Mortgage and Real Estate Blog


Owning more affordable than renting

Minneapolis, MN:  The debate continues.  Is owning a home more affordable than renting.  New data is in showing that for most people, yes, owning appears to be cheaper than renting.

A survey by the big online company that starts with a Z and rhymes with Willow (I'm not a fan, so I don't like to use their name) found on average, Americans spend about 15% of their income on a home mortgage loan, while renters that live in the nation’s largest cities spend around  30% of their income on just their rent.

Conventional wisdom says housing debt of 30% of your income or less is deemed affordable.

The report also looked at other issues effecting homeownership, and found that, just like in the past, coming up with down payment is a challenge for many, and that 13% of home buyers in 2014 got their down payment as a gift from relatives. Few are aware that most buyers DO NOT need a 20% downpayment.  Conventional loan programs allow for as little as 3% down payment, and the popular FHA home loan only requires 3.5% down payment. If you are US Military, a VA loan is a no down payment loan. If you are looking to buy in rural areas of the country, the USDA Rural Development loan is also a no down payment loan.

Many areas and potential home buyers also qualify for First Time Home Buyer programs, like the Minnesota Housing Finance Agency Start Up program, here in MInnesota where I am, that will typically loan the new homeowner a big chunck of their down payment money. The program here only requires the buyer to have $1,000 of their own money to buy a home.

Sadly, many renters THINK they can't afford a home, when statistics tend to prove otherwise. Between small down payment requirements, gifts from relatives, down payment assistance programs, and even taking money from your 401k program foe down payment, most people CAN make homeownership work.

Another challenge is debt.  Many talk about student loan debt killing home buying for millennials.  As a Loan Officer, I simply don't see it.  What I DO see is first time home buyers needing to get back to reality in their home purchase. The term starter home needs to return to the lexicon of home buyers.

Your first home needs to fit into the reality of your income and debts. Therefore, your first home may not be your dream home.

Credit is the final challenge.  If you pay your bills on time, you should be just fine.  If you don't, you need to get that corrected first. Realistically, you need to have a middle credit score of 620 or higher. If you have poor credit, you will need to work on improving your credit first. There are NO bad credit loans available.



All mortgage loan applicants need to meet some basic requirements:

- OK or better credit history.
- Stable employment
- Buy a home you can safely afford (known as debt ratios)
- Have some money in the bank

If you are realy, contact a local mortgage broker in your area.  Give them a complete mortgage application, and let them zero in on what programs you qualify for, how much house you can afford, what the payments will look like, and how much money you will need to pull it all together.


If it all looks good, you'll be put in contact with a local expert Real Estate Agent, who will help you select that perfect home.

Comment balloon 1 commentJoseph Metzler • November 25 2015 07:58AM
Owning more affordable than renting
Minneapolis, MN: The debate continues. Is owning a home more affordable than renting. New data is in showing that for most people, yes, owning appears to be cheaper than renting. A survey by the big online company that starts with a Z and rhymes… more
Down Payment assistance in Minneapolis, MN
Minneapolis Down Payment Assistance Own Your own Home! The City of Minneapolis, in partnership with Minnesota Housing, the Minnesota Homeownership Center, and Mortgage lenders like us here at Mortgages Unlimited are getting together to provide… more
Millennials, YES YOU CAN buy a home!
Millennials can, and still want to buy homes. While it is true the American dream of home ownership is harder to achieve than in the past, it isn't impossible. Young adults, more than ever in the past may be delaying home ownership because of… more
Free Job Loss Mortgage Payment Protection - get buyers off the fence
Lets face it, buying a home is scary. Especially for first time home buyers. One of the big fears is job loss, and inability to make their mortgage payment if they lose their job. When looking at foreclosure statistics, many of the people who had a… more
The Importance Of Full Lender Pre-Approval
The Importance Of Full Lender Pre-Approval Minneapolis, MN: Initial mortgage loan pre-qualification and full lender pre-approval are two of the most important steps you can take towards owning a new home. In most areas, Real Estate Agents either… more
Getting an FHA Loan? Guidelines for required repairs
Common Work Orders and Repairs Required When Getting An FHA Loan | FHA Loans | FHA after a Short Sale or foreclosure | FHA 203(k) Fix Up Loan | FHA streamline Refinance | FHA LOAN LIMIT Lookup Tool | When obtaining an FHA home loan, not only does… more
What changes mortgage rates?
Minneapolis, MN: Many people believe that if you call around to enough lenders, that you will find someone offering a great deal. The reality is that it doesn't really work that way. We generally say that if you call around to enough lenders, all… more
MN Loan Officer is Top 100
Mortgages Unlimited’s Loan Officer Joe Metzler, out of their St. Paul, MN Office, has been recognized as one of the Top 100 Loan Officers in the Nation by Origination News, coming in at number 98. Read the list at http://tinyurl. com/ljqqkbj.. more
Why your credit score is not your credit score??
Why your credit score is not your credit score?? Minneapolis, MN: Everyday talking to clients, they tell me they know what their credit score is. Everyday I tell them they are correct, but yet they are wrong for my new mortgage loan purposes… more
FHA loan market share shrinking
The Federal Housing Administration ( FHA Loans ) saw its share of the mortgage insurance market soar to 72 percent of all insured mortgages issued in 2008, and to just 25% of the total origination market in 2009 as other lenders pulled back and FHA… more