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Dakota County First Time Home Buyer Program Money Available for 2010 with Down Payment Assistance

Mortgages Unlimited, MN and WI

2010 Minnesota Home Buyer Program Announced

Dakota County First Time Home Buyer Loan Programs with Down Payment Assistance
Whether you are buying an existing home or building a new one - a Dakota County First Time Home buyer Loan may help you make homeownership a reality. Homebuyers accessing a First Time Homebuyer Loan may qualify for a below market interest rate may also be eligible for Down payment and Closing Cost Assistance.

2010 Dakota County First Time Home Buyer money NOW AVAILABLE.  Apply online and be ready to go!

Up to $10,000 also available in down payment and closing cost assistance to those who qualify

Most Minnesota city, county and state mortgage and down payment assistance funds are limited, and on a first-come, first-serve basis.  Contact us as early as possible in the home buying process to be sure you are qualified.  

If you have questions about the home buying process, call 651-552-3681, or APPLY online 24-hours a day via our secure application. There are no costs or obligations.  

Dakota County Basic Program Guidelines & Details

  • Loans are 30-year fixed rate mortgages and can be FHA, VA insured mortgages.

  • Income Limits are $83,900 for a one or two person household and $92,290 for households with three or more persons.

  • Maximum Purchase Price = $276,683

  • Eligible properties include single family homes, townhomes and condominiums located in Dakota County, Minnesota.

  • Buyers must be a first time homebuyer or someone who has not owned their primary residence in the last three years.

  • Traditional down payment and closing cost requirements apply.

  • Home buyers must put a minimum of $750 down

  • Buyers must occupy the home as their primary residence after purchase.

  • First Time homebuyer funds are reserved on a first-come, first-serve basis

  • Buyers MUST attend Home Stretch Home Buyer Education Classes

To apply for a Dakota County First Time Homebuyer Loan, contact a participating mortgage lender like us. The lender will review your income and credit history to determine whether or not you will qualify for the loan.

It is important that you know not all lenders are able to do MHFA, City, County, Bond loans, FHA or VA loans. We are proud to be a provider of many of these loans, including the Dakota County First-time home buyer down payment assistance program.

Knowing your full exact situation will help us determine if a government assistance loan programs are right for you. Being pre-approved also gives you ultimate buying power and the upper hand in negotiating.

Ready?   There are no costs or obligations to get started!

Down payment & Closing Cost Assistance Program
In addition to mortgage financing, eligible buyers using a Dakota County First Time Home buyer Loan can access funds through the CDA's Down payment and Closing Cost Assistance Program to help with the initial costs of owning a home. The CDA offers two types of down payment and closing cost assistance. Each may be used individually or in combination with each other.

In addition to grant assistance, income eligible buyers may access down payment and closing cost assistance loans of up to $10,000. These loans are zero interest, deferred loans that are paid back at the end of the 30-year mortgage term or when the home is sold or refinanced. Eligibility is based on the buyer's gross household income adjusted for family size and the successful completion of a Housing Quality Standards Inspection.

Down Payment & Closing Cost Loans Income Limits

DPA Assistance Amounts

There are three levels of assistance, based on household income:

  • Level 1. Households earning at or below 50% of median income are eligible for 10% of the base first mortgage amount, up to $10,000.

  • Level 2. Households earning 51-80% of median income are eligible for 5% of the base first mortgage amount, up to $7,500.

  • Level 3. Households earning more than 80% of median income up to the program limits are eligible for 2.5% of the base first mortgage amount.

Household Income Limits (These limits are determined by HUD and subject to change in March 2010). The “household” income includes all persons living in the property, regardless of family relation or whether they are a party to the first mortgage. Income from all members of the household age 18 years and older must be included when determining which level of assistance applies to the household

 

1 person

 2 person

3 person

4 person

5 person

6 person

7 person

8+ person

Level 1

$29,350

$33,550

$37,750

$41,950

$45,400

$48,650

$52,000

$55,350

Level 2

$44,800

$51,200

$57,600

$64,000

$69,100

$74,250

$79,350

$84,500

Level 3

$89,300

$89,300

$92,290

$92,290

$92,290

$92,290

$92,290

$92,290

Down payment and closing cost assistance funds are reserved on a first-come, first-serve basis. At the time you apply for a First Time Homebuyer Loan through a participating mortgage lender, you will also apply for down payment assistance.

Home Stretch ® Homebuyer Education Program
The Home Stretch Program teaches potential homebuyers about the entire home buying process and the responsibilities of homeownership. Topics covered in these monthly seminars include: Budgeting and Credit Issues, Financing and Qualifying for a Home, Shopping for a Home, The Purchase Process, Closing on a Home and Life as a Homeowner.

Home buyer education is taught by professionals in the home buying field. The classes are typically held from 6 to 9 p.m. each night and you must attend all three nights to complete the class. The cost to attend the class is varies depending on exact class taken, but is very small ($10- $20 per household). 

Pre-registration is required. Call 651-552-3681

Pre-Purchase Counseling Program
The CDA's Pre-Purchase Counseling Program provides free individual counseling to Dakota County homebuyers and can be accessed anytime during the home buying process, whether you are buying a home now or in the future.

This program assists homebuyers in creating a plan to become successful homeowners. The plan may include: credit repair, creating a household budget in order to save for a down payment on a home, identifying mortgage loan products that best meet the household's needs and/or examining and answering questions about loan documents.

Eligible Properties include:
Existing single family homes, townhomes, FHA approved condominiums or duplexes in Dakota County (Duplexes can be no more than 5% of the program. Duplexes are limited to existing homes that are at
least 5 years old.)

New construction is eligible in Apple Valley, Burnsville, Eagan, Empire Township, Farmington, Hastings, Inver Grove Heights, Lakeville, Mendota Heights, Rosemount, South St. Paul, Sunfish Lake and West
St. Paul.

Homes are considered new if never previously occupied.

If you have questions about the home buying process, call 651-552-3681, APPLY ONLINE 24-hours a day via our secure application. There are no costs or obligations.

Joe Metzler is a Certified MN Mortgage Specialist (MMS). He and his team at Mortgages Unlimited are pround to provide this Minnesota First Time Home Buyer Program. Call him today or click HERE to apply for your Dakota County First-time Homebuyer loan and to make your home buying dream come true!

 

0 comments • Joseph Metzler MLO MMS UMB • February 03 2010 07:45AM

BIG FHA Changes announced. Drop in seller paid closing costs to 3%

 

Mortgage broker in St Paul Minneapolis MN

BIG FHA CHANGES ANNOUNCED

Today, FHA Commissioner David Stevens held a press conference to announce continued, fundamental procedural and future legislative program changes. 

Prior to formally responding to hundreds of comments received regarding the proposed changes in net worth requirements and what companies will be allowed to underwrite FHA insured loans, the Commissioner this morning announced immediate and planned changes based on three critical priorities:

  • Produce adequate capital reserves to meet the 2% requirements
  • Insure the changes do not disrupt the housing market
  • Do not disrupt the ability to support the underserved markets

The Commissioner announced four specific areas of change:

1.       The front end MIP will be increased form 1.75% to 2.25%. The change will be announced 1/21/10 with a spring 2010 effective date.

2.       Update the combination of FICO scores and LTV maximum:  FICO's less than 580 will see down payment requirements increase to 10%

3.       Reduce seller contributions from 6% to 3% to conform to the conventional market.

4.       Increase enforcement on FHA lenders

 

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Full text from HUD

FHA Announces Policy Changes to Address Risk and Strengthen Finances

New Measures Will Help FHA Better Manage Risk, While Maintaining Support for the Housing Market and Access for Underserved Communities

WASHINGTON – Federal Housing Administration (FHA) Commissioner David Stevens today announced a set of policy changes to strengthen the FHA’s capital reserves, while enabling the agency to continue to fulfill its mission to provide access to homeownership for underserved communities. The changes announced today are the latest in a series of changes Stevens has enacted in order to better position the FHA to manage its risk while continuing to support the nation’s housing market recovery.
The FHA will propose to take the following steps: increase the mortgage insurance premium (MIP); update the combination of FICO scores and down payments for new borrowers; reduce seller concessions to three percent, from six percent; and implement a series of significant measures aimed at increasing lender enforcement. U.S. Housing and Urban Development Secretary Shaun Donovan previewed the changes in December of last year, noting that the FHA would announce additional details before the end of January.
“Striking the right balance between managing the FHA’s risk, continuing to provide access to underserved communities, and supporting the nation’s economic recovery is critically important,” said Commissioner Stevens. “When combined with the risk management measures announced in September of last year, these changes are among the most significant steps to address risk in the agency’s history. Additionally, by continuing to provide affordable, responsible mortgage products, FHA will support the housing market’s recovery. Importantly, FHA will remain the largest source of home purchase financing for underserved communities.”
Announced FHA Policy Changes:
  1. Mortgage insurance premium (MIP) will be increased to build up capital reserves and bring back private lending
    • The first step will be to raise the up-front MIP by 50 bps to 2.25% and request legislative authority to increase the maximum annual MIP that the FHA can charge.
    • If this authority is granted, then the second step will be to shift some of the premium increase from the up-front MIP to the annual MIP.
    • This shift will allow for the capital reserves to increase with less impact to the consumer, because the annual MIP is paid over the life of the loan instead of at the time of closing
    • The initial up-front increase is included in a Mortgagee Letter to be released tomorrow, January 21st, and will go into effect in the spring.

  2. Update the combination of FICO scores and down payments for new borrowers.
    • New borrowers will now be required to have a minimum FICO score of 580 to qualify for FHA's 3.5% down payment program. New borrowers with less than a 580 FICO score will be required to put down at least 10%.
    • This allows the FHA to better balance its risk and continue to provide access for those borrowers who have historically performed well.
    • This change will be posted in the Federal Register in February and, after a notice and comment period, would go into effect in the early summer.

  3. Reduce allowable seller concessions from 6% to 3%
    • The current level exposes the FHA to excess risk by creating incentives to inflate appraised value. This change will bring FHA into conformity with industry standards on seller concessions.
    • This change will be posted in the Federal Register in February, and after a notice and comment period, would go into effect in the early summer.

  4. Increase enforcement on FHA lenders
    • Publicly report lender performance rankings to complement currently available Neighborhood Watch data - Will be available on the HUD website on February 1.
      • This is an operational change to make information more user-friendly and hold lenders more accountable; it does not require new regulatory action as Neighborhood Watch data is currently publicly available.
    • Enhance monitoring of lender performance and compliance with FHA guidelines and standards.
      • Implement Credit Watch termination through lender underwriting ID in addition to originating ID.
      • This change is included in a Mortgagee Letter to be released tomorrow, January 21st, and is effective immediately.
    • Implement statutory authority through regulation of section 256 of the National Housing Act to enforce indemnification provisions for lenders using delegated insuring process
      • Specifications of this change will be posted in March, and after a notice and comment period, would go into effect in early summer.
    • HUD is pursuing legislative authority to increase enforcement on FHA lenders. Specific authority includes:
      • Amendment of section 256 of the National Housing Act to apply indemnification provisions to all Direct Endorsement lenders. This would require all approved mortgagees to assume liability for all of the loans that they originate and underwrite
      • Legislative authority permitting HUD maximum flexibility to establish separate "areas" for purposes of review and termination under the Credit Watch initiative. This would provide authority to withdraw originating and underwriting approval for a lender nationwide on the basis of the performance of its regional branches

In addition to the changes proposed today, the FHA is continuing to review its overall response to housing market conditions, and continuing to evaluate its mortgage insurance underwriting standards and its measures to help distressed and underwater borrowers through FHA/HAMP and other FHA initiatives going forward.

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MN WI Equal Housing LenderJoe Metzler is a Certified Minnesota Mortgage Specialist, and provides financing for homes in MN and WI only. Visit his main website at www.MinnesotaBestRates.com

 

 

 

0 comments • Joseph Metzler MLO MMS UMB • January 20 2010 10:37AM

Are Pre-Approval Letters Dead? NO, just a minor change in thinking

 

Mortgages Unlimited - Top Mortgage provider in MN and WI. Minneapolis, St Paul

PRE-APPROVAL LETTERS - Can you get or even give one in today's market?

There is a lot of confusion with Lenders, Loan Officers, Home Owners, and Realtors in regards to the sweeping new Good Faith Estimate rules and how they apply to the industry.

A LITTLE PRE-APPROVAL LETTER HISTORY
Years ago, the standard way of buying a home was a potential buyer met with a Real Estate Agent, and wrote a financing contingency into the offer. After the offer was accepted, the potential buyer went searching for financing. Assuming all was well, the buyer got a home loan and closed on the home. Unfortunately, some people didn't qualify, and after a few weeks, the home was put back on the market.

The Pre-Approval Letter was seen as a way to eliminate having the house off the market, and give comfort to both the listing agent and seller that the buyer could actually get a home loan by having their financing reviewed PRIOR to making any offers.

Get a home loan in MN WI Minneapolis St Paul Rochester Duluth Marshall Madison MilwaukeeMany of the original pre-approval letters were written with a maximum approval dollar amount; "Mr. Homebuyer is APPROVED for up to $200,000". While this served the purposed, over time, most pre-approval letters changed from a maximum dollar amount, to the actual property address; "Mr. Homebuyer is approved in an amount significant enough to purchase 123 Main St". This was done to retain the buyers negotiating power. For example the customer can afford a $200,000 home, but is making an offer on a home listed at $190,000 and they are offering $180,000. If the listing agent and seller see an approval letter listed for $200,000 and a purchase agreement saying $180,000 - the sellers had an unfair advantage.

In theory, this sounds like a great industry practice, smart for both buyers and sellers. The pre-approval letter, if done correctly by the Loan Officer is still valid today. Of course a pre-approval letter, is still only as good as the person writing it, and is NOT binding on the lender.

Because some lenders don't do a proper and real pre-approval process, many Real Estate Agents now ask for "Commitment Letters". A Commitment letter is supposed to be issued AFTER a full and complete application has been submitted to underwriting, and should include a review of the appraisal and title. This document is supposed to tell the seller that everything has been finalized with the lender, and they are just waiting for the closing date. Commitment letters are also NOT binding on the lender!

FYI TO REALTORS: Lenders do NOT care or pay any attention for "Commitment Dates" written into purchase agreements.

WHAT HAS CHANGED?
The Good Faith Estimate provided by mortgage companies is NOW BINDING. Without knowing all the property details (purchase price, taxes, seller paid closing costs), the mortgage lender is taking greater risk by providing a BINDING Good Faith Estimate without all the transaction details.

The new rules require lenders have six (6) main items, including PROPERTY ADDRESS, to be mandated to provide the binding Good Faith Estimate.

PRE-APPROVAL LETTERS TODAY
Can you, and should you continue to get a pre-approval letter today? YES. There are no real changes to the basic theory of the pre-approval letter. The difference is that smart Loan Officers will tell Realtors they DON'T WANT TO KNOW THE PROPERTY ADDRESS until AFTER a successful offer has been made!

Once the successful offer has been made, and now knowing all the exact transaction details, the mortgage lender will have three days to provide the buyer with their binding Good Faith Estimate.

IN THE END
All the changes will simply mean that the days of a pre-approval letter WITH A PROPERTY ADDRESS are GONE. They will be replaced by either generic pre-approval letters with no address, or pre-approval letters with a dollar amount. I have instructed the Real Estate Agents I work with when calling for the pre-approval letter to give me the OFFER price only (no address). I will then re-verify the buyers offer price fits within the buyers pre-approval parameters (debt-to-income, loan-to-value, etc), and write a pre-approval letter saying "Mr. Homebuyer is approved for $200,000".Top Mortgage broker in MN WI Minneapolis St Paul

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MN WI Equal Housing LenderJoe Metzler is a Certified Minnesota Mortgage Specialist, and provides financing for homes in MN and WI only. Visit his main website at www.MinnesotaBestRates.com

 

5 comments • Joseph Metzler MLO MMS UMB • January 16 2010 08:51AM

HUD drops 90 day waiting period for financing flipped properties

Mortgages Unlimited - Mortgage Lender / Broker in St Paul Minneapolis Minnesota
HUD TAKES ACTION TO SPEED RESALE OF FORECLOSED PROPERTIES TO NEW OWNERS
Measure to help bring stability to home values and accelerate sale of vacant properties
FHA DROPS 90 DAY WAITING PERIOD FOR FINANCING FLIPPED PROPERTIES
 
WASHINGTON - In an effort to stabilize home values and improve conditions in communities where foreclosure activity is high, HUD Secretary Shaun Donovan today announced a temporary policy that will expand access to FHA mortgage insurance and allow for the quick resale of foreclosed properties. The announcement is part of the Obama administration commitment to addressing foreclosure. Just yesterday, Secretary Donovan announced $2 billion in Neighborhood Stabilization Program grants to local communities and nonprofit housing developers to combat the effects of vacant and abandoned homes.

"As a result of the tightened credit market, FHA-insured mortgage financing is often the only means of financing available to potential homebuyers," said Donovan. "FHA has an unprecedented opportunity to fulfill its mission by helping many homebuyers find affordable housing while contributing to neighborhood stabilization."

With certain exceptions, FHA currently prohibits insuring a mortgage on a home owned by the seller for less than 90 days. This temporary waiver will give FHA borrowers access to a broader array of recently foreclosed properties.

"This change in policy is temporary and will have very strict conditions and guidelines to assure that predatory practices are not allowed," Donovan said.

In today's market, FHA research finds that acquiring, rehabilitating and the reselling these properties to prospective homeowners often takes less than 90 days. Prohibiting the use of FHA mortgage insurance for a subsequent resale within 90 days of acquisition adversely impacts the willingness of sellers to allow contracts from potential FHA buyers because they must consider holding costs and the risk of vandalism associated with allowing a property to sit vacant over a 90-day period of time.

The policy change will permit buyers to use FHA-insured financing to purchase HUD-owned properties, bank-owned properties, or properties resold through private sales. This will allow homes to resell as quickly as possible, helping to stabilize real estate prices and to revitalize neighborhoods and communities.

"FHA borrowers, because of the restrictions we are now lifting, have often been shut out from buying affordable properties," said FHA Commissioner David H. Stevens. "This action will enable our borrowers, especially first-time buyers, to take advantage of this opportunity."

The waiver will take effect on February 1, 2010 and is effective for one year, unless otherwise extended or withdrawn by the FHA Commissioner. To protect FHA borrowers against predatory practices of "flipping" where properties are quickly resold at inflated prices to unsuspecting borrowers, this waiver is limited to those sales meeting the following general conditions:

  • All transactions must be arms-length, with no identity of interest between the buyer and seller or other parties participating in the sales transaction.
  • In cases in which the sales price of the property is 20 percent or more above the seller's acquisition cost, the waiver will only apply if the lender meets specific conditions.
  • The waiver is limited to forward mortgages, and does not apply to the Home Equity Conversion Mortgage (HECM) for purchase program.

Specific conditions and other details of this new temporary policy are in the text of the waiver, available on HUD's website.

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Visit our website for FHA Home Loan Financing in the Minneapolis, St Paul, Duluth, Rochester, Madison, and Milwaukee areas, or all of MN and WI

3 comments • Joseph Metzler MLO MMS UMB • January 15 2010 08:01PM

Lenders couldn't give you a bad loan today if you wanted one!

 

Mortgages Unlimited. Minneapolis St Paul Duluth Rochester Madison Milwaukee

Delivering Value Added Home Loan Solutions in Minnesota Since 1991

651-552-3681

 

Via Elvin Lorenzo (FPF Wholesale):

During the Christmas and New Year's Holiday I got a chance to catch up with a lot of my old friends and family and of course we got to talking about the mortgage and lending industry!  Yes, believe it or not, this is still a very popular topic these days!  : )

We got to talking about horrible loans and the dishonest practice that took place in the past and other not so great experiences that they themselves and their co-workers experienced.  I allowed them to vent and express their thoughts and opinions.  After a good 30 minutes or so of people just taking turns of bashing the lending industry, the Obama Administration and all this bailout hooplah, I told them these magical words that caught everyone's attention:

"In today's lending environment and the many reforms that have taken place in the industry, I couldn't give you a bad loan if I even wanted to!"

This statement opened up a great discussion and informing everyone of how mortgages are done today and why people who are thinking of getting a new home or a new mortgage, should not be so scared. 

Here are a few key reasons why getting a mortgage today is not only safe but to your advantage:

  • You have a choice of vanilla, vanilla and....vanilla!  Would you like vanilla sprinkles with that?  Mortgage Programs today are pretty straight forward - 30 Year Fixed, 15 Year Fixed and a few other terms in between.  There are still a few ARM Programs hanging around but they're definitely not the exotic programs of the previous years and are actually a bit tougher to qualify for in some cases.
  • Interest Rates are still at all time lows!  I really didn't want to use this line because it sounds so generic and "salesy" but I'd be lying if it wasn't true!  Interest rate are still very low.  How long will they last for?  If I knew, I sure as heck wouldn't be doing this for a living! But take advantage of them while they're here!
  • The NEW FORMAT of Disclosing to Consumers.  Folks, with the new disclosures and rules implemented with them, there are no more surprises at closing (and if there are you will know about it and you will be given time to think about it).  Whatever amount of fees are disclosed to you up front (from the very begining), that amount has to stay the same or if it is different you will be given up to 7 days to think about it!
  • Tax Credit for Homebuyers has been extended!  As the media has done a very good job informing everyone of this, the tax credit for homebuyers has been extended - just in time for tax season!!!  Today's homebuyers will not only enjoy the benefits of buying a home at a very low price, enjoy tax benefits of being a homeowner but also have an additional tax credit of $8,000, too! (ask your tax advisor for further details).
  • Implemented Investor and Lender Overlays = Stable, New Generation of Homeowners and Mortgage Industry! Though this can be extremely annoying to the customer and everyone involved in the transaction, the good news in the midst of all the mayhem and scrutiny is that it does 2 things: (1) minimize risk for the lenders and investors which keeps the flow of lending, credit and cash throughout the whole system and (2) If you're able to get through all the scrutiny of underwriting, approvals, re-approvals and hoops required to jump through to obtain a loan - not only do you deserve to have that loan, YOU DESERVE A MEDAL!!!  You're a solid and ideal customer to get a home and chances are, everyone else who got their home about the same time as you are solid and ideal JUST LIKE YOU!  This is a start to what we all hope will be a stable, new generation of homeowners in America!  

Again, for more specific information on your situation, please contact your tax advisor and local real estate and mortgage professional.  Not sure who to contact?  I'd be more than happy to refer you to someone in your area!

 

Be sure to add me on Facebook!!! Search: Elvin @ FPF Wholesale

1 comment • Joseph Metzler MLO MMS UMB • January 08 2010 10:12AM

Almost A Third Of Loan Officers Taking Federally Mandated License Tests Are Failing To Meet The Grade

 

This article ties in nicely with one I wrote back in August 2009.

ARE YOU WORKING WITH THE RIGHT LOAN OFFICER OR MORTGAGE COMPANY?

Joe Metzler is fully licensed to current requirements in both Minnesota and Wisconsin. He is a Certified Minnesota Mortgage Specialist (MMS), Certified upFront Mortgage Broker, Certified Home Ownership Accelerator Specialist. He is also a member of the National Association of Mortgage Brokers (NAMB), and the Minnesota Mortgage Association (MMA).

Learn more about Joe Metzler, and why he is your Loan Officer of choice for all your home purchase or refinance needs in MN and WI

 

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Via John Mulkey, Housing Guru (TheHousingGuru.com):

man with shirt openAccording to an article in the New York Times, almost a third of loan officers taking federally mandated license tests are failing to meet the grade. Consumer confidence in the lending industry, still struggling to regain its footing following the collapse of the housing market, continues to waiver. Many have placed much of the blame for the housing crisis squarely at the feet of unregulated, unqualified, or dishonest lenders; and whether or not the criticisms are fair or accurate seems insignificant to the millions who have suffered foreclosure or lost value as a result the disaster.

 

The exam, a requirement of the Housing and Economic Recovery Act of 2008 and known as S.A.F.E., The Secure and Fair Enforcement for Mortgage Licensing Act, establishes minimum standards for mortgage training and continuing education. Separate from the requirements and testing procedures of each state, the test requires a passing grade of 75%.

 

Following the release of the test results, the National Association of Mortgage Brokers was quick to point out that the fail rate of its members was much less than the national average. Encouraging, perhaps, but not necessarily sufficient to regain the public’s trust.

 

While there are obviously many qualified, honest, and ethical lenders, it would seem that the industry has experienced a loss of confidence similar to that experienced by real estate, and has a public relations challenge if it expects to rebuild its image. Perhaps the lending industry should take a more proactive approach and provide evidence of self-policing and training of its membership. With only 20 hours of pre-licensing education required, 3 of which deal with ethics and consumer protection issues, some have suggested that the industry itself should demand more stringent measures.

 

Additionally, the test isn’t required for those who work for conventional banks, who are regulated by the states in which they operate. As the government works out the kinks in this new testing and regulating system, only time will tell whether or not consumers will benefit or just be burdened by an expanding bureaucracy.

 

The Housing Guru: The one source for all your housing questions

0 comments • Joseph Metzler MLO MMS UMB • January 03 2010 09:37AM

Are Realtors Inept, Stupid & Completely Worthless..?

While this was written about Realtor's, you could easily replace Realtor with Loan Officer. Be sure to read "Mortgage Lender Shopping. How to do it right"

Search Homes For Sale listing in the St Paul, Minneapolis area

Need a Realtor Referral in the Minneapolis, St Paul area? Call us, we'll be happy to give you names of agents we've worked with on hundreds of successful transactions - People we would use on our own deals.

651-705-6261

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Via Greg Nino Houston Texas (RE/MAX West Houston Professionals):

Dear Consumer,

I understand your frustration, disappointment & even your anger about Realtors. You have been let down, lied to, and in some cases stolen from. And I do not feel sorry for most of you.

Let me share this story with you:

I had a computer that was constantly losing memory. It is now with it's 3rd technician. Like you, I know very little about "the industry." In fact, I know nothing about computers except what I've read online. Once in awhile a friend or relative will try to give me advice, but the result is always the same, more frustration. The first COMPUTER TECHNICIAN charged me $250.00 to fix my problem. He told me I had a leaky motherboard and to "throw it away." Unconvinced I took the computer to Best Buy ($150.00) where they simply said they needed to reconfigure my cpu and "wipe it." This would basically delete everything on the hard drive and restore it to day one. Guess what? That didn't work either!!

On the third attempt I dropped it off to yet another technician, referred by fellow Realtor. I was so angry with the entire process that I was determined to get to the source of the problem, no matter the cost..... Finally I was told I had a VIRUS in my BIOS system, whatever the hell that means. My situation was now solved.

I very easily could have said... "all computer technicians are stupid liars looking to STEAL from me," but I did not. To be honest, I'm very, very angry about my experiences, but.... 

---->I have one person to blame for my misery, myself.<-----

I rushed, trusted and didn't do my research when looking for the RIGHT guy to fix my computer. I was stupid, careless and too trustworthy. When I was growing up my parents always warned me to SHOP wisely. They reminded me that only fools make quick impulsive decisions with their money. And they were right.

Now that I've found my trusted computer technician I feel redeemed. If I ever need a computer repair, I'll know who to call. I'll refer him over and over again & even though I'm angry with my past experiences I harbor no ill will towards the industry. I would NEVER consider trying to nickle & dime him as I now know he's worth the money he was paid. I won't rely on my uncle in Nebraska who worked on computers in the 80's as he's "just trying to help."

The moral of the story is simple.

Ask lots and lots of questions before you hire a Realtor. Don't just sign paperwork assuming we are all bred, raised and educated the same. The 80/20 rule applies to our industry as well. I believe you get what you pay for in Real Estate. If you don't do your research than you are asking for potential problems. Learn from other peoples horror stories and not your own.

 

1 comment • Joseph Metzler MLO MMS UMB • December 23 2009 05:07PM

FHA Rules. Eligibility on a New FHA Mortgage when you have a Short Sale or Short pay off

The FHA mortgagee letter described below provides guidance to lenders and underwriters regarding borrower eligibility when a previously owned property was sold for less than what was owed (short sale), or there is principal write down of indebtedness that cannot be refinanced into a new mortgage (short pay off)…

FHA and Short Sales - Mortgagee Letter 09-52
Summary – FHA Guidance on Short Sales Borrowers are not eligible for a new FHA mortgage if they pursued a short sale agreement on his or her principal residence simply to
  1. • take advantage of declining market conditions, and
  2. • purchase, at a reduced price, a similar or superior property within a reasonable commuting distance.

Reference: For detailed information on converting existing principal residences into rental properties, see 4155.1 4.E.4.g
Summary – Guidance on Borrowers current at the time of Short Sale Borrowers are considered eligible for a new FHA-insured mortgage if
  1. • they were current on their mortgage and other installment debts at the time of the short sale of their previously owned property, and
  2. • the proceeds from the short sale serve as payment in full.

Reference: For detailed information, see "Short Sales" at 4155.1 4.C.2.l.
Summary – Guidance on Borrowers in default at the time of Short Sale Borrowers in default on their mortgage at the time of the short sale (or pre-foreclosure sale) are not eligible for a new FHA-insured mortgage for three years from the date of the pre-foreclosure sale. Lenders may make exceptions to this rule under certain circumstances.

Reference: For detailed information, see "Short Sales", at 4155.1 4.C.2.l.
Summary – Refinancing with Short Pay Off FHA will insure the first mortgage where the existing note holder(s) write off the amount of indebtedness that cannot be refinanced into the new mortgage due to a decline in property value and/or a reduction in income.

Reference: For detailed information, see "Short Pay Offs", at 4155.1 3.B.1.f.

 

Mortgages Unlimited is a Full Eagle FHA lender for properties in MN and WI

Click here to APPLY Online for you MN or WI FHA Home Mortgage Loan

 

3 comments • Joseph Metzler MLO MMS UMB • December 17 2009 04:53PM

Trade up your house. 6 reasons why now is the best time

6 Reasons to TRADE UP your house TODAY!

Have you thought about getting that bigger, better house in a better neighborhood?  

NOW IS THE TIME!

St Paul, MN: Whether you need more space, want to upgrade your location, or for any other reason, the current real estate market presents a unique opportunity to capitalize by trading up! 

1) You will make money NOW on the trade!  

Here's how this works. You currently own a house that was worth $300,000 three years ago, and now it's worth $210,000 (yikes... down 30%...).  

You may be thinking, I've lost $90,000, I'm NOT selling... right?  Wrong!  

What you do is go out and sell your old home and purchase the new home of your dreams for $450,000.  That house, three years ago, was worth $750,000 and you probably couldn't have afforded it.  By buying it now, what you've just done is bought your new home at a $250,000 discount!  Just like that, on the trade, you've MADE $160,000!  This doesn't even take into account the money you'll save on property taxes because you're paying taxes on a $450,000 house, and not on a $750,000 house.

2) AND you will make money LATER when you sell your new home!

OK you've listened to my advice, bought that new home of your dreams and traded up. YES!  Fast forward five years and the real estate market has gone up 20%.  Let's take a look at what hSearch Homes For Sale in Minneapolisas happened.  Your old house is now worth $250,000, for a $50K gain over today's value.  Your new home is worth $540,000, or $90,000 more than when you bought it today.  Just like that, you've made another extra $40,000 on the trade!

3) You can likely buy a house you otherwise could not have afforded, and may not be able to afford again!

Going back to my example above, you probably couldn't have afforded that $750,000 house three years ago when you bought your old house.  You also may not be able to afford it again in 3 - 5 years when the market rebounds. If you've been dreaming about a bigger home or one in a nicer area, now is really the time to capitalize.

4) It's much easier to trade up in a down market than in an escalating market!

Many people say that they will trade up when the market "goes back up."  Let's take a close look at that.  Let's say that 5 years from now, the market is back up 20% from today's values.  You then sell your current home for $252,000 and your dream home is now worth $540,000.  You've gained $40K on your current home (from today's values) BUT your dream home is now worth $90,000 more!  That means that, by waiting, you've now spent an extra $50K to buy that house, plus you lived in the OLD smaller house 5-years longer than necessary.

5) You'll probably get a better house by trading up in a down market!

The current market presents some very unique opportunities.  In most areas, inventory is pretty high and buyers have a lot of great choices.  By shopping in this market, you can really get the home of your dreams and take your pick of all the inventory available.  In most cases, you can get a good deal on a great property in a terrific area.

6) $6500 tax credit for move up buyers!

Take advantage of this special offer from Washington. If you've owned your existing home at least 5-years, you can move up and take advantage of free money! Learn more about the $6500 Tax Credit with Mortgages Unlimited

The bottom line is that if you can afford it, now is a terrific time to upgrade!  Interest rates remain at historic lows and there is plenty of financing available.

Start your Search Home For Sale in Minnesota Today

Check Mortgage Rates in Minnesota

1 comment • Joseph Metzler MLO MMS UMB • December 16 2009 07:39AM

Choosing your loan with "APR" CAN COST YOU MONEY

Mortgages Unlimited - Mortgage Lender / Broker in St Paul Minneapolis Minnesota

Choosing your mortgage loan with "APR" CAN COST YOU MONEY

Minneapolis, MN: A borrower shopping for the best mortgage rate can easily be seduced by low rate offers that are accompanied by low annual percentage rates (APR). Federal law requires that APR be disclosed along side the actual interest rate as a means to help borrowers make a more informed decision on their mortgage.

The truth is that APR is a very poor way to comparison shop for a mortgage and can cause borrowers to make costly decisions. APR was created to provide a way for borrowers to account for costs associated with the mortgage. This sounds good because it may not be very easy to choose between a loan with a lower rate and higher fees or a loan at a higher rate with low fees.

The problem is that the APR calculation is based on bad assumptions. First, APR assumes zero inflation and that the value or buying power of a dollar today will be exactly equal to the value of a dollar 10, 20, or even 30 years from now. Next, the APR calculation assumes that the mortgage will never be pre-paid or paid. That means no refinancing or selling the home, which is highly unlikely since the average life of a home mortgage loan is less than four years. Just think about your own loans: Is it rare to see the same loan in place for even five years-forget 30 years?

The APR calculation does not consider the value of the money used for fees. So if you spent thousands of dollars in points or fees to get a lower rate, the APR calculation does not give any value to the money if it wasn't spent on closing costs. Finally, APR does not take tax consequences into consideration. This can be significant, since higher fees on the mortgage may not be deductible, while the higher interest rate typically is deductible. Moreover, APR can be easily manipulated by bad lenders, making it totally worthless.

How does APR work?Make valid comparisons
APR basically takes the base interest rates, calculates closing costs, and gives you a number. Technically, the lower the number, the better the deal. If two lender quote you the exact same (base) rate, the lender with the lower APR is supposed to be a better deal. If the lenders are playing fair, this works well in giving you accurate information.

If the two lenders are quoting different (base) rates, then the APR calculation is totally misleading. Make sure you are doing CORRECT Apples-to-Apples comparisons.

Furthermore, the APR calculation only keeps the monthly payment information the same. Instead of the mortgage amount, APR uses "amount financed." This is the "amount financed" information on the Truth in Lending statement. Amount financed takes into consideration the fees that are lender imposed, such as application fees, points, commitment fees, and interim or per diem interest. So, amount financed is the mortgage amount less any lender fees, points, and interim interest. The more fees, the lower the amount financed. The monthly payment is then calculated as a product of the amount financed to give you the annual percentage rate or APR. So, the lower the amount financed, the higher the APR is. Amount financed can be manipulated by assuming a closing on the last day instead of the first day of the month. That would increase the amount financed and decrease the APR.

Here is a real example on a $150,000 fixed rate 30-year mortgage with zero points: Lender A is offering a great low rate of 5.875 percent and Lender B is offering a higher rate of 6.125 percent.

Let's look at the real story. The payment difference between the two is $24 per month. So is it worth paying $3,000 in fees to Lender A in order to save $24 per month? Hardly. It will take over 10 years for a borrower just to get back his investment; a bad choice when you consider that mortgage loans are typically retired within four to five years. To make the decision to go with Lender A even worse, if that's possible, borrowers rarely take the value of to day's dollars into account.

Rather than giving Lender A your hard-earned $3,000, you should give it to yourself. Reduce the loan balance on your mortgage by the fees you are saving. In the example given, that would reduce the loan from $150,000 to $147,000. This makes the payment difference just $6 per month instead of $24 per month! The true time to break even is really 500 months (more than 40 years). So it is impossible to benefit from the higher fee program from Lender A, because the maximum period on the loan is 30 years or 360 months. One more thing: when you calculate your tax deduction on the payment difference, it makes even more sense to avoid paying higher non-deductible fees. The obvious correct choice is to go with Lender B, even though the APR is lower with Lender A.

The bottom line is that you should forget the APR and think twice about those advertised low rates when they are accompanied by higher fees.

 

 

Joe Metzler is a certificed Minnesota Mortgage Specialist with Mortgages Unlimited, St Paul, Minnesota.

1 comment • Joseph Metzler MLO MMS UMB • December 10 2009 12:02PM