Archive for October, 2014

Fairway now offers a new program for purchase renovation or current home remodeling. – by Barb Crea

October 24th, 2014
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The Fannie Mae HomeStyle Renovation Loan can help your buyers purchase a property AND repair or remodel it – all in one loan with as little as 5% down and at an attractive interest rate.  Help them make that not so perfect house in that perfect location their dream home! Many homes on the market these days are in need of major updating and/or repair.  Building a new home isn’t always an option, in part due to the lack of available vacant lots in the right location that have access to quality schools, shopping, and entertaining activities.  Buying an existing home and fixing it up may be just the answer for your client.

The HomeStyle Renovation Loan is a single-close loan that enables borrowers to purchase a home that needs repairs, or refinance the mortgage on their existing home and include the necessary funds for renovation in the loan balance.  Both structural and non-structural repairs and improvements are allowed.  Tear-downs are not allowed –the existing foundation CANNOT be removed; however, additions to the foundation are allowed.

Property Eligibility – one- to four-unit principal residence, one-unit second homes, or one-unit investor properties including units in condos and PUDS.

The loan amount is based on the “as-completed” value of the home rather than the present value. This is a conventional loan with a maximum loan amount of $417,000.

Renovation costs are limited to 50% of the “as completed” appraised value of the home. This means a home currently valued at $200,000 with a buyer or homeowner wanting $100,000 worth of repairs and upgrades could be a realistic scenario.

Typically, any type of renovation or repair is eligible as long as it’s permanently affixed to the property and adds value. Read the rest of this entry »

It is important for buyers to use an experienced real estate professional… by Randy Cullen

October 17th, 2014
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The Fall Edition of the Buyers Guide has been published by Keeping Current Matters. This guide outlines reasons why buyers should be out now to purchase a home, and it also stresses the importance of using a Real Estate professional in the transaction.

The cost of a home is determined by two major components: the price of the home and the mortgage rate – both appear to be on the rise.  A buyer will always be looking for the most value for the money and a mortgage payment that does not make them feel house poor.  A recent Home Price Expectation Survey of a nationwide panel of housing experts projected a cumulative appreciation in home values of almost 19.5% by 2018.  According to Freddie Mac, mortgage interest rates are projected to rise up to a full percentage point by the end of 2015. Both of these should help push a potential buyer off the fence. Right now these rate projections could seem a little farfetched, since over the past week we have seen them decline as global economic concerns and fear sent the stock market into a sell off.   Money moved to a safe haven and gave the bond market a boost.  Interest rates are reaching lows last seen in March of 2013. There will always be opportunities to take advantage of dips in the market, but our low rate environment will not stay around forever.

The positive side of low rates and current home prices puts our current affordability index at a 186.  This means that the median household income in our area is 86 percent greater than what’s necessary to qualify for a median priced home.  Buyers have more to choose from than at any point since mid-2012. Read the rest of this entry »

Foot Traffic (indicator of future sales) has picked up the last couple of months, indicating a strong fall and a good winter – by Barb Crea

October 10th, 2014
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This weekend is shaping up to be spectacular between the weather and the beautiful fall colors.  The Twin Cities area is at about 50-75% of its peak according to the DNR http://www.dnr.state.mn.us/fall_colors/index.html. Along with the fall colors peaking, according to SentriLock, LLC who provides data to NAR Research, so is real estate foot traffic which has a strong correlation with future contracts and home sales.

Foot Traffic (indicator of future sales) has picked up the last couple of months, indicating a strong fall and a good winter – perhaps the best winter in the last decade according to Steve Harney of Keeping Current Matters (KCM).  Do you have sellers on the fence?  KCM has a GREAT colorful chart you can handout or email to your clients illustrating the foot traffic from October 2013 – February 2014 and the dramatic fall-off in December, January, and February.  Contact my Assistant Andrea, at andrear@fairwaymc.com or (952) 851-8977, for a pdf of the chart.  The real estate market has recovered well from the slow start we experienced, due in part to the inclement weather, at the beginning of 2014.  With those winter months right around the corner, let your sellers know that NOW is the best time to get the best price.

New Form of Competition Sellers Need to Be Aware of…

For the last several years, home sellers had to compete with huge inventories of distressed properties (foreclosures and short sales).  While the impact of substantially discounted competition has disappeared, there is a new form of competition hitting the market – newly constructed homes.  “This jump in sales activity is in line with our latest surveys, which indicate builders are seeing increased traffic and more serious buyers in the market for single-family homes,” said Kevin Kelly, chairman of the NAHB. Read the rest of this entry »

We want your mortgage experience to be something you will remember because of the quality of our work – by Randy Cullen

October 3rd, 2014
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The reality of our new normal in the mortgage industry was all over the news today with the article containing the name Ben Bernanke and No Refinance for You! It’s like something out of the Seinfeld Days and “No Soup for You.”  That episode went to great lengths to exaggerate a situation where the store owner’s strict rules lead to the customer being turned away without being served.  The situation is not dissimilar to our mortgage process today.  The tightening of credit standards has eliminated all alternative products that were previously available for credit worthy applicants.  We now operate from a very strict rule book that does not provide much flexibility.  Rules keep balance, but too many rules tip the scale.

I am not suggesting a return to the Wild Wild West days when exotic mortgage programs were all the rage, and if you could fog a mirror you could get a mortgage; but I do think common sense needs to be applied to reduce or eliminate some obstacles that get in the way.  The former Chair of the Federal Reserve should prove to be a good risk, don’t you think?  Like Bernanke, there are many professionals out there that are an excellent credit risk, but may not currently qualify because of a change in their pay structure.

In the mortgage business we are all about serving and making the dream of homeownership possible.  We are the conduit between the dream and the reality, achieving a successful closing that puts a client into a home or puts a current homeowner into a new mortgage that will make their financial picture brighter. Read the rest of this entry »