All posts by Rick McDeid

Always thought FHA was a one-time-good-thing? Well think again!

FHA – The Second Time Around

 

Always thought FHA was a one-time-good-thing? Well think again!

 

Does your buyer currently have an FHA mortgage and –

 

  • Have limited down payment funds?

OR

  • Have only gift funds from family for their down payment?

OR

  • Have lower credit scores than allowed on most conventional financing?

 

Then your buyer may need another FHA mortgage. But how is that possible if they haven’t sold their current FHA financed home?

 

The following situations allow your buyer to have more than one FHA mortgage

  • Relocation – Must document unreasonable commute distance from current home.
  • Increase in Family Size – Must have current mortgage balance at or below 75% LTV.
  • Vacating a Jointly Owned Property – Example: divorce.
  • Non-Occupying Co-Borrower – Co-signed with family on their home.

 

But wouldn’t they have to qualify with two mortgages? Not in most cases!

  • Relocation: The “relocation” exception allows the current home to be rented and typically (depending on area) 85% of the monthly rent can be used to offset the current payment. One-year lease and proof of security deposit or first month’s rent will be required.
  • Increase in Family Size: Allows the home to be rented with the same rules as Relocation (there MUST be an appraisal on current home and 25% equity).
  • Vacating a Jointly Owned Property: This exception may allow the borrower an exemption from including the monthly debt at all, but only if

a) There is a final divorce decree that awards the home and the debt to the ex-spouse; or

b) The borrower can prove the remaining occupant co-borrower has been making payments on their own and has an on-time 12-month payment history.

  • Non-Occupying Co-Borrower: This exemption may allow the borrower exemption from inclusion of the monthly debt as stated above in b).

 

So there you have it. One buyer – Two FHA loans – Another home sold

5 Things to Know Before Purchasing Your First MN House

1. Don’t go on Blind Dates

Don’t be set up. Assess in great detail what you are looking for in a MN house. The more strict and structured you make your needs/wants list beforehand, the less likely you are to be blinded when you view a house.

You may get excited by the glass tile tub surround but don’t overlook the fact that one of your requirements was an attached garage. That tile is pretty, but it’s not going to keep your car warm and dry all winter long!

Set strict priorities and you are far more likely to get a house that you can have a long-term relationship with.

2. Don’t go Alone

Having a real estate professional on your side will help you during every stage of the home buying process. From getting advance notice of newly listed MN house, skilled negotiation, and help with paperwork, having someone on your side is extremely important.

3. Buy a Lifestyle as well as a MN House

Owning a home is a major life adjustment. Not only do you have to keep in consideration the layout of the house itself, but you will need to consider the surrounding areas as well. Things such as the locations of schools, churches, doctors, parks and anything else you consider important to your lifestyle should be taken into account.

You will not spend every minute of your time in your home and therefore you need to look at the overall picture when purchasing a house.

4. Your MN House Will Also Own You

Buy within your means.

When you get pre-approved for a mortgage, focus on seeing that number as a maximum.

Getting pre-approved for an amount slightly higher than you were considering spending in the first place can be very tempting with the new options that a higher price range opens up.

Buying even a little out of your means can make a big impact on your finances for years to come. Particularly as a new homeowner, you may be surprised by the increase in utilities, and the burden of expenses like property taxes and maintenance.

But do you need it?

Various house toys weigh in.

Of course a basement waterfall and grotto is a practical and useful addition to any home. That’s pretty much the only thing standing between you and the playboy lifestyle you’ve always dreamed about, right? But who’s going to clean it?It’s easy to fall in love with certain features of a home, but to find out that those same features, in the long run, are your least favorite. Here are a few common ‘extras’ and a quick assessment of their relative values.

1. In-floor Heating
Also referred to as radiant heat, in-floor heating is a brand new invention. Well, except that the Romans did it a couple thousand years ago by channeling hot air under the floors of their villas. And Frank Lloyd Wright did it in the thirties with hot water, but other than that . . .
For: In-floor heat comes in two primary forms: hot water heat and electric heat, and there are many advantages. The dramatic energy savings promised shouldn’t prompt you to ask for a decrease in salary just yet, since the more popular hot water radiant heat usually requires a second hot water heater and won’t shave too much off of your bill, but there are some notably appealing elements to in-floor heat in general. Radiant heat is just that – even and consistent, without the up-and-down temperature shifts associated with most conventional heating systems. It’s also silent and invisible, with no bulky radiators or even register vents ruining the feng of your shui. Radiant heat also won’t dry the air, and won’t have you hopping about looking for your slippers on a cold morning.

Against: In-floor heating systems are still considered a luxury, and can add a fair bit to the value of a home. They are new, and potential long-term issues have not been entirely worked out. A handful of people also are leery about the prospect of piping a significant amount of water throughout their cherished home for fear of potential leakage. All relatively minor concerns.

Assessment: Find someone with in-floor heating who doesn’t love it. I dare you.
2. Backyard Pool
It’s the quintessential luxury item that announces once and for all that you are a big dog, even in parts of the country like this one where it can only be used about ten minutes per year. It is the swimming pool. From pools that are little more than big pits of standing water to jewel-encrusted infinity pools that usually adjoin large bodies of water, pools were once the thing. Are they still?

For: A 2004 4-state NAR study found that having a pool increased property values from 8 to 15%. The idea of kicking back all summer with a piña colada, sitting next to the lapping water with friends can be quite attractive. And rightfully so.

Against: Safety issues have not been blown out of proportion by the media. Pool deaths happen all the time, there’s no getting around that fact. Pools are expensive to maintain, even without hiring a pool cleaner, and are a lot of work. As beautiful as a pool can be when it is maintained properly, it can be an eyesore if it is not. A pool tends to negate having any significant usable space for a backyard. Am I missing anything?

Assessment: The issues involved with owning a pool can be overcome, and many people enjoy having a pool very much. You just have to want one really badly for it to be worthwhile.

3. Dream Kitchen
Kitchens do cool things these days. Appliances paneled to look like cabinets, an extra tap above the stove for filling large pots of water, $15,000 pounded-copper range hoods, and 460 different countertop materials . . .

For: Kitchens are finally being designed with maximum utility in mind. When shopping for a home, focus on the kitchen – it is where you will likely spend a great deal of your time, and the room in which every party tends to congregate. Before you fall in love with that Kohler faucet, however, analyze the kitchen’s layout from a purely utilitarian standpoint. Is the magic triangle of sink-stove-fridge arranged conveniently? Are cabinets and other storage in logical places? Is there sufficient light? And most importantly, is this a space you will feel comfortable and happy in? Don’t underestimate the importance of a functional and attractive kitchen.

Against: Be careful not to fall in love with the impermanent fixtures in a kitchen. While those glass-front, backlit uppers may brilliantly display the seller’s Royal Daulton bone china, will your mixed collection of garage sale Melmac have the same effect? Likewise, if your idea of cooking is heating up last night’s pizza, perhaps space would be better used elsewhere.

Assessment: The kitchen is the hub of virtually any home. Don’t underestimate its importance.
4. Activity Rooms
This is an overly broad categorization, of course, but activity rooms like workshops, games rooms, and exercise rooms tend to hold common appeal – and common drawbacks.

For: Having the right setup for a particular activity can be inspiring. Having a single power tool in each room of your house and each corner of the garage and shed is not exactly the ideal situation for building that crib you started on for your daughter and are determined to finish before the birth of you granddaughter. Likewise, if you have the latest elliptical trainer and weight set in a room next to your bedroom with a 12 foot plasma TV facing it, perhaps you will find that six-pack after all.

Against: If you can’t make a dovetail joint, all of the tools in the world will not give you that knowledge. If you haven’t lifted anything heavier than a handful of pork rinds in the last decade, a workout room will likely soon become just a TV room with uncomfortable seating. Unreasonable expectations usually develop into unreasonable decisions.

Assessment: Your home should inspire you and will, to a certain extent, dictate your lifestyle. Be rational in your decisions, however, and aim for versatility rather than rooms that are locked in to a particular use that may not be as useful in the future.
The Bottom Line

With all of your dream home features, try to let reason prevail (or at least get a word in edgewise). You may absolutely worship the tumbled marble rainforest shower with the heated towel rack, but it will be of little comfort every morning and night when you are cursing the home’s lack of closet space. It is often the most boring attributes of a home that will give you the most pleasure.

Now, off to luxuriate in my rainforest shower. I had to take out the bedroom to install it, but that’s okay, I don’t mind sleeping in the kitchen . . .

How to get the Right home at the Right price

Whether you are buying your first home or your fifth, the process of buying a home can be an emotional, time-consuming venture. Feeling that, in the end, you made the right decision and got a good deal can make all the difference.As with most major decisions, the amount of work and research you undertake before you start shopping can have a dramatic effect on how well you do in the end.
#1 Do you really need that backyard tennis court?
Everyone can picture their ideal home. If you haven’t thoroughly prepared yourself prior to viewing houses, chances are that you will find what you think is your ideal home, and will wind up paying too much for it.It is essential to treat the buying process in a slightly detached manner. Those who fall in love with houses usually pay too much.

That’s why it’s recommended that you develop a list of needs and one of wants. When looking at houses, make sure that they cover all of your needs – things like adequate space, a good neighborhood, perhaps a garage – and then have fun with items on your wants list. Treating the process in a regimented manner will help you to make a rational, informed decision.
#2 Get pre-approved
Visit your lending institution prior to shopping. Be sure to get a mortgage commitment in writing. Being pre-approved gives you a solid price range, and lets your Realtor® and potential sellers know that you are serious and not just a browser.

#3 Get the right people behind you
Buying a home is a complicated process, with many people involved. Having the right people on your side can make a big difference. An experienced, dedicated, and knowledgeable Realtor® can put a team of advocates, including lenders, lawyers, home inspectors and movers, on your side immediately.

#4 Communicate
The more you share with your Realtor®, the better he or she will be able to represent you. Letting your representative know exactly what you’re looking for, in terms of needs/wants, price range, and location, can eliminate unnecessary trips to unsuitable homes and that focus can help ensure that you wind up in the right home.

#5 Location, location, location
It’s still true. The desirability and resale value of your home depend on location more than any other factor. People want a desirable community that includes character, quality of schools, access to work, major transportation arteries, recreational facilities, etc.

On your viewing trips, take a careful look and ask the following questions: How does this home compare to others in the neighborhood? Are yards fenced? Are there many children playing in the streets? Are the front and back yards and the exteriors of the homes properly maintained? The less expensive houses in a better area tend to appreciate faster than the most expensive houses in a less desirable area.

Additional factors that affect the property value of a home include traffic, sounds, smells, zoning bylaws, and many others. Be objective. Be sure you are completely satisfied with the neighborhood. If you choose a neighborhood with problems, you likely won’t get as much as you hoped with it comes time to sell.
#6 Use your Realtor’s® knowledge
Your Realtor® is trained in all aspects of real estate, including understanding supply and demand, economics, and the neighborhoods of the city in which they practice. A professional Realtor® can do much of the work for you, by reviewing your needs, reviewing available properties, and making an informed match. A comprehensive knowledge of the available homes in your neighborhood is one of your Realtor’s® strongest assets. With the aid of computerized systems, a Realtor® is notified within hours when a home becomes available.

#7 Pay attention to red flags
When evaluating a home, be sure you know the difference between acceptable and unacceptable problems. Cosmetic items like peeling paint, worn carpeting, or unattractive wallpaper can be easily remedied, and can be used as negotiation items, as there will be costs involved in updating the home.

Major problems, however, are clearly red flags. Look for items such as major foundation cracks, water damage, outdated electrical systems, and inadequate plumbing. These items could be too expensive to remedy to make the home a worthwhile investment.
#8 Hire a home inspector
A home inspection is an inexpensive way to gain peace of mind, and guard your pocket book. A proper inspection will cover all areas of the house including foundation, electrical, heating, plumbing, floors, walls, ceilings, attic, roof, siding and trim, porches, patios, decks, garage and drainage. A professional inspector can give you an objective view of the property, with a written report, indicating the present condition and items that will need repair.

#9 Be cautious with fixer-uppers

Sometimes, a fixer-upper can be purchased below market value, and once sufficient repairs are made, can be sold at a significant profit. However, not all fixer-uppers will bring in the profits you might expect.

Consumers often overestimate their level of dedication to doing extensive renovation work, and underestimate the costs associated with such work. A wall that needs to be replaced can often lead to the discovery of faulty plumbing, electrical, or other major undertakings. Your Realtor® and home inspector are your best allies when it comes to cost-benefit analyses.

#10 Consider your future needs
A move can be a major undertaking. Take a good look at your current lifestyle and consider the future. Will you need extra space for a home office, a child, or perhaps a child moving back home? Perhaps it may be easier and less expensive if you purchase a home that can meet these needs now, rather than moving up to a larger home a few years down the road.

#11 Proceed quickly
When you’re ready to buy, act. Good properties sell. This is especially true given the current state of most real estate markets. However, when you work with a Realtor®, you have access to the latest technology. As part of the MLS and Agent Handshake networks, a Realtor® has access to properties within hours of when they are listed.

Technology works to your advantage. Many Realtors® now have personalized websites which allow you to sign on as a client, and receive notification of new listings via email. You save time and effort, and you can view only those homes that come closest to meeting your needs.

#12 Clarify relationships
In any real estate transaction, be very clear about who is working for whom, and what the relationship represents. Unless otherwise stated, an agent represents the seller in transactions for the sale of a home. This agent, as part of his or her fiduciary duty, must ensure that the seller’s (and not your) position is represented throughout the entire process. Get a buyer’s agent on your side, or ensure that someone is acting in your best interests.

#13 Ask for a written CMA
A Comparative Market Analysis (CMA) is an analysis of comparable homes in a given neighborhood. It shows you the sale prices of comparable homes in the neighborhood, along with asking prices of other homes in the area currently on the market. A Realtor® can request this report for any home and neighborhood. Ask for this report in writing. With this valuable document, you’ll have solid, reliable information about how fairly a home is priced compared to its real market value.

#14 Know the seller
Understanding a seller’s reasons for moving could work to your advantage during negotiations. For instance, a seller who has been transferred to another city may be more motivated to sell than someone who is still shopping for a new home. A vacant house, or a house that has been on the market for several months and has been reduced in price, could also provide the opportunity for lucrative negotiations.

#15 Keep it impersonal
Conversely, information could be used to your detriment. Information about your mortgage, size of down payment, move-in deadline, or circumstances for buying could be used to the seller’s benefit in negotiations. While you want your Realtor® to know these details, maintain your poker face and keep your cards hidden with the sellers and their agents.

#16 Measure twice, sign once
While you definitely want to move quickly once you’ve made the decision to purchase, you don’t want to cave in to pressure for a quick close. Someone who is trying to pressure you into buying a home is likely doing so for a reason. Make sure the reasons for you to buy a home are your reasons, not theirs.

#17 Exercise your negotiating skills
Even if you prefer not to haggle, it’s worth it, especially when it’s your home and one of your biggest investments. Most people expect to haggle over the price. There is always room for negotiation, and your Realtor® should be a professional negotiator.

#18 Avoid bidding wars
In some cases, the seller’s Realtor® may use scare tactics to rush the sale or increase the price. Falling for this trap could cost you money. If there is another buyer, or some other reason this pressure is being applied, whoever wins also loses because they tend to overpay. Let reason be your guide, not passion.

#19 Get it in writing
Legally, sellers must disclose all known material defects of a property. Ask for this in writing. Also be sure to consider the ramifications of these defects. Will they be costly down the road? Are they “serious” defects?

#20 Be aware of hidden costs
While Realtors® often tempt first-time buyers with rent/mortgage comparisons, there is more to a home than simply the mortgage. You will be responsible for other items including mortgage insurance, appraisal fees, legal fees, inspection fees, transfer taxes, title insurance, inspections, property tax, increased bills, etc. Your Realtor® can give you a good idea of the costs associated with buying a home that are beyond its final negotiated price.

Things Needed for a Successful Home Loan Closing

Please Call Us at Our Home Real Estate with any of Your Questions 763-645-3488

  • Most RecentYTD pay stubs documenting 1 full month of earnings for All Borrowers
  • 2009 & 2010 tax year w-2’s for All Borrowers
  • 2 months bank statements for All Borrowers
  • Recent 401K or IRA statement (s)
  • Home owners insurance information
  • If self-employed most recent 1 year complete federal tax returns Personal and business Signed and Dated
  • Association name and phone number
  • Divorce decree Certified copy
  • Child support from court evidence along with 3 months of bank statements showing depoist, 3 months cancled checks, and evidence of 3 year continuation
  • Copy of Front and Back showing earnest money check has cleared
  • Realtor contact information, number and email
  • Employment history= Employer, address, phone number, position, Gross income, start date & end date, 2 years of employment history is needed
  • VA Loan need form DD214 and eligibility certificate
  • Social Security or Pension Need Award letter and 1099 and paycheck stub

Minneapolis Home Buyer Representation

When purchasing a home, you are faced with a multitude of decisions! The primary one is whether you are actually prepared to purchase a home. Locating the perfect home is not always an easy task, and obtaining a mortgage loan can be a complex and tiring process. Although, once you have determined that you are ready to move forward with the required effort towards your home-purchasing goal, the rewards are unquestionable.

So you’ve decided to buy a home in Minnesota, but you don’t know where to start. Do you pick a neighborhood first, set a budget, or hire an agent to make your every choice? Buying Minneapolis real estate can be tricky, even for experienced home buyers. And when you’re spending hard-earned money on your dream home, the last thing you need is a wrong decision that can cost you thousands more

While at your side each step of the way, we will make the process of purchasing a home easier, more enjoyable, less time-consuming, and less expensive than if you undertook this challenge on your own. We will help you prepare so that sellers perceive you as a preferred buyer, help you locate and assess properties for sale that match your specifications, and help you through the myriad of details attending the actual purchase.

There are tremendous benefits of working with a Our Home Real Estate Buyers Agent. These are just a few of those benefits:

  • The Buyer’s Agent works exclusively for you the Buyer
  • Direct access to all properties for sale (with custom Minneapolis home search reports
  • Our Buyer Agent’s will negotiate the best price and terms for the home Buyer, and not the seller
  • Direct access to the latest up-to-date real estate market trends and information
  • Access to the best Minnesota home inspectors, lenders, and contractors
  • A full time Minneapolis Real Estate professional agent working for YOU!

Minneapolis Real Estate Agents & Minneapolis Mn Realtors:

When you are buying a Minneapolis home in today’s Minneapolis Mn real estate market, it’s important to have confidence in your Minneapolis Mn real estate agent. Our commitment as your local Minneapolis Realtors® is to provide you with the specialized Minneapolis Mn real estate service you deserve. When you are an informed Minneapolis home buyer or home seller, you’ll make the best decisions for the most important purchase or sale in your lifetime. That’s why Our goal is to keep you informed on trends in the marketplace using the latest statistics in your area, our objective is to work diligently to assist you in meeting your Minneapolis Mn real estate goals.

We are always familiar with the current homes on the market, and we know neighborhood values well, so we can help you determine which properties are fairly-priced and in good condition before you start your search.

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Relocation Checklist

Logistic items to consider

1. Short Term Accommodation

2. Air Travel

3. Land Transportation

4. Household goods

5. Furniture (Storage and purchasing)

6. Vehicle purchase

7. Departure

8. Spousal Recruitment

9. Migration & Visa Assistance

10. Cleaners

11. Financial

12. Insurance

13. Movers

_ Be ruthless! Go through each room and decide what to get rid of.

_ Start planning a yard sale or contact your local charities.

_ Find out whether your employer is paying for any moving expenses if any

_ Contact moving companies for estimates and information.

_ Make an inventory of everything to be moved

_ Open a bank account in your new location and change currency if necessary

_ Cancel all newspapers and services at your previous location

_ Contact a real estate agent in your new location so they can begin searching for your new home or rental property

_ Cancel or transfer mobile and telephone numbers

_ Make sure your passport is valid

_ Collect everything you have loaned out and return everything you have borrowed

_ Start pulling together medical and dental records

_ Schedule disconnection of utilities at your old home and connection at your new one

_ Make hotel and airline reservations if you need them

_ Get children’s school records

_ Find a cleaning service that will do a final cleaning of your home

_ Transfer or close bank accounts at previous location

_ Remove all jewelry and other valuables to a safety deposit box or other safe place to prevent loss during the move.

_ Check into storage options for those items you cannot move immediately and may need to store temporarily

_ Make back-up copies of important files on your computer before packing it up

_ Separate cartons and luggage you need for personal travel

_ Pack a special box with essentials you’ll need for the first few days (Make sure this box is marked ”Do not move”)

_ If you have children or pets, arrange for someone to look after them during the move

_ Pack cleaning materials and tools separately

_ Arrange for you mail to be forwarded

_ Make a final check of the entire house (basement, closets, shelves, every room)

Contact a Minneapolis MN relocation expert for additional help