Minnetonka Mortgage News

 

With September 11th coming up this Sunday I wanted to reach out to my past clients, current clients, family, and friends to let them know where some local events are occurring. Now I know that I didn't find every event but hopefully this provides you with some information!

 

• A big crowd is expected this Sunday in Eden Prairie to commemorate the 10th anniversary of September 11th. The event will take place between 12 to 4:30 p.m. at Grace Church 9301 Eden Prairie Road in Eden Prairie. The event is going to hold a memorial ceremony from 3:00 p.m.-4:30 p.m.and a public safety display. This event is free and welcomes everyone.

• Town Green Bandshell at 7991 Main Street in Maple Grove is holding concert in remembrance of 9/11. The event is expected to be a hit with many performers, Robert Robinson, Mary Jane Alm, Jan Hendrickson, Lord of Life Brass and Canticle Choir, and Voices for Peace Choir.

• Minneapolis City Hall will be holding a public ceremony to remember the victims of 9/11 this Sunday.The Minneapolis Police Department will also be having a remembrance service at 8:30 a.m. on the Fourth Street side of the building.

• People residing in Washington County are being asked to take one minute of silence at noon Sunday in memory of the victims

If you applied for a loan several years ago then you probably received a very different experience then you would today. Applicants often were approved for loan amounts higher than they were even interested in, and loans higher than they could really afford. In the past few years mortgage lender have tightened up significantly and have become extremely picky about who they will lend to and how much they will lend. This is simply because there has become more concern about borrowers not being able to pay back the loan. As an applicant this becomes more of a problem when you are trying to achieve the best possible loan. However, luckily for you (the applicant) there is a lot you can do!

•1. Credit Score: The first thing you need to make sure of is that your credit score is good. In order to achieve the best possible interest rates your credit score needs to be pretty good. I suggest that if you are thinking about applying for a mortgage then check your credit score a couple months ahead of time to make sure there aren't any mistakes being reported. If there are mistakes it can take a while to fix. Also make sure you aren't taking on more credit during the time of the application. When going through the application you want to make sure to make payments on time, try to keep you balance below 30%, and don't go out and make any big purchases.

•2. Savings Account: Mortgage Companies want to see that you as the applicant will have enough money in your savings for the down payments, upfront fees, and a couple of months worth of mortgage payments just in case something happens where you might not receive a paycheck. Basically the lender needs to know that incase of an emergency you will still be able to pay back your loans.

•3. Loan Amount: When applying for a mortgage there are certain guidelines that lenders follow. Mortgage Payments can't be more than 29% of a borrowers income and that overall debt payments including credit card debt, school loans, etc, can't be more than 41%. With that being said it is very important to apply for an appropriate loan amount. Mortgage Officers will be happy to go over these figures in detail with you to find an appropriate amount.

•4. Availability and Requests: During the process there is going to be a lot of paperwork needed. If you want this process to go smoothly and efficiently than you need to make yourself available and be willing to present the requested documents quickly, we strongly recommend that you start gathering documents ahead of time. This includes bank statements, W-2s, and paystubs. There are other forms needed for certain situations, which the mortgage officer would request.

When it comes to first time home buyers something I hear a lot is….. What is Mortgage Insurance and why do I need it. The answer is very simple. It is there to protect lenders against losses that could occur if you were to default. This is not homeowners insurance! Homeowners insurance is there to protect you against a loss to personal property.

How To Pay FHA Mortgage Insurance?

When it comes to an FHA loan there are two ways to pay for your Mortgage Insurance, either upfront or monthly. Mortgage Insurance is required for all loans with less than 20% equity. Contact a me for more information on that.

The Benefits?

FHA Mortgage Insurance allows people to purchase a home with less than 20% down. If mortgage insurance didn’t exist lenders wouldn’t be willing to loan you the money. However, with FHA Mortgage Insurance there is a minimum down payment which is currently 3.5% of the purchase price.

Is there a downside?

The main problem with FHA Mortgage Insurance is it can add a significant amount of to your monthly payments... However FHA mortgage insurance is not based on your credit score or other factors like Private Mortgage Insurance, FHA Mortgage Insurance is a set percentage. That means FHA Mortgage Insurance can save you money when you compare the two.

I don't know if you have noticed lately but rates are pretty low right now, record breaking lows for 2011.  With that being said you think we would see a pretty big increase in the mortgage and real estate industry... Well, I'm still waiting for the big rush.

With rates this good it would only make sense that people would want to be refinancing and buying homes. After all it is a buyer's market right.. There is obviously some factors that are making people not want to refinance or buy. What are these factors?

•1.      Credit Score: With a tough economy a lot of people are struggling to keep their good credit score. To take advantage of the best rates your credit score is essential. If people are struggling to pay their bills, their credit score could be taking a hit.

•2.      Down Payments: People might not have enough money to make a big down payment. I know that there are many programs out there that require a very minimal down payment, most popular is the FHA Loan, however the best programs with the best rates want a decent down payment.

•3.      Home Equity: With housing prices dropping many people are finding themselves owing more money than there house is worth, making refinancing extremely tough. Many people are having to wait till they pay more money off their loan before they can refinance.

•4.      Fear: With an uncertain economy many people don't want to spend their savings on a new home or the refinancing fees.

These are just a few reasons I have thought of. Obviously everyone has a different situation and a different solution. Yes I want my customers to be able to take advantage of these rates but at the same time if it doesn't make sense for them to do it I am not going to push them into a situation that will not work.

Thanks