lender feels the same way. Plenty of Loan Officer are also simply wrong in saying you need to reaffirm the loan first. If you are talking to someone telling you you need to reaffirm to refinance, call a different lender.
If you in this situation for a property in Minnesota or Wisconsin, we can help you.  Just apply online or call (651) 552-3681


2013 Home Value Gains Best in 8-yrs

2013 Home Value Growth Best in 8-years

First Time Home Buyer programs MinneapolisA little real estate history lesson… In most areas, home prices peaked around 2006, started crashing in 2007, bottomed out in 2009,  held steady through 2011, and have grown since 2012.  The recently finished year of 2013 saw annual home value gains the highest since 2005, according to a newly released report.

CoreLogic’s Home Price Index indicated sales were up 11% year over year in December. This also meant it was the 22nd consecutive month of year over year price gains nationally.

Rising home prices should allow more people to sell their home without being underwater, which should allow a lot of pent up supply, and continue to increase home values for even more recovery in 2014.  After a wild ride, it appears we are finally on a well defined housing recovery.

Home prices are expected to continue their year-over-year climb in January, with a projected 10.2% increase from January 2013.

If you’ve been thinking of selling your home.

Now would be a great time to connect with a local real estate agent to see what you home might sell for.

If you are thinking of buying a home

Now would be a great time to buy before home prices rise any further, and while mortgage interest rates are still historically low.