Kate's Blog

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Veteran’s Day is Saturday, November 11th

November 10th, 2017
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AWI group pic

Fairway Independent Mortgage supports the American Warrior Initiative as our way of giving back to those who have served our county – we wear Red on Fridays to Remember Everyone Deployed. This photo was taken at the conclusion of our American Warrior Realtor CE event, where we presented a local veteran with a mobility scooter and laptop computer.

This Veterans Day, remember those who have served our county.  Whenever or wherever you see a veteran, thank them for their service. Those actively serving should also be recognized for their dedication to service for our country.  Wear Red on Friday’s and engage with those who ask what it means.

Our country has been built through the sacrifice of all who have served…
Remember them this day and everyday.

October 13th, 2017
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Architect engineering worker working in office. shot in studio.Here is a question that comes up frequently, “I want to act as my own general contractor for my renovation project. Lenders I call are telling me NO. Why is this a problem?” First off, just saying no is not the most productive response to the question. Answering the question as an educational opportunity is much more helpful.

My conversation with the caller starts with their level of experience or credentials, and if they are licensed. Construction and renovation financing is more readily available today than it has been since the housing market troubles years ago, but lenders or banks are still looking at the elements of risk that might be layered in each and every transaction. When a client does not have the level of experience or credentials needed, lenders are not going to be interested in lending money to the project. A licensed general contractor or builder will be required for the project to be considered.

A general contractor or builder will provide the project management skills which allow them to be the conductor of the entire process, from start to project completion. These individuals are licensed, have a history in construction and renovation work, can provide the necessary builders risk insurance, and generally work with a group of subcontractors that they trust to get the job done. Read the rest of this entry »

October 6th, 2017
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credit info picEquifax, one of the three major credit bureaus, suffered a security breach from mid-May through July 2017 that compromised the personal identifying information of at least 143 million consumers from the US, UK, and Canada in the form of names, addresses, social security numbers, birth dates, and driver’s license numbers. If you are worried that your information may have been compromised, the Federal Trade Commission has released steps that you can take:

  1. Visit equifaxsecurity2017.com, click the “Potential Impact” tab and follow the instructions.
  2. Order your free annual credit report from the three major credit bureaus. Review your reported information for accuracy and dispute any incorrect information.
  3. Monitor your bank and credit card statements to ensure that no unauthorized charges are taking place.
  4. The IRS Taxpayers Guide to Identity Theft will explain new identity theft procedures that are being implemented by the IRS for 2017 tax filing season.

If you have not visited the equifaxsecurity2017.com site, you should – the number of consumers affected has grown over time. Look at all the options available to you when placing a credit freeze on your accounts, setting up fraud alerts or monitoring. Some of these come at a cost, like a credit freeze, and require you to remove the freeze before you can have new credit extended to you. Be sure you take a look at your credit and choose the security option that makes sense for you – this is definitely a situation that warrants a “better safe than sorry” approach!

September 22nd, 2017
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house coins scaleWhat happens if I pay off my lot loan before I start building my new home? This question comes up regularly when I discuss construction financing options with clients. Building a new home can involve securing a lot or piece of land and placing financing to buy that land before the plans for the new home are completed. This lot loan is generally an interest only product if the client is going to have the new construction project completed within a two year period of time. There are times when construction financing will not be entered into until a current home is sold in order to provide the balance of down payment funds for the project. This scenario does happen with some frequency.

Lot loans have no pre-payment penalties, and they generally require only the payment of interest on the debt. Clients sometimes choose to pay down or pay off the lot loan when they receive proceeds from the sale of property. Based upon the amount of funds available I may suggest that the money is used to reduce the construction loan we will be placing to build the home, rather than to retire the lot loan. Both ways work, and I prefer whichever option works best for the individual client’s financial picture.

When cash flows into a project, either for the lot or the construction loan to build the home, credit is given towards the project. The appraised value of the finished product determines our loan to value and the amount of cash needed for the loan structure. When the value of the land plus the build equals total value, any cash investment into down payment will count towards the project. For instance, the down payment on the lot counts as cash in the deal. Paying off the lot in full adds more cash into the deal. As long as the total project cost equals the appraised “as completed” value, any down payment funds or lot payoff count as equity in the project.

Call me at 952-851-8962, or send an email to randyc@fairwaymc.com, with any questions you have regarding the different aspects and approaches to construction financing. I have 24 years of experience, and will be happy to use it to help!  – Randy Cullen, NMLS #326128

Parade of homes is off and running…new construction may be the answer to your housing needs!

September 15th, 2017
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9.15 blog picParade of homes is off and running.  Foot traffic, or the amount of people out looking at model homes, is very high. Our low inventories of existing homes are bringing lots of folks out to check out the options at builder models. Buying a new construction home, or building a new home for the ground up, can be the experience of a lifetime.

Let’s look at new construction options. Maybe a client already owns a home or piece of property with a structure on it that needs to be torn down; or perhaps they own a lot or acreage with no structures. Both are scenarios where I can be of help, and builders are happy to work with. Not all new construction needs to take place on a finished lot in a new development – there are ways to build on a less conventional lot. The process for the construction loan is nearly the same in both cases.  We need to consider the value of the land or lot you already own in addition to the cost of the new home.  Value for the completed project is what we are after, as we lend from the “as completed” value.

For a vacant lot or piece of land already owned by the client, we gather plans, specifications and contract from the builder and request for the appraisal to be “as completed.” There is no existing structure that needs to be removed that would cost extra for demolition. The appraiser will give us a value of the finished product on the lot or land you own. We can then use the equity you may already have in the land to minimize the amount of additional cash you need to supply. This is a great way to go, and loan-to-value follows purchase guidelines rather than refinance guidelines. Read the rest of this entry »

There are many events and economic reports that can have a direct impact on the cost of borrowing.

September 8th, 2017
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Ever wonder ho9.8 blog picw all the noise around the globe will affect your mortgage interest rate? It is amazing to me how many glass balls are being juggled right now, and dropping any one of them could cause us great pain in the mortgage bond market.

At the top of the list and all over the news is Hurricane Harvey, with Irma following close behind and heading for Florida. Congress has stepped up to fund hurricane relief around the gulf coast, which is great for all those affected. I am sure much more aid will be needed, but this is a good start. The stock market was happy about the news of hurricane relief as it also came with a three month extension of the US debt limit, keeping the government funded through December 15th of this year. The mortgage bond market lost a little steam as investors moved to stocks, which led to slightly higher interest rates. Money is always in motion, so watching where investors place their dollars will give you a good indication of how rates rise and fall.

Another example that caused turmoil in the markets – tension over North Korea’s testing of nuclear weapons. These actions have posed a direct threat to the region and rattled global markets. Just the thought of any kind of nuclear event is too great to imagine. We hope for the best outcome and a peaceful solution, which would help stabilize global markets and lead to improving both the stock and bond markets (higher stock prices and mortgage rates remaining low).

When you hear comments from the Federal Reserve Chair or the response from a Fed meeting, take note of what they did and listen to what they say. The market reaction to actions or statements can make your cost of borrowing more expensive. Markets move on fear, and adjust to reality once the dust clears… Always look at the big picture!          – Randy Cullen, NMLS #326128

 

2017 Fall Parade of Homes is almost here!

September 1st, 2017
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parade of homesThe Builders Association of the Twin Cities is kicking off the Fall Parade Homes September 9th at noon. You are invited to tour 406 new construction homes during the run of the parade from September 9th to October 1st. Homes are open the first week end from noon to 6PM, then each Thursday through Sunday through the remainder of the parade, noon to 6PM .

Buying or building a new construction home can be a dream come true. With mortgage interest rates remaining low, it may be the time to look at how affordable a new home could be. There are so many added benefits that come with new construction – everything is new and under warranty which is a big plus. New homes are full of the latest technologies to enhance safety and security for your family; and they are built with a variety of energy efficiencies that ensure heating and cooling costs are lower, while improving the quality of indoor air.

This Fall Parade of Homes will showcase prices from $175,000 to $2,285,000. I just picked up my Parade guidebook at a local Holiday Station store, but you can also go to www.paradeofhomes.org for the online version. You will find the map that shows the location of all 406 properties. With the shortage of existing home inventory, this could be the perfect time to plan your next move…into new construction! Take advantage of the top price you could receive from your current home and use that equity to move your family to the address you always wanted.

Don’t forget your mortgage pre-approval. We are online and paperless these days with a mobile application to download right on your phone. How easy is that? As always, you can come in, call, or click. We are always open on the web. Happy house hunting!

– Randy Cullen, NMLS #326128

Where do you fit in the “real estate circle of life”?

August 25th, 2017
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Home inventory

Get ready for lift off – I think the fall market is going to be amazing! Market Watch reported that consumer confidence is at its highest level in 16 years. When consumers feel confident they get out and do things, like buy homes.

The Z Report, published by Zelman and Associates, projects that the homeownership rate for 2017 is going to be the highest it has been in three years. The president of the Mortgage Bankers Association, David Stevens, sees a strong and improving economy with low interest rates and high employment. He also commented on the fact that home-buying millennials will keep the housing market on a steady course for the foreseeable future.

Gallup did a poll that asked the question, “What do you think is the best long term investment?” Real estate came in with the highest percentage at 34% – higher than stocks and mutual funds, gold, savings accounts or bonds. An NAR (National Association of Realtors) study came out indicating that 84% of Americans now believe that purchasing a home is a good financial decision. Homeownership has proven to be an effective way to build personal wealth, renting is an effective way to build your landlord’s wealth! Either way, you are paying a mortgage.

With existing home inventories being so low, we need to look more than ever to new construction to fill the housing gap. Move-up buyers can build that larger 4 or 5 bedroom home to fill the need for their growing family. That frees up a more modest home for the millennial or first time home buyer. The down-sizing or retiring couple can build their lake home and free up their existing home for a growing family. Give me a call, and let’s see where you fit in the “real estate circle of life.”

– Randy Cullen, NMLS #326128

American Warrior Initiative – Realtor Certification Event & Gala…

August 18th, 2017
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AWI invite

Become an AWI Accredited Real Estate Professional! Register for our 3 hour certification event.

The American Warrior Initiative has been able to help veterans obtain much needed service dogs, business grants, automobile purchases, home repairs, and help with medical bills, etc.
We will also be sponsoring an AWI Gala Tuesday, October 24th at The Village in Waterville, MN to raise awareness and dollars for the organization with a silent auction, appetizers, dinner and dessert.
Single Admission Tickets $50, Couple’s discount (2 tickets) $80.00
Sponsor a Table of Eight & Receive Special Perks $750.000
To register for the Gala or for more information email andrear@fairwaymc.com

A construction renovation loan may be just what you need…

August 11th, 2017
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Constructionext reno loans, or any of the construction renovation products we offer, allow you to buy and renovate at the same time, saving you lots of money. Looking at a property that needs some work? Our suite of products gives you the ability to roll the work into the mortgage. You do not need to have cash to make the updates on top of your down payment.

The number one reason to use a renovation product when you purchase is the use of conventional or FHA rules for down payment. Conforming conventional loans require as little as 5% down, and FHA requires 3.5%. The product that will be recommended to you will be based upon the current purchase price of the home, the repairs you wish to undertake, and the end value that will reflect the completed project.

• FHA loans have a maximum mortgage limit in our metro area of $332,350.
1. FHA 203K Limited Renovation products allow for non-structural repairs up to                        $35,000.
2. The FHA 203K Full Renovation product would be used if you have structural
repairs, or if the scope of work will be over $35,000.
• The Conventional Renovation product also offers different programs related to the
structural or non-structural aspects of the work to be done, and comes with a higher
maximum loan amount of $424,100.
• A Conventional Construction loan may be what you need. If your project is the
purchase of a property with an existing structure that needs to be torn down and a new
home built, we have a full construction to permanent product just for you.

When you are out looking at properties that meet your size, location, and school district requirements, try to see beyond what the house looks like in its current state. Envision what it could be if you made the changes that will make it the right home for you. Have your contractor put together a plan and a bid to do the work. Then, you can buy with confidence – renovate and save. – Randy Cullen, NMLS #326128