First Time Home Buyer Radio!
With the regular hosts of The Minnesota Real Estate Show on vacation this weekend (actually they’re at a Re/Max Convention) I will be playing “co-host” this Saturday, March 6th 2010.
Among the topics we’ll be covering are the First Time Buyer Tax Credit expiration, and how to make offers on REO/Bank-owned Foreclosure properties.
The MN Real Estate Show is on at 11:00am on KTLK 100.3 fm. If you have any questions please call in!
First Time Home Buyer Class – Shoreview March 25, 2010
| March 25, 2010 | ||
| 6:30 pm | to | 8:00 pm |
| 6:30 pm | to | 8:00 pm |
*REGISTER HERE*
We’ve gotten a number of emails asking “when will you have a home buyer class in the Northern Metro area?” Well, your request has been granted!
We will be holding a First Time Buyer Classes up north, so you don’t have to travel across town if you live in the upper part of the Twin Cities. See below for full details.
Join us for a very informative 90 minute home-buying course where you will learn everything you need to know about buying your first home. We’ll show you the importance of getting Pre-Approved for a Loan, how to Search for Properties Online, and how to become an Expert Negotiator in the process.
This is not a “Sell-a-thon” like some other seminars on home-buying. It’s totally free, we have no products to sell you, and there are no documents to sign. We’re all about educating buyers in order to help you with the biggest financial decision of your life. If you’re a fan of a low-pressure and laid-back atmosphere, you’ll feel right at home.
Our three presenters - Steve Howe, Tony D’Agostino and Darcy McDonald - have teamed up to give you the full spectrum of buying your first house in the Buyer’s Market today. Learn how getting the right loan can save you Thousands of dollars a year.
Some of the topics we will cover include:
- First Time Home Buyer Tax Credit
- Credit Score Ratings
- Down Payments and Loan Qualification
- Special Mortgage Programs for First Time Buyers
- Writing and Negotiating Offers
- Closing Process
- and Much More
If you are thinking about buying a home in the next 2 years we would love to answer your questions and help you make a solid home purchase, without paying too much. Anyone in the Minneapolis St. Paul area of MN should come on down to one of our monthly seminars.
Here’s the info:
- What - First Time Home Buyer Class
- Where - Shoreview Community Center; 4580 Victoria St N, Shoreview; Room #203
- When - Thursday March 25th, 6:30-8:00pm
Space is limited so please REGISTER HERE.
60 Days Left For 2010 HomeBuyer Tax Credits
That’s right folks – there’s only 2 months left for you to find a house, make an offer, and get an accepted purchase agreement. For the complete list of requirements on the 2010 Home Buyer Tax Credit click here.
For those first time homebuyers who think they have plenty of time to get the deal done, here’s a quick breakdown of how much time the process may take for you.
Step 1
Meet with a Mortgage Officer and get pre-approved for a loan. This includes gathering your financial documents, pay-stubs, account statements, and tax returns in order to verify you can afford your monthly mortgage payments. This can take anywhere from 1-7 days.
Step 2
Meet with a Real Estate Agent and setup a search for properties on the MLS. This includes figuring out where you want to live, what type of house you want, and what exactly you need (and want) in the house itself. This can take anywhere from 1-5 days.
Step 3
Search for properties by taking tours of homes in person. This part of the process depends on how much time you can devote to house-hunting. Most people have full-time jobs during the day which severely limits the amount of time they can look for homes. Because of this fact, this can be the longest step in the process, taking anywhere from 1 week to 3 months.
Step 4
Make an offer on the home of your choice, and negotiate acceptable terms for both the buyer and seller. This is a shorter step, but is very crucial. This step basically decides how much money is paid and received for each side, and because of this fact you need to pay extra special attention to these negotiations. This process can take anywhere from 1 to 7 days.
April 30th is the last date you can have an accepted offer in order to be eligible for the 8 Thousand Dollar Tax Credit. You then have 2 months to close on the property (June 30th) and can file for your Tax Credit after closing with your tax preparer.
If you need to start the process right now, contact me immediately and I can help you begin!
Taking The First Step Towards Home Ownership
For most First Time Home Buyers, it’s scary to take the plunge into home-ownership. A lot of new buyers in mn don’t know where to begin, and aren’t sure they’re ready for the work ahead.
To help you, we’ve put together a great First Time Home Buyer Class to help educate you on the process and what things to do (and NOT to do) along the way. After you’re educated, it’s time to take the first real step which is getting pre-approved for a mortgage.
My good friend Darcy McDonald wrote a great article which I wanted to share with you about taking the first step. Head over to her First Time Home Buyer Loan blog to check it out.
Housing Inventory for First Time Home Buyers
Two statistics we use to analyze the Twin Cities Housing Market are “Inventory of Homes for Sale” and “Monthly Supply of Inventory”. These typically help sellers determine what a realistic timeframe is for the listing and eventual selling of their home because it gives them a sense of the number of homes on the market and how long it will take for those homes to be sold.
Buyers can also use these statistics to help them determine what kind of competition they have for purchasing homes. By looking at the # of homes available in a certain price range and also what the estimated monthly supply of those homes are, buyers can see if they have a lot of homes available to purchase and how fast those properties might disappear to other buyers.
Since we’re in February 2010 I thought I’d share the latest numbers with you so you can see that in the First Time Home Buyer price range we are seeing a shortage of homes available. For our purposes we’ll stay below $150,000 since the majority of 1st time homebuyers will be buying a home in this range. We’ll also limit the numbers to single-family detached homes (which excludes townhouses and condos).
Inventory of Homes for Sale
- Feb 2009 – 4,234
- Feb 2010 – 2,869
(drop of 32%)
Monthly Supply of Inventory
- Feb 2009 – 6.2 months
- Feb 2010 – 2.95 months
(drop of 52%)
So what does all this mean? Basically the numbers of homes available for first time home-buyers is shrinking. This is happening for a couple of reasons. First Time Buyers, along with investors, are looking for cheaper properties. So the inventory is being bought up by a few different groups of people. Banks are also limiting the number of vacant foreclosed houses they allow to be put up for sale, to control the supply/demand ratio and create bidding wars when they list new properties.
After the April/June Tax Credit deadline, I personally anticipate there to be less demand for homes, which will hopefully make it a bit easier for buyers to purchase their first property in these lower price ranges. There are also statistics that suggest another wave of foreclosures may be coming in the next year or two, due to Adjustable Rate Mortgages increasing their interest rates which will make the payments too high for their home owners.
We’ll have to wait and see what happens with those. But for now, we know there are less homes available and more demand out there for first time buyers.
(All numbers are via the Minneapolis Area Association of Realtors)
February 2010 Monthly Skinny
Here’s another snapshot of the Minneapolis and St. Paul area housing market, courtesy of the Minneapolis Area Associattion of Realtors.
They call it the “Monthly Skinny” report.
(note: I suggest pausing on each slide to fully read the numbers displayed)
First Time Home Buyer Class – March 18, 2010
| March 18, 2010 | ||
| 6:30 pm | to | 8:00 pm |
*REGISTER HERE*
So you want to buy a house – now what?! Well, the first step towards home ownership is getting educated about the process and finding a Team of Professionals you can trust and feel comfortable with.
That’s where we come in. Join us for a very informative 90 minute home-buying course where you will learn everything you need to know about buying your first home. We’ll show you the importance of getting Pre-Approved for a Loan, how to Search for Properties Online, and how to become an Expert Negotiator in the process.
This is not a “Sell-a-thon” like some other seminars on home-buying. It’s totally free, we have no products to sell you, and there are no documents to sign. We’re all about educating buyers in order to help you with the biggest financial decision of your life. If you’re a fan of a low-pressure and laid-back atmosphere, you’ll feel right at home.
Our two presenters - Steve Howe and Darcy McDonald - have teamed up to give you the full spectrum of buying your first house in the Buyer’s Market today. Learn how getting the right loan can save you Thousands of dollars a year.
Some of the topics we will cover include:
- First Time Home Buyer Tax Credit
- Credit Score Ratings
- Down Payments and Loan Qualification
- Special Mortgage Programs for First Time Buyers
- Writing and Negotiating Offers
- Closing Process
- and Much More
If you are thinking about buying a home in the next 2 years we would love to answer your questions and help you make a solid home purchase, without paying too much. Anyone in the Minneapolis St. Paul area of MN should come on down to one of our monthly seminars.
Here’s the info:
- What - First Time Home Buyer Class
- Where - Cornerstone Mortgage; 436 Gateway Blvd, Burnsville, MN
- When - Thursday March 18th, 6:30-8:00pm
Future Dates in 2010 are: Apr 15, May 20, Jun 17, Jul 15, Aug 19, Sep 16, Oct 21, Nov 18, Dec 16
Space is limited so please REGISTER HERE.
Big FHA Mortgage Changes Coming
You may have heard that the Federal Housing Administration (FHA) is changing some key things in their loan insurance package.
For those that don’t know, FHA mortgages are loans that are insured (not originated or funded) by the FHA. They offer 3.5% down payment and competitive interest rates.
Well, a TON of people are using these loans to buy their owner-occupied properties, especially first time home buyers in mn.
FHA is planning a few changes however. Sometime this Spring they will switch their up-front Mortgage Insurance Premium from 1.75% to 2.25%. That’s only a half percent, but it’s another small chunk of money for new homeowners to think about.
FHA is also requiring that buyers have a minimum FICO credit score of 580 in order to qualify for the 3.5% down payment amount. This is really a non-factor because most banks are requiring at least a 620 Credit Score to fund the loan. If you have a somewhat lower credit score, chances are you may not be in a position to be taking out a huge loan for a property anyway.
The biggest change FHA is instituting is lowering the maximum seller paid closing costs from 6% down to 3%. Essentially for a $100,000 house this means the most a seller could legally give the buyer for closing costs and pre-paid items goes from $6,000 to $3,000. This is a big disadvantage for buyers trying to buy a property without a good amount of money saved in the bank. It does guard against artificially inflating the property’s value, simply to roll the closing costs into loan (this is the only legal way to do this right now).
So what’s the big deal? These changes are basically a “tightening” of the rules by the FHA in order to protect themselves from insuring loans to buyers who may be getting in over their heads. The 6% Closing Cost Contribution allowance has been a life-saver for a lot of 1st time home buyers who are purchasing a lower priced home and can afford the down payment, but not all of the closing costs. The new 3% limit brings FHA and Conventional Mortgage standards to the same amount for this term of the contract.
Some of these changes will be made in April 2010. Others will be later in the Spring/Summer of 2010. Keep checking back for the latest news on the FHA loan program.
First Time Home Buyer No-No’s
Ok, I know you’re thinking this is elementary school language, but sometimes in the home buying process you need to take a step back and remember some very important items.
I wanted to share this article written by Darcy McDonald, a mortgage officer with Cornerstone Mortgage–she is my First Time Home Buyer partner and she has some great tips on What NOT to do While Getting a Home Loan. (click here)
Monthly Market Update
I like to watch these short videos that are made by the Minneapolis Area Association of Realtors, and thought I’d share it with you. They call it the “monthly skinny” which is a good name for it since it’s nice and compact.
There is a TON of good information on where we are as a Twin Cities Housing Market, so I recommend pausing the video on every slide with numbers so you can fully digest the data. It says a lot about why there are more and more multiple offer situations and why prices have finally stabilized in the area. There is also some good info on first time buyers making a strong push to balance the market.
