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minnesota

Down Payment Assistance Programs in MN

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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

Foreclosures at 5 year low

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Foreclosures at 5 year Low in 2013, but Some States Still Increasing

Foreclosure Minneapolis, MNMinneapolis, MN:  Is it finally over?  With foreclosure filings throughout 2013 reported by RealtyTrac to be at the lowest annual level since 2007, one might begin to hope the housing crisis has ended.  However the company also reports that overall foreclosure activity increased last year in 10 states and scheduled foreclosure auctions in judicial process states were the highest in three years.

READ THE FULL STORY

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No down payment VA home loans

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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).

How many homes should we look at before buying?

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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.

Senator introduces bill to expand HARP Refinance program

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HARP refinance in MNSenate bill S.1375, the “Rebuilding American Homeownership Act” has been introduced by Senator Jeff Merkley, D-OR to try and expand the existing HARP (Home Affordable Refinance Program”.

This has been called by many as “HARP 3“, and is designed to allow loans not currently owned by Fannie Mae of Freddie Mac to be refinanced through the HARP program.

Under the current HARP underwater refinance program, in order to qualify, your existing mortgage loan must be owned by Fannie Mae or Freddie Mac.

If passed, the bill would force Fannie Mae and Freddie Mac to refinance non-Fannie Mae or Freddie Mac loans, and to price in the additional risk into the interest rate so that the program would not cost taxpayers anything.

DO I QUALIFY FOR HARP?

Merley was quoted as saying the “It shouldn’t matter which financial institution owns a loan…” and that “all responsible homeowners should have the option to refinance and save money.”

Merkley also introduced another bill that would encourage people to refinance into loans terms of less than 20-years, which builds equity faster, by paying $1,000 of underwater homeowners closing costs.

Previous attempts at a HARP 3 program, or modifying the current HARP 2 program have not gain much traction in Washington, and these two new bills have no other sponsors.

Getting a mortgage loan after paying cash for a home

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In today’s market, it is pretty common to pay cash for a home in the Twin Cities area. Maybe because you needed to act fast and didn’t have time to get a loan, or maybe because of the condition on the home, the house wouldn’t qualify for traditional financing.

Regardless of the reason, I speak with a lot of customer who pay cash for a home, then want to take a standard mortgage loan out against it right away. You may be able to take cash out, but there are rules to understand.

Cash out refinanceCash back after buying with cash rules

While each lender may be slightly different, here is the common Freddie Mac rules for getting cash back.

Primary Residence and Second Homes Only:

If you’ve owned the home MORE than 6 months.  Normal cash out refinance rules apply.

If you’ve owned the home LESS than 6 months,  then ALL of the following requirements must be met to get the loan:

  • The executed HUD-1 Settlement Statement from the purchase transaction must evidence that no financing secured by the subject property was used to purchase the subject property.
  • The Borrower must be reflected as the owner of the subject property on the preliminary title report and there must be no liens on the subject property.
  • Source of funds used to purchase the subject property must be fully documented.
  • If funds were borrowed to purchase subject property, those funds must be repaid and reflected on the HUD-1 Settlement Statement for the refinance transaction.
  • The amount of the cashout refinance Mortgage must not exceed the sum of the original purchase price and related Closing Costs, Financing Costs and Prepaids/Escrows as documented by the HUD-1 Settlement Statement for the purchase transaction.
  • There must have been no affiliation or relationship between the buyer and seller of the purchase transaction.
  • The cashout refinance Mortgage must comply with the applicable Loan-to-Value ratio limits and all other Freddie Mac requirements

Homebuyer jump into market as rates rise

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Mortgage rates have risen about 1% since May 2013, and that is clearly making potential home buyers jump into purchase contracts more sooner than later according to a recent Fannie Mae housing survey.
Real Estate, Minnesota, Minneapolis, for sale, mortgage rates, interest rates
Get Pre-Approved Today – Click HERE

The survey shows 57% of people expect mortgage rates to rise in the next 12 months, with just 7% responding that rates will remain stable. The previous survey indicated only 46% of people expected mortgage rates to rise.

Potential home buyer clearly see the writing on the wall, and anyone even close to purchasing a home realize interest rates, while up from previous lows, are still historically good.  Given the fact home prices are rising and rates are rising, homebuyers have decided that now is time to get off the fence and get serious about buying real estate.
Americans’ outlook on the economy deteriorated slightly, though many were more optimistic about their personal situation. The share of people who expect their own personal financial situation to improve over the next year jumped to 46%, its highest level in three years, while  16% said they expect their situation to worsen, unchanged for the third consecutive month.

HARP Refinance still going strong in MN and WI

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The Federal Housing Finance Agency (FHFA) special underwater refinance program, commonly known as HARP (Home Affordable Refinance Program) is still going strong.

HARP refinance in MNWhile mortgage rates have risen a bit, there are still millions of people who could take advantage of the program to save significant money on their monthly mortgage payments.  Because of this, the FHFA had Fannie Mae and Freddie Mac extend the HARP program by two years to December 31, 2015. The program was originally set to expire December 31, 2013.
More than 2.2 million homeowners have already refinanced through HARP since HARP was introduced by FHFA and the U.S. Department of the Treasury in April 2009.  HARP is uniquely designed to allow borrowers who owe more than their home is worth the opportunity to refinance their mortgage.Extending the program will continue to provide borrowers opportunities to refinance, give clear guidance to lenders and reduce risk for Fannie Mae, Freddie Mac and taxpayers.
In addition, FHFA will soon launch a nationwide campaign to inform homeowners about HARP. This campaign will educate consumers about HARP and its eligibility requirements and motivate them to explore their options and utilize HARP before the program ends.

To be eligible for a HARP refinance homeowners must meet the following criteria:

  • The loan must be owned or guaranteed by Fannie Mae or Freddie Mac.
  • The mortgage must have been sold to Fannie Mae or Freddie Mac on or before May 31, 2009.
  • The current loan-to-value (LTV) ratio must be greater than 80 percent.
  • The borrower must be current on their mortgage payments with no late payments in the last six months and no more than one
  • late payment in the last 12 months.

Check here to see if your loan is owned by Fannie Mae or Freddie Mac

Stop worring about inquiries on your credit report

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Inquiries on your credit report

Plan on getting a home loan soon? Worried about qualifying for a mortgage? Need to get pre-approved to buy a home in Minnesota or Wisconsin? Think your credit score will go down?

For 99% of the people, 99% of the time, you don’t need to sweat a lender pulling your credit report!

Mortgage Rate Perspective

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balance_ratesMinneapolis, MN:  With rates having moved up slightly recently, it is good to keep current mortgage rates in perspective.

Here is a mini historic look at conventional 30-yr fixed loan rates

  • In the early 1960’s = 5.25%
  • In June 1971, about 7.53%
  • In June 1981, about 16.70%
  • In June 1990, about 10.16%
  • In June 1998, about 6.99%
  • In June 2000, about 8.29%
  • In June 2005, about 5.58%
  • In June 2009, about 5.52%
  • In June 2010, about 4.75%
  • Last month (May 2013) about 3.54%
  • Today… about 3.91%

I bought my first house in 1981.  I paid 16% for my FHA 30-year fixed!  That same loan today is 3.50%

Insurance for a townhomes or condo condo. Do you need it?

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Do you need renters insurance for your town home or condo?

Home Car Boat Insurance MN St Paul Minneapolis
Insurance Company for HO-6 policy in MN

WHAT IT IS

When you own a condo or town home, your monthly association dues provides you basically with “walls out” coverage. If the home is damaged or destroyed, the associations insurance policy will rebuild the property.  Anything inside, or “walls in” is NOT covered.

HO6 POLICY

The walls in policy for town homes or condo’s is officially known as an HO6 policy, but think of it as being similar to a renters policy, as is covers everything inside. The main areas covered in a policy are:
Personal property coverage covers your belongings so that you can replace your items in the event of a loss, such as fire, theft, vandalism, etc. Your association’s policy covers the structure of the building, but it does not extend to cover your own property.

Loss of use coverage covers additional living expenses if you have to move out temporarily while your unit is being repaired. This coverage covers the additional costs you would incur by moving to temporary housing, renting a hotel room, or commuting a longer distance to work while your home was being repaired.

Personal liability coverage covers damage the policyholder or his dependents cause to a third party.

WHY YOU SHOULD HAVE IT
Many people don’t think they have much, but the cost to replace everything you own adds up quickly. On average, for around $15 per month, you can get an HO6 insurance policy so that your property can be replaced. Plus, most insurance carriers will offer you a package discount for having both car and and homeowners insurance, so the protection becomes even more affordable.

See how little great protections costs by calling our friends at Reliable Insurance Network at 651-675-4911

Buying a HUD foreclosure with FHA financing

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Minneapolis, MN:  The Minnesota and Wisconsin housing market for homes under $250,000 is hot…   Good homes priced well are selling very quickly, and usually above the original asking price.

I’ve run into this situation many time recently when buying a HUD home, so I thought I would address it here.

DOES MY BUYER HAVE TO USE HUD’S FHA APPRAISAL?

hh_fsThe quick answer is YES if using an FHA loan to buy the house.  NO if using any other financing.

If you are buying a HUD foreclosure, they almost always already have a HUD Appraisal.  This is good and bad.  On the good side, if the buyer is using an FHA loan, the buyer does not need to pay for one of their own.  They get to use the HUD appraisal.

If the buyer is using any other type of financing, the existing HUD appraisal is meaningless.  You will need a new one.

OVER ASKING PRICE?

But if the house goes into multiple offers, the buyers using FHA financing are hamstrung by the HUD Appraisal. Sure, they can offer more than the HUD appraisal, but any amount they offer above the asking appraisal amount will be additional cash out of their pocket above the standard FHA down payment of 3.5%.

For example, a HUD Home is on the market for $100,000 with an existing HUD appraisal at $100,000.  There are multiple offers.  You want the house.  You offer $105,000. Therefore your down payment is $8,675 (3.5% of $105,000 PLUS the $5,000 above the appraisal price).

 

20% down NOT needed to buy a home in Minnesota

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Minnesota Down Payment mortgage loansSt Paul, MN:   Question.  How much money do you think you need to put down to buy a home?

If you answered anything higher than ZERO, your answer is wrong!

Would it surprise you to learn that most people can get a mortgage with a great rate with just 3.5% down, and in some cases, zero down?  For most people, it is about the same amount of money you would spend on the first month, last month, and damage deposit on a rental property… but now, it is your home.

For some strange reason, the myth you need a huge down payment persists.  It simply isn’t true, yet I hear it all the time. I think it is because we hear it on TV.  I know I have. This is mostly from the talking heads on either coast. Many of those areas are what is known as “high cost” locations.  Anytime you go over $417,000 – you are now a jumbo loan, and jumbo loans are typically 20% down.  But for the rest of us…  Heck no, just 3.5% down!

  • FHA Loans are very popular, and only require 3.5% down
  • Good credit conventional loans only require 5% down
  • VA loans are zero down
  • USDA rural housing loans, for rural parts of the country, are zero down
  • Community programs can many times be used for your down payment to effectively get you zero down

Don’t let misinformation derail your dream of home ownership. Contact a local licensed mortgage professional to get pre-approved today.  Once approved, contact a great Real Estate Agent to find your dream home!

 

Low down payment mortgage loans on the rise

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hammer_bankMore mortgage lenders are offering conventional loans with down payments well below the 20% or higher levels of recent years.

In another sign of the housing market’s brightening outlook, more home buyers are discovering conventional loans with down payments well below the 20% or higher levels of recent years.

Until recently, many borrowers had to go through a government guaranteed loan program, such as the Federal Housing Administration (FHA Loans) or the Department of Veterans Affairs (VA Loans), to get a mortgage with less than a 10% down payment.

READ THE FULL STORY ON USA TODAY

Mortgage Rates for week ending March 16th, 2013

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Minneapolis, MN: Freddie Mac yesterday the results of its Primary Mortgage Market Survey(R) (PMMS®), showing average fixed mortgage rates rising this week on stronger signs of jobs growth and consumer spending. ir-2The 30-year fixed averaged 3.63 percent, its highest reading since the week of August 23, 2012. The 30-year fixed hit its average all-time record low of 3.31 percent the week of November 21, 2012.

News Facts

  • 30-year fixed-rate mortgage rates averaged 3.63 percent with an average 0.8 point for the week ending March 14, 2013, up from last week when it averaged 3.52 percent. Last year at this time, the 30-year FRM averaged 3.92 percent.
  • 15-year fixed rate mortgages this week averaged 2.79 percent with an average 0.8 point, up from last week when it averaged 2.76 percent. A year ago at this time, the 15-year FRM averaged 3.16 percent.
  • 5-year adjustable rate mortgages (ARM) averaged 2.61 percent this week with an average 0.6 point, down from last week when it averaged 2.63 percent. A year ago, the 5-year ARM averaged 2.83 percent.

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

“Fixed mortgage rates rose this week on stronger signs of jobs growth and consumer spending. The economy added 236,000 new workers in February which helped push down the unemployment rate to 7.7 percent. This helped offset the effects of the payroll tax holiday expiration and led to a 1.1 percent increase in retail sales, which was well above the market consensus forecast.”

Freddie Mac was established by Congress in 1970 to provide liquidity, stability and affordability to the nation’s residential mortgage markets. Freddie Mac supports communities across the nation by providing mortgage capital to lenders. Today Freddie Mac is making home possible for one in four homebuyers and is one of the largest sources of financing for multifamily housing.

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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.