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minnesota

First time home buyer tip

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Minneapolis, MN:  As we start to enter the spring home buying season here in Minnesota, I have one big tip for first time home buyers.

welcome2_FTHB_1Buying now makes sense. If you have OK credit, a little bit of money for down payment, and you’ve been successfully renting for a year or two, you are ready to buy now. With the combination of affordable housing prices and low mortgage rates, there has never been a better time to become a home owner.

First Time Home Buyer Tip: Talk to a Loan Officer FIRST.

Most people do it wrong. They start looking at homes on the internet. Then they contact a Real Estate Agent and start looking at homes. Seems logical, but wouldn’t it make more sense to know if you can even get a loan, how much you can afford, what down payment is required, and what purchase prices you can qualify for first?

With that knowledge in hand, now you can start looking for homes you know you can afford, and what the payments, and loan programs would look like for you.

I feel bad when people have already found a dream home, only to be told for various reasons they cannot buy it. Don’t let this happen to you.  Get pre-approved with a local mortgage broker BEFORE talking to a Realtor.

Not only does it make sense, but your Real Estate Agent will appreciate that fact you are pre-approved so they can immediately focus on providing the best service to you without slowing things down while you get approved. Or, worse yet, having to completely refocus the search because of newly discovered information from a mortgage lender.

What is your home worth? Find out for free…

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banner_ad_appraisalWhat’s the value of your home? (MN & WI Only)

Many homeowners are curious about the appraised value of their home. An actual appraisal is expensive, and county tax records do NOT always reflect true market value. As you may be aware, home values are constantly fluctuating, and with the decline in average values, everyone has lost value.

But things are changing, average home values the past 12 months in the Minneapolis / St Paul, MN area have risen on average 14.1%.  So what your home is worth today?

There are many sites that claim to give you are idea, including Zillow, Trulia, and more. It is also a well known fact those sites have very questionable data, giving values that range from close, to crazy far off. The big problem is, where is the data they use coming from and how accurate is it?

We have a different tool to answer the estimated appraised value of your home question. Our system uses the Freddie Mac Home Price Index ( FMHPI ). FMHPI is calculated using a repeat-transactions methodology. Repeat transactions indexes measure price appreciation while holding constant property type and location, by comparing the price of the same property over two or more transactions. The change in price of a given property measures the underlying rate of appreciation because basic factors such as physical location, climate, housing type, etc., are constant between transactions. Averages of appreciation rates for different geographic areas and time periods are calculated using statistical regressions and the index values are derived from these averages

While the estimate may not be the actual or appraised value of your property, this can be a much more useful too than Zillow to gauge fluctuations and trends in your market which affect your home’s value.

Want to check your homes value? Simple click the link below! (MN and WI homes only)

FREE HOME VALUE ESTIMATE

 

De-Bunking 3 Mortgage Myths

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I hear things all the time, that as a Minnesota Based Mortgage Loan Officer, drive me crazy.  Here are a few things that seem to be high on the need to be de-bunked list.

Myth #1 – Banks are not lending.
NOT TRUE:  We are very busy! Mortgage companies continue to see a record number of home buyers applying and qualifying for mortgage loans, and refinance loans are still popular with our current low mortgage rates.  BAD credit loans are not available, so I suppose if you are a bad credit customer, yes, banks are not lending to you.

qualifyMyth #2 – APR & Interest Rates are the same thing / Shop by APR
NOT TRUE: The interest rate is the price you pay to borrow money. APR (annual percentage rate) includes other fees that you may have financed into your mortgage loan, like closing costs and mortgage insurance. Don’t be fooled when shopping for a mortgage. When the rate is below everyone else, you are likely paying higher closing costs and discount points to “buy” that rate. Paying discount points is a personal decision based current cash flow,  time in the property, loan-to-value, and more. Talk to your Minnesota mortgage lender to determine what financing options are best for your specific situation.

Myth #3 – You can be pre-approved for a mortgage without submitting documents.
NOTE TRUE: If you’ve been told you that are pre-approved for a mortgage loan, but you never sent W2’s, pay stubs, bank statements, etc to the lender, YOU ARE NOT PRE-APPROVED, regardless of what they tell you.

First Time Home Buyers, Get Pre-Approved BEFORE you talk to a Realtor
First Time Home Buyers, Get Pre-Approved BEFORE you talk to a Realtor

Getting a VA Home Loan in MN or WI

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Minneapolis, MN: VA Home Loans In MN and WI are probably the coolest mortgage loan lenders offer. VA Home Loans in MN and WIIt is available both while serving our country and after they are discharged.

Upon a veterans return,  hey usually are looking to re-establish themselves the the communities that they will be returning to. This means that many of them will be looking to purchase a home that they can settle in and raise their families.  A VA Mortgage can assist our Veterans in making that transition.

VA Mortgages provide our Veterans with two major advantages that other Mortgage programs do not have.

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 Mortgage benefits for a Veteran:

A VA Streamline Refinance is similar to the FHA Streamline Refinance. It is officially known as a IRRRL loan (interest rate reduction refinance loan) because of the money you can save by lowering your monthly interest rates. It was created by the VA in an effort help our veterans secure the lowest interest rate possible. This VA loan process is done quickly, with minimal hassle so our veterans can save immediately.

Those who are eligible:

  • Honorably discharged
  • Widow/widower of eligible service member or spouse of an MIA or POW
  • Wartime service – a minimum of 90 days active duty
  • Peacetime periods – 181 days of continuous active duty
  • Actively in service or a valid VA Form DD214
  • Have certificate of eligibility (I can usually get this for you)

Popular FHA Loans to become more expensive

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updateMinneapolis, MN: The popular FHA loans, requiring just 3.5% down payment are about to become more expensive.

Starting on April 1, 2013, the mortgage insurance premium will go up by .1% to 1.35%. While this is small, this is the most expensive mortgage insurance of all loans available in the market! This is also on top of the more than doubling of FHA mortgage insurance two-years ago. These staggering increases in mortgage insurance is highly expected to continue the decreased use of FHA loans.

To add insult to injury, on June 3, 2013, FHA mortgage insurance, which currently goes away when your loan-to-value drops to 78%, will be changed to “life of loan”.  Another words, it will NEVER go away, regardless of down payment or loan-to-value. This will only be one NEW loans. Existing FHA loans will not change.

Example: Purchase Price $175,000 3.5% down payment at 4% mortgage rate on 30yr.  Currently, that mortgage insurance would end at 78%, and cost someone $20,838.  Under the new rule, the mortgage insurance would be on the loan forever, and cost someone $42,447 – MORE THAN DOUBLE the cost.

There are buyers that qualify on income and credit who may not have the necessary additional down payment required for the 5%, or 10% down conventional loans. The 3.5% FHA program has provided a great vehicle to get into a home with a minimum amount of cash.

The average time for FHA mortgage insurance to go away is about 9.5 years. So for homeowners who anticipate staying in their home for ten years or less, the new changes might not have much financial impact. However, homeowners who expect to be in their home longer should seriously consider going with a 5% down conventional loan if at all possible.

For buyers currently in the market, you can avoid these increases by acting now.

Shopping for an Interest Rate?

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Minneapolis, MN:  Thinking of refinancing your home?  Are you a First Time Home Buyer?  Homeowners have thousands of choices when it comes to shopping for their mortgage loan, and sometimes all these options can spell trouble.

Pretty much every phone call I take starts with “What’s your interest rate?” While this seems like a very logical question to ask, it doesn’t give the lender all the information needed to give you an accurate answer.

rates_compareThis goes for online mortgage interest rate search tools too.  While you may put in some basic information, I haven’t seen a system yet (including ours) that could ever replace a actual Loan Officer and be 100% accurate.

There is no generic rate: A common misconception is there is a “rate”…   We’ve all hear the commercials… “The rate today on a 30-yr fixed is ____, and only at so and so company.”  I cry foul!  The only way you can ever get an accurate interest rate quote is to supply a mortgage company with a complete application, and the lender also reviews a credit report.

Credit Score: To accurately quote you an interest rate, a lender has to run your credit to determine your credit score. Interest rates can vary greatly on some programs depending on credit score. Most loan programs have pricing adjustments based on credit score, so without looking at your credit, any lender quote is just guessing.  While I like to believe what people tell me, until I see for sure, it doesn’t mean anything.  I can not tell you how many times someone has said “I have excellent credit,” (which is a 740 middle credit score or higher), so I quote them based on that score,  only to actually review their credit the next day to find out their score is a 700. On some programs, the difference between a 740+ score, and a 700 score could mean as much as 1/4% (.25) higher interest rates!

There are at least 21 criteria that goes into determining your interest rate.  Here is a small sampling:

  1. Credit score
  2. Loan program
  3. Loan Size
  4. Down Payment (or equity position)
  5. Owner-Occupied or Investment
  6. Closing cost options

I consistently hear, after I’ve taken a full application and accurately quote a client “That’s different than I saw (online, in the news paper, on TV).” The general attitude is that  my quote is high.  The reality is you are usually comparing an accurate quote against teaser advertising rates, or rates that do not apply in your situation.

So be mindful of the difference between advertising and reality.  Let a professional Licensed Loan Officer (NOT A BANK), review your complete application for an accurate quote.

 

30-Year Fixed-Rate Mortgage Averages 3.40% for week ending Jan 3, 2012

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lmrMinneapolis, MN:  Freddie Mac yesterday released the results of its Primary Mortgage Market Survey® (PMMS®), showing fixed mortgage rates moving higher following December’s employment report. The 30-year fixed averaged 3.40 percent, its highest reading in eight weeks. The all-time record low for the average 30-year fixed was 3.31 percent set November 21, 2012.

News Facts

  • 30-year fixed mortgage rates (FRM) averaged 3.40 percent with an average 0.7 point for the week ending January 10, 2013, up from last week when it averaged 3.34 percent. Last year at this time, the 30-year FRM averaged 3.89 percent.
  • 15-year fixed mortgage rates this week averaged 2.66 percent with an average 0.7 point, up from last week when it averaged 2.64 percent. A year ago at this time, the 15-year FRM averaged 3.16 percent.
  • 5-year adjustable mortgage rates (ARM) averaged 2.67 percent this week with an average 0.6 point, down from last week when it averaged 2.71 percent. A year ago, the 5-year ARM averaged 2.82 percent.

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

“Fixed mortgage rates increased slightly following a positive employment report for December. The economy added 155,000 jobs, above the consensus market forecast, and November’s job growth was revised upward by another 24,000 workers. This helped keep the unemployment rate steady at 7.8 percent, the lowest since December 2008. For all of 2012, 1.86 million jobs were created and represented the largest annual gain since 2006.”

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.

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

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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.

 

Low appraisals hurting housing recovery

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Story from KARE TV in Minneapolis / St Paul, MN. Story touches on it lightly, but misses the major issue that new mortgage lender / appraiser rules put into place in 2009, known as HVCC (Home Value Code of Conduct), now simply known as the Appraiser Independence rules, are the real problem. Appraisers are the holders of the countries equity, and the new rules have caused trillions of dollars in lost equity.

What do you think?

 

Mortgages rates hover near record lows for week ending Nov 2, 2012

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Mortgage Rates Settle in Near Record Lows

Minneapolis, MN: Freddie Mac today released the results of its Primary Mortgage Market Survey® (PMMS®), showing fixed mortgage rates mixed following the monthly employment report but continuing to hover near their record lows over the past six weeks. Last year at this time, the 30-year fixed-rate mortgage averaged 3.99 percent, dropping below 4.00 percent for the first time since Freddie Mac started reporting its weekly mortgage rates survey in 1971.

News Facts

  • 30-year fixed-rate mortgages (FRM) averaged 3.40 percent with an average 0.7 point for the week ending November 8, 2012, up from last week when it averaged 3.39 percent. Last year at this time, the 30-year FRM averaged 3.99 percent.
  • 15-year fixed rate mortgages this week averaged 2.69 percent with an average 0.7 point, down from last week when it averaged 2.70 percent. A year ago at this time, the 15-year FRM averaged 3.30 percent.
  • 5-year adjustable mortgages (ARM) averaged 2.73 percent this week with an average 0.6 point, down from last week when it averaged 2.74 percent. A year ago, the 5-year ARM averaged 2.98 percent.

Quotes

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

“Mortgage rates remained near record lows following the employment report for October. The economy added 171,000 jobs, above the market consensus forecast, and the two prior months were revised up a combined 84,000. The Labor Department also reported that the unemployment rate ticked up to 7.9 percent and that average hourly wages were unchanged.”

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 MN and WI mortgage interest rates.

 

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

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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

Mortgages Rates for week ending Oct 26th, 2012

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Mortgage Rates Continue To Hover Near Record Lows

St Paul, MN: Freddie Mac today released the results of its Primary Mortgage Market Survey® (PMMS®), showing fixed mortgage rates moving slightly lower while continuing to remain near their all-time lows this week amid signs of a growing economy and low inflation.

News Facts

  • 30-year fixed-rate mortgage rates (FRM) averaged 3.39 percent with an average 0.7 point for the week ending November 1, 2012, down from last week when it averaged 3.41 percent. Last year at this time, the 30-year FRM averaged 4.00 percent.
  • 15-year fixed rates mortgage rates this week averaged 2.70 percent with an average 0.7 point, down from last week when it averaged 2.72 percent. A year ago at this time, the 15-year FRM averaged 3.31 percent.
  • 5-year adjustable mortgage rates (ARM) averaged 2.74 percent this week with an average 0.6 point, down from last week when it averaged 2.75 percent. A year ago, the 5-year ARM averaged 2.96 percent.

Quotes

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

“Mortgage rates remained relatively unchanged this week on signs of a growing economy and low inflation. The economy grew 2.0 percent in the third quarter with residential fixed investment contributing 0.3 percentage points to growth. The core price index of personal consumer expenditures grew 1.7 percent between September 2011 and 2012 and was within the Federal Reserve’s preferred target range.”

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 MN and WI mortgage interest rates.

 

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

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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.

 

MN Mortgage Rates Remain Basically Unchanged

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Mortgage Rates Relatively Unchanged

Freddie Mac today released the results of its Primary Mortgage Market Survey® (PMMS®), showing fixed mortgage rates moving slightly higher while continuing to remain near their all-time lows helping to support the housing market.

News Facts

  • 30-year fixed-rate mortgages (FRM) averaged 3.41 percent with an average 0.7 point for the week ending October 25, 2012, up from last week when it averaged 3.37 percent. Last year at this time, the 30-year FRM averaged 4.10 percent.
  • 15-year fixed rate mortgages this week averaged 2.72 percent with an average 0.6 point, up from last week when it averaged 2.66 percent. A year ago at this time, the 15-year FRM averaged 3.38 percent.
  • 5-year adjustable-rate mortgages (ARM) averaged 2.75 percent this week with an average 0.6 point, the same as last week. A year ago, the 5-year ARM averaged 3.08 percent.

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

“Mortgage rates remained relatively unchanged this week and should continue to support the housing market and mortgage refinance. Existing home sales in September eased slightly to 4.75 million but was the second strongest annualized pace since May 2010. Moreover, new home sales rose to the most since April 2010. In addition, low rates and strong demand have already pushed the FHFA purchase-only home price index in August to its highest level (seasonally adjusted) since June 2010. And not surprisingly, the Federal Reserve in its October 24th monetary policy announcement acknowledged the further signs of improvement in the housing sector, albeit from a depressed level.”

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 MN and WI mortgage interest rates.