Archive for June, 2017

It’s finally summer time, and the lakes are calling for you…answer the call. – by Randy Cullen

June 30th, 2017


Can I buy a second home, on a lake, and renovate it? The answer is, yes you can! Our construction financing product allows you to buy and renovate so the lake home of your dreams can be a reality.

Any residential mortgage we place on a home will require that the property can be occupied for all four seasons. This means it must be common for the area, be accessible, and will be fully functional as a year round home. That seasonal cabin that you’ve had your eye on could be purchased and renovated to take it from a three season to a four season home.

Seasonal properties, if they are structurally sound, can be made into functional all season homes for those weekend retreats and vacation getaways. The normal seasonal property is not equipped to be lived in during the winter months. It may lack insulation, an adequate central heating source, or fully functioning plumbing. All of these can be remedied with a construction renovation loan.

When you are writing a purchase agreement to buy the property, remember to leave time in the purchase contract to get a licensed contractor out to the cabin. You will need to address the list of items required to take the seasonal aspect away, and add all your wish list items to the project as well. This is the perfect time to put our low mortgage interest rates to work for you. Read the rest of this entry »

Credit scores are important when it comes to construction loans.

June 23rd, 2017

Credit Score

Can I get a construction loan if I have credit challenges? This is a valid question, and one I get several times during the month. Credit scores are extremely important when it comes to construction or construction renovation loan programs. Each of the products or programs we offer can differ in the credit scores that are acceptable.

To begin with, we only use company approved credit reporting vendors. These vendors are also approved with the agencies’ automated underwriting products that we use. The vendors go direct to the credit repositories that keep the data and merge it into a report with scores. The three repositories are Equifax, Transunion, and Experian. These reports merge directly into our system and the automated underwriting systems we use. The report will contain credit scores, a list of any inquiries for new credit within the most recent time period, a list of any public records that might exist, and the history of individual credit accounts used to create the score. The scores take into account the number of accounts shown, length of credit history for each account, report of timely payments made, and the ratio of balance of revolving accounts to the credit limit granted for each. These are very detailed reports.

When three credit scores are present (in most cases) our automated underwriting system uses the middle of the three scores for its credit decision. Here are some of the basic rules as they relate to construction and renovation products: Read the rest of this entry »

Storm season is upon us – know what to do if your home sustains damage!

June 16th, 2017

hail damageLast Sunday morning severe weather hit the twin cities.  Many of the northern suburbs suffered severe wind and hail damage.  Both of my daughters and their families that live in Blaine were affected with broken windows, roof, gutter and siding damage. Anyone that is dealing with this knows it is not easy to recover from.

Your first step after storm damage is to contact your insurance company to determine your coverage and filing requirements. Take photos or video of any damage. If you are doing any cleanup prior to the adjuster showing up, it is a great idea to document everything.

If you need to make minor repairs to limit any further damage (as in water damage) do so, but otherwise do not make any permanent repairs until you have approval from your insurance company.

Get multiple estimates and beware of high-pressure sales tactics. Ask friends or family for recommendations. It is always good to get a referral from someone you know and trust.

Ask contractors/vendors for proof of liability and workers compensation insurance. Make sure they are licensed to do work in your state. There will be contractors from outside the area that will come into the area looking for work – Please be careful!

You need to have a written contract from anyone you hire. Be sure to read all paperwork very carefully before you sign. The contract should detail the work to be done, the materials that will be used, and a price breakdown for labor and materials. Don’t pay cash for a job, and don’t pay up front.

Also, don’t file a claim for something you don’t intend to fix. This is a big one for us in the mortgage business. If you hold a mortgage, your mortgage company has a vested interest in having the property restored. Many times your mortgage company will need to sign off on the check coming from your insurance company.  Read the rest of this entry »

Let us help guide your construction ideas to a successful outcome!

June 9th, 2017


Will I be able to use construction financing to build a barnlike structure with living quarters?” This is a question that came up this past week. New construction financing and construction renovation financing do have their limits. This week I would like to discuss what works, and what does not work, for residential new construction and construction renovation financing.

Our program works for conforming residential properties. These are generally owner occupied, but we do have clients who build or renovate a property that will be retained and rented. We look at the highest and best use for the property, which needs to be residential in nature even if it is outside of a metro area in a more rural setting. When the appraisal is done on the new build or renovation project, the appraiser will look for comparable properties around the area. The property needs to be compatible, or common, for the surrounding area or market in which it is located.  So, if someone is looking to buy acreage and wants to build a new home, that is great! If that new home will be a barnlike structure with horses on the main level and living quarters on the second floor, that will be outside the scope of our conforming loan products.  Read the rest of this entry »

It’s National Homeownership Month!

June 2nd, 2017

homeownership month

June is National Homeownership Month. It began in 1995 as a Presidential Initiative to support and expand home ownership opportunities for Americans. After all, owning a home is the American dream and a way to build wealth that can be passed on to future generations.

Here in Minnesota, the Minnesota Homeownership Center and many members of the Homeownership Advisors Network are offering free or reduced prices on first time home buyer training, commonly know as HomeStretch™ which is done in a classroom setting, or Framework which is the online version. You can sign up for a class by visiting (home ownership center Minnesota), or click the link to register for the online training .

June Homeownership Month puts the spotlight on how homeownership positively correlates to the building of strong, vibrant communities. Data from The State of Homeownership report published by the Minnesota Homeownership Center shows that:

  • Homeownership Remains a Family’s Greatest Asset. On average, more than one-third of total household wealth is tied to homeownership. Among Black and Hispanic households who own, homeownership still makes up nearly two-thirds of total wealth.
  • Benefits of Homeownership Extend to Civic Engagement, Health, Education, and More. For example, homeowners are 25 percent more likely than renters to participate in civic and neighborhood groups.
  • Homeowners who receive housing counseling before they purchase are less likely to fall behind. According to a recent study by NeighborWorks America, prepared homebuyers are roughly 33% less likely to become seriously delinquent on mortgage payments over the first two years of owning a home, compared to those who didn’t receive counseling.

With the free or reduced homebuyer education being offered this month, now is the time for those first-time buyers who may still be on the fence about transitioning from renter to homeowner to make the move! We are here to help make the American Dream of homeownership a reality!  – Randy Cullen, NMLS #326128