Archive for January, 2016

The FHA 203K loan could be the product of choice for your home renovation! – by Randy Cullen

January 29th, 2016
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fha-203k-loansFairway Independent Mortgage Corporation and the Kate Wilson Mortgage Team offer the Full FHA 203K program! Adding this product to our comprehensive list of construction financing options gives our borrowers additional flexibility. Our Bloomington Branch has seasoned professionals, and all of us are well versed in construction lending.

Construction and home improvement financing can take many forms. Many of our clients are building a new home on a vacant lot, tearing down an existing structure to build a new home, or doing a complete remodel of their primary residence. These projects are best done with our conventional Construction to Permanent financing options. Most of these projects would fall outside the scope that the FHA programs allow, limited by the maximum allowable mortgage amount in our metro area of $326,600, and $271,050 for the rest of Minnesota.  But what about those projects that will work perfectly with the FHA suite of products? Below are some reasons the FHA 203K loan could be the product of choice.

The FHA Streamline 203K product allows for non-structural repairs to a home being purchased. It puts a $35,000 cap on the work that can be done. That amount will be inclusive of a contingency reserve and some minor administrative fees for the program. Normal items that we see under this program are updates to kitchens, bathrooms, flooring, and mechanicals; energy efficiency items such as windows and furnaces; along with deferred maintenance items such as painting, siding, and roofing. The needs list of items must stay within the program guidelines. The work being completed cannot keep the homeowner from occupying the property within 30 days of closing, and the project cannot exceed six months in duration. Normally, these Streamline 203K home improvement projects are all wrapped up in under ninety days.

The Full FHA 203K product goes much deeper in scope. This product allows for structural and non-structural repairs greater than $5,000. The upper limit for the program is the FHA loan limit, which is $326,600 in 14 counties (12 in the Metro Area) and $271,050 for the balance of the state. Read the rest of this entry »

Let us help you turn that not-so-perfect home into the perfect dream home for your family! – by Barb Crea

January 22nd, 2016
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Renovation_HomeBuyer demand is expected to continue to outpace the lack of inventory of existing homes this year. Low inventories make it difficult for buyers to find homes that fit the needs of their families in the areas they want to live. Location plays a big part in the decisions we make when shopping for a home – maybe it’s the school district best suited for the needs of our children or wanting to live close to family or work. Location sometimes trumps other desired features and amenities, forcing us to settle for less than what we want in a home. What if you zero in on the perfect neighborhood, find a property that may work but needs some tweaking, or maybe it needs to be completely torn down and rebuilt? With the help of the Kate Wilson Team at Fairway Independent Mortgage, you could make that not-so-perfect home work perfectly!

Our options for home remodeling can provide you with the resources you need. Imagine a two-story four bedroom home, in the perfect neighborhood, that needs some updating, as well as finishing a family room in the lower level and adding a guest bedroom and bath! We can bring in one of our renovation specialists to assess the property and work with you to develop plans and specifications to make the home match your lifestyle and the needs of your family. We lend from the “as completed” value of the home, which includes all the renovations you desire. The Construction-Renovation loan will purchase the property and set up the funds necessary to pay for the costs of remodeling. This process is very similar to our new construction loan, except this time you are purchasing and renovating, rather than building a new home from scratch. As work progresses on the home and payments are needed for material and labor, the contractor prepares a draw request. We review the request, match it up to the sworn construction statement provided in the construction exhibits, and request the title search and inspections necessary to complete that process. Every step of the way, as money is paid out for work that has been completed, we check to be sure no liens have been filed on the property, collect all invoices and lien waivers, and inspect the property to make sure the work has been completed as requested. Read the rest of this entry »

Construction financing options are as easy as 1-2-3! – by Randy Cullen

January 15th, 2016
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40510Many things have changed in mortgage banking after the financial crisis of 2007-2008.  Prior to the crash we experienced loose lending practices and wild increases in house prices. Credit was easy to get and the good times rolled. When the market turned, so did the flow of money. Banks lost their appetite to lend for new home developments and builders found themselves in a tough place. Many did not make it, but those that did came out very strong on the other side.

Today’s custom home builders want you to secure financing for the construction of your new home for several reasons. We get calls every day from clients who have limited experience with mortgage financing in general, let alone new construction financing. When you finance the construction of your home you save money on the interest and carrying costs that a builder financed project would pass on to you. The rate and fees that are charged for the builder to finance construction are more than the rate or fees you pay when the loan is in your name. By excluding the builder’s financing charges, the price of your new home will be less. When you put the new construction loan in your name, with lower financing charges, you save money.  The new custom home you want to build will most likely be built with financing you take out in your name. Construction financing options are as simple as 1-2-3, and we can walk with you through all the steps.

Construction financing is an interest-only line of credit used to build your new home. Your builder will provide us with all the new construction exhibits (plans, specifications, and contract to build), and the project is appraised as if it were complete. The value of the finished product is an important part of establishing how much we lend. Most homes can be built in 90 to 120 days from start to finish, and our standard construction loan is for 6 months. We can go longer if needed (max 12 months), based upon the scope of the project. During the time of construction, money will be disbursed from your line of credit to make progress payments for materials provided and work completed. Read the rest of this entry »

Maximize the financial reward when selling your home. – by Barb Crea

January 8th, 2016
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1-4-2016 6-00-53 PMWelcome to the New Year! 2016 is going to be a knock it out of the park year, and we’re here to help you make that happen. For those of you who are ready to jump in with both feet, Keeping Current Matters (KCM) www.keepingcurrentmatters.com recently released their WINTER 2016 Buyer and Seller Guides. These Guides are updated quarterly with powerful information consumers should consider when buying or selling a home. The Guides are gorgeous! Use them when promoting an open house – “If you know of anyone who’s looking to buy a house, here’s some information for them, and we have the house down the block for sale,” hand them out during the open house or use them as an e-mail follow-up to people who stopped in. E-mail the guides to your entire database and promote them on social media.

The Seller Guide is 20 pages of great information and could be dropped off as a pre-listing package to assist a seller in thinking about the things you want them to think about before your actual appointment. Give a copy to homeowners while prospecting FSBOs and Expired Listings.

A little preview from the WINTER 2016 Seller Guide – page 3:

HOW TO GET THE MOST MONEY FROM THE SALE OF YOUR HOME

Every homeowner wants to make sure they maximize the financial reward when selling their home. But how do you guarantee that you receive maximum value for your house? Here are two keys to insuring you get the highest price possible.

  1. Price it a LITTLE LOW – This may seem counter intuitive – however, let’s look at this concept for a moment. Many homeowners think that pricing their home a little OVER market value will leave room for negotiation. In actuality, this can dramatically lessen the demand for your house. (See chart above)

Read the rest of this entry »