Trick to pay off your mortgage in 1/2 the time

Pay your home off in half the time…

It isn’t a trick to pay off your mortgage in half the time, it is not some scam, it is actually really simple. Most homeowner don’t think they can do this, but the reality is, most actually can pull it off if you simply put your mind to it.

How?  Dump your 30-year mortgage for a 15-year mortgage. By switching to a 15-year mortgage, the average person will pay somewhere around 64% less over a 30-year loan.

Financially savvy homeowners are capitalizing on the savings they can reap by refinancing to a shorter loan term. Last quarter, nearly 40% of U.S. homeowners refinanced out of an existing 30-year fixed rate mortgage and into a shorter 15 or 20-year loan term.

With 15-year mortgages being near their cheapest levels in history, refinancing to a 15-year term is a very smart decision. Prior to 2012, 15-year mortgage rates were 0.52 percentage points lower than a 30-year loan. However, in last year’s fourth quarter they were averaging about 0.97 percentage points lower that a 30-year loan.

According to Freddie Mac, current 15-year loans require just $28,000 of mortgage interest per $100,000 borrowed. A 30-year mortgage costs $81,000 per $100,000 borrowed. Never in history have savings of this capacity been possible!!

Of course a shorter term loan is going to cost you more money per month today. But generally speaking, many people never ask, and don’t even know what the 15-year mortgage payment would be.

house_calcToday, a $150,000 loan:

– A 30-yr fixed at 4.625% would run $771.21 a month and interest of $131,539 over the life of the loan.

– A 15-yr fixed at 3.375% would run $1,063.14 a month and interest of $45,191 over the life of the loan

The vast majority of people with a slight modification to their financial priorities could easily afford the difference, save themselves a fortune in interest, and own their home in half the time.

View live mortgage rates in MN and WI, calculate your savings, and apply today.

Underwaters homes dramatically lower

Minneapolis, MN: Since the real estate market collapse, many home owners found themselves owning much more than their home was worth on the fair market. This created many problems, from the inability to sell and move, foreclosure from the inability to sell, and a hard time refinancing because of the lower value.

Homes for sale - real estate - MinnesotaThe housing market has been slowly climbing up the ladder, and according to a report from Zillow, the share of homes underwater has now dropped to under 20%

The same report stated that the underwater rate is currently about 19.4% of all homes. This is an improvement of about 3.9 million homes going back above water in 2013.  This is down from about 27.5%  of all homes underwater in late 2012.

As values increase, millions of people who may have had a pent up demand to move, but couldn’t, now suddenly find themselves once again above water.  More people are likely above water than actually realize, as many people rely on county tax statements for their value estimates. But tax value and fair market value, or what you could actually sell the home for, are many times two dramatically different numbers.

I advise anyone thinking of selling, to contact a local Real Estate Agent to get a fair market assessment of their home, and to contact a mortgage broker in their area to see what they would qualify for in a new home, or to see about refinancing.

The market is expected to slowly continue the climb towards a more balanced market, with the report estimating the negative equity of homes nationwide to drop even further, to just 17.2% by the end of 2014.

Refinancing after a bankrupcy

Q: Do you have to reaffirm your mortgage with a bankruptcy to refinance the mortgage loan today?

Minneapolis, MN:  I hear this question on a fairly regular basis, and the plain and simple answer is NO.

You DO NOT need to reaffirm a mortgage loan that was in a bankruptcy to refinance that loan today. Anyone telling you otherwise is 1000% wrong.

refinance mortgage bankruptcy affirmation reaffirmationIf you did not reaffirm your mortgage during your bankruptcy, the mortgage did not disappear. It is still a lien on your house.  It is still owed and must be paid unless you are willing to risk losing the property.  The mortgage company — the servicer — virtually always wants you to make these payments.  And they often don’t care about the reaffirmation and will not waste their time (and your money) asking for it during the bankruptcy case.

If you pay, you get to stay

If you don’t pay, you will be foreclosed on and have to vacate the house.  The bankruptcy will protect you from ever having to pay any loses ON THAT LOAN.  But if you sign and take out a new loan, it is a new debt, a new loan, and the previous bankruptcy protection from the old loan is gone.

The problem new lenders have is because of the bankruptcy, the current lender is no longer reporting your payment history to the credit bureau.  A new lender is required to get a current payment history, and that can sometimes be very difficult.

The Loan Officer is Wrong!

With that said, some lender want you to reaffirm.  Sort of stupid, but that is up to them…  Not every lender feels the same way. Plenty of Loan Officer are also simply wrong in saying you need to reaffirm the loan first. If you are talking to someone telling you you need to reaffirm to refinance, call a different lender.
If you in this situation for a property in Minnesota or Wisconsin, we can help you.  Just apply online or call (651) 552-3681


Millions of homeowners gain equity in 2013

Minneapolis, MN:  2013 was a pretty good year for the real estate market. According to CoreLogic, an estimated 3 million homeowners regained significant equity during the year remarkable year.

Real estate home values in MNThe increase in equity has many positive effects.

First, many more homeowners are now in a position to sell their home without taking a (big) loss. There has been some huge pent up demand for many to sell their home and move, but just couldn’t.  The next effect is that many more people are able to refinance to take advantage of current mortgage rates to either lower their existing loan payments, or to take cash out to repair or improve your home, or pay off other debt.  Finally, these people just simply feel better about their financial situation because they are no longer underwater. Higher consumer confidence leads to people willing to spend money, which has an obvious value to the economy.

According to the report, around 65% of homeowners have either no mortgage, or have at least 20% equity in their homes. Unfortunately, this still leaves an estimated 6.4 million homeowners who have real estate in a negative equity position. Experts point out they expect values to continue to rise in 2014, but likely at a slower pace than 2012 and 2013.

Interested in knowing what your how is worth?

Get a free estimation of your homes value here.


HARP refinance – working for thousands in MN

Few things the government does can be called a real success story, but the HARP Refinance program is one of them.

If you’re not familiar with the Home Affordable Refinance Program, also known as HARP, it’ is a program for good homeowners, that through no fault of their own, lost value on their home and therefore typically could not refinance. 

Generally speaking, it serves two situations.  First is that your current loan was done NOT needing mortgage insurance. Having lost value, now for example you owe 95% of the (lost) value, and could only get a new loan by adding expensive mortgage insuance to the new loan.

The second is that you bought the house, you put at least 5% down payment. So today, if you now owe more than the home is worth, you normally would NOT be able to refinance at all.

HARP, which started back in 2009, fixes both of those situations. If your existing loan does NOT have mortgage insurance, regardless of the current loan-to-value, your new loan would NOT need mortgage insurance. If your house is underwater… regardless of how far underwater, you can also refinance.


Who is eligible for HARP? You may be eligible if:

  1. The mortgage must be owned or guaranteed by Freddie Mac or Fannie Mae.Who you make payments to can be different than the underlaying owner of the loan.
  2. The mortgage must have closed on or before May 31, 2009.
  3. The mortgage cannot have been refinanced under HARP previously unless it is a Fannie Mae loan that was refinanced under HARP from March-May, 2009.
  4. The current loan-to-value (LTV) ratio must be greater than 80%.
  5. The borrower must be current on the mortgage at the time of the refinance, with no late payment in the past six months and no more than one late payment in the past 12 months.

 Do I qualify for a Home Affordable Refinance – HARP?

While there are requirements you have to meet to qualify, many have misconceptions about HARP that are misguided or completely false. Don’t assume you can’t qualify, or that you will be denied. Contact an experienced local mortgage broker for a quick no obligation review.


  • Lower your monthly payments
  • Closing costs are the same as any other mortgage loan
  • Closing costs can be rolled into the loan
  • Refinance into a shorter loan term (20-yr, 15-yr, etc)


If you have a conventional loan, most likely it is owned by Fannie Mae or Freddie Mac. But if you have a different loan. Maybe an FHA Loan, and VA Loan, or even a USDA rural housing loan – you can still refinance if your home has loat value.  Those loans all have seperate programs, known as a streamline refinance. These programs offer reduced documentation, but the biggest benefit is there may be no appraisal required, allowing lost value or underwater homes to easily be refinance to today’s interest rates.

In MN or WI, visit for more information and assistance on the HARP 2.0 government refinance program.


FED taper has begun – Now what for mortgage rates?

So the Fed taper has officially been announced, and will start next month.  Now what for  mortgage rates?

Fed Chairman BernankeThe answer is, it depends.

How fast will the Federal Reserve winds down the rest of its bond-buying program.

Do they stay on track for what was announced? Will the economy continue slowing getting better?  How will the new Fed Chairwomen handle the office?  These, and many other items all play into the question.

On Dec 18th, the Fed announced that it would taper (slow) its mortgage bond buying by $10 billion per month, split evenly between its purchase of Treasury bonds and mortgage-backed securities.  Soon to be out the door Chairman Bernanke said in a press conference that the Fed would most likely continue to slow down the bond purchases at a rate of $10 billion at a time, over the next several meetings of its rule-making committee.  He also said that decision was more of a flexible guideline than a hard-and-fast policy, and that the process will be deliberate and data-dependent. He further added that  if the economy slows, we could skip a meeting or two. On the other hand, if things really pick up we could go faster.

The guaranteed outcome is that mortgage interest rates WILL RISE as the Fed winds back its bond purchases. As for how fast and how far rates rise, that depends on how steady, and how fast or slow the tapering is over the next year.

Myths about HARP 2 refinance explained

HARP 2 refinance in MN or WIA Freddie Mac senior vice president is using the company’s blog to debunk a few myths she says may be keeping homeowners from refinancing with a HARP 2 refinance (the Home Affordable Refinance Program).

Tracy Mooney’s information about on nine HARP misconceptions might not only be helpful for homeowners themselves but a good resource for lenders to share with customers and the public.



Big TV Mortgage Companies – Deal or no deal?

You and I are constantly bombarded with some big national mortgage companies advertising.  Because they are familiar to you from a TV or radio ad, does this automatically make them the best place to get a mortgage loan? The answer is no. 100% absolutely no…

Minnesota Mortgage ratesYou need to understand that all lenders underwrite to the same program (Fannie Mae, Freddie Mac, FHA, VA, etc.) , get their money from the same sources, and have to pay the same third party fees (appraisal, credit report, etc).

The real difference from any lender on any given day might be about .125% for the same program when comparing the same closing cost quote.

Mortgage Advertising Bait-n-Switch

Most of their so called “deals” simply employ creative low ball quoting that the average homeowner doesn’t understand. To make it worse, these types of companies typically employ low level, low education application clerks. Is that who you want handling your largest financial transaction? An application clerk?

Another item to understand… if all lenders get their money from the same bond market on the same day at the same time. If all lenders have essentially the same costs to close your loan. How does the company advertising on TV and radio all day, everyday, in all markets across the country pay for that huge expense? Well silly… They charge it to you!

We have a saying in our office. They more they advertise, the faster you should run away.

Your best bet has always been, and continues to be to go visit your local licensed Loan Officer at your LOCAL mortgage broker.

HARP 3.0 refinance coming soon?

HARP refinance in MN and WIA new evolution of the HARP refinance program MAY soon be upon us.

HARP 3.0 looks like it’s going to gain headway and make it’s way to the streets since Mel Watt is the new kingpin of FHFA.

HARP loans in MN (Home Affordable Refinance Program) have been one of the few programs to really assist homeowners since the real estate market collapse.  The program allows homeowners who has a loan owned by Fannie Mae of Freddie Mac to refinance to today’s lower rates, even if they’ve lost value on the home, or are actually underwater on their loan.

Since the start of HARP back in 2009, those without  a Fannie Mae of Freddie Mac loan have been out of luck, but that MAY be changing soon.

Under the current HARP refinance rules:

You may be eligible for a current HARP 2.0 refinance if:

  1. The mortgage must now be owned or guaranteed by Freddie Mac or Fannie Mae.
  2. The mortgage must have closed with your lender on or before May 31, 2009.
  3. Check for ownership with:  Fannie Mae or  Freddie Mac
  4. The current loan-to-value (LTV) ratio must be greater than 80%.
  5. The borrower must be current on the mortgage at the time of the refinance, with no late payment in the past six months and no more than one late payment in the past 12 months.

Stay tuned… We’ll pass the word if and when HARP 3.0 becomes reality.

HUD lowers FHA Loan Limits for 2014

New FHA Loan Limits

Looking to get an FHA Loan in 2014 and beyond? FHA Loans, FHA Lenders, FHA Loan Limits, Lookup tool, Minneapolis, St paul, MN, WIHUD ( Department of Housing and Urban Affairs) announced last week it will be lowering the maximum loan amount for FHA loans (Federal Housing Administration). The new limits will take effect Jan. 1.

Each county across the county has a maximum loan amount, which is tied to the areas average income.  The standard FHA loan limits for areas with relatively low housing costs will stay at its current level, $271,050. However, the limit for areas with the highest housing costs will be reduced by more than $100,000, from $729,000 to $625,500.

To learn what is available in your area

Use this FHA Loan Amount Lookup Tool.  Be sure to click the CY2014 for the new limit

The current limits have been in place for the past six years, and were originally set to lower in 2009, but were left alone because of the real estate crash.

Loan limits for FHA-insured reverse mortgages will remain the same at a maximum amount of $625,500, with actual loan limits based on the value of the property, current interest rates and the borrower’s age.

While not for just first time home buyers, they are wildly popular with first time buyers because they only require a down payment of 3.5%. That down payment can be their own money, a gift from a family member (like Mom and Dad), or from a down payment assistance program.

FHA loans also allow for a little weaker credit profile, and you can even use one to buy a house needing repair, and get the money to fit it up all in one loan. That is known as the FHA 203(k) rehab loan.

FHA loans are not perfect. They also come with some of the most expensive mortgage insurance of all mortgage loans.

Interest rate forecast for 2014

Everyday, I am asked “what are mortgage rates going to do?”

Minnesota mortgage ratesNo one has a crystal ball, but here are a few reasons we should expect mortgage interest rates to be higher in 2014.

1) New mortgage rules starting in 2014 are going to make getting mortgages harder, take longer, and cost you more money to obtain.  Lower debt to income rations, new forms, qualified mortgages, the CFPB, and more are all expected to take a significant toll.  Remember, Barney Frank, Chris Dodd, and all the others said their brilliant financial reforms would save you money…  All I’ve seen is high costs!

2) Economists at Freddie Mac have indicated they expect interest rates to be in the 5’s throughout 2014 because the economy is getting better (albeit slowly), and the Federal Reserve is expected to stop artificially propping up the mortgage market, with their buying of mortgage backed securities

3)  Affordability indexes are falling.

The good news is, there’s still time to take advantage of low refinance rates and new home purchase programs now if you’re a consumer.

Minneapolis Refinance activity still low – but should it be?

Since spring of 2013, the number of home owners refinancing to lower interest rates has dropped dramatically, but according to a survey release Tuesday, people who refinanced their home in the third quarter will see about $6 Billion dollars worth of savings over the next year alone that can be used for better things, like paying down credit card or student loan debt – or just to put into savings.

So why are more people not refinancing?

Minnesota mortgage ratesFirst, many people already have… and with 30-year fixed mortgage rates hovering +/- 4.50%, there is little incentive for people to do it because they already have good rates.

The rest appear to not be doing it because they either can’t because of poor credit or other approval hurdles, or they simply think they can’t – but have never tired.

The think they can’t refinance but have never tried group is clearly missing out.

Many who think they can’t, think that because their homes have lost value.  But with programs like HARP (Home Affordable Refinance program), FHA Streamline Refinance Program, and the VA Streamline Program (also knows as an IRRRL Loan), the vast majority of people can.  Never assume you can’t. Pick up the phone or surf over to your local mortgage brokers web site.  It only takes a few minutes to determine if you can refinance, and if you do, what are the savings.

Advantages of refinancing

The obvious big advantage is lowering your monthly mortgage payment.  But there are other significant advantages like paying off other debt, or shortening the term of you loan to pay it off earlier. According to recent reports, an amazing 37% of homeowners shortened the remaining term of their loan.

At the moment, 15-year fixed-rate loans averaged around  a full percentage point below 30-year loans.  That is a big incentive all by itself.  But many people are wanting to go into retirement house payment free, and realize that the low rates on shorter term loans helps them achieve that goal.


Mortgage Rates drop to 4 month low – Oct 24th, 2013

Minneapolis, MN –ir-2 Freddie Mac today released the results of its Primary Mortgage Market Survey® (PMMS®), showing average fixed mortgage rates hitting their lowest levels since this summer amid market speculation that the Federal Reserve will not alter its bond buying purchases this year.

News Facts

  • 30-year fixed-rate mortgage averaged 4.13 percent with an average 0.8 point for the week ending October 24, 2013, down from last week when it averaged 4.28 percent. A year ago at this time, the 30-year FRM averaged 3.41 percent.
  • 15-year fixed rate mortgages this week averaged 3.24 percent with an average 0.6 point, down from last week when it averaged 3.33 percent. A year ago at this time, the 15-year FRM averaged 2.72 percent.
  • 5-year adjustable-rate mortgages (ARM) averaged 3.00 percent this week with an average 0.4 point, down from last week when it averaged 3.07 percent. A year ago, the 5-year ARM averaged 2.75 percent.

Attributed to Frank Nothaft, vice president and chief economist, Freddie Mac.

“Mortgage rates slid this week as the partial government shutdown led to market speculation that the Federal Reserve will not alter its bond purchases this year. The weak employment report for September added to this expectation. The economy added just 148,000 jobs, which was below the market consensus forecast and less than the 193,000 jobs increase in August.”


Freddie Mac’s survey is the average of loans bought from lenders  last week, including discount points. Applicants must pay all closing costs at these rates. No cost loan rates higher.

Average Home Prices Now Equal to April 2005

There is some great news in real estate… The FHFA (Federal Housing Finance Agency) reported that home prices posted a 19th consecutive monthly gain in August.

welcome2_FTHB_1On a year-over-year basis, the August report was up 8.5 percent.  This means average nationwide home prices are now equal to what they were in April 2005.

We are getting there, but this report also shows that the average market level is still 9.4% below the price peek of April 2007, right before the housing market crashed.

Values increased in seven of the nine Census Divisions in August with the South Atlantic and East North Central divisions experiencing declines.  The South Atlantic region, which encompasses all coastal states from Florida to Delaware, was down 0.5 percent and the East North Central (Wisconsin, Michigan, Indiana, Ohio, and Illinois) division saw prices go down just 0.3 percent.

The largest value increases were in the Mountain (Utah, Montana, Colorado, Nevada, Arizona, New Mexico, Idaho) and West North Central (North Dakota, South Dakota, Minnesota, Iowa, Nebraska, Kansas, and Missouri) divisions which rose 1.3 percent and 1.2 percent respectively.

The August 2012 to August 2013 changes were largest in the Pacific Region (Oregon, Washington, California, Alaska, and Hawaii) where homes appreciated 18.2 percent and the Mountain division with a 13.8 gain.  The smallest annual increase was in the Middle Atlantic division is Pennsylvania, New Jersey, and New York, where prices were up 4.0 percent.

As values continue to rise, more and more sellers can safely sell their homes – which should help with inventory issues.  It also means that potential first time home buyers really need to jump into the market to buy a home TODAY, as those gains for sellers equals less buying power for buyers.


Why real estate got into trouble

This is why Real Estate got into trouble…   Not disclosures, not loan programs, not loan officer compensation…

Rather a gimme gimme gimme… I deserve… attitude OF CONSUMERS.

Unfortunately, the lending industry was all too willing to give these folks the money too!

A commercial from the height of the boom…

Mortgage Loan Approval – Things NOT to do

Applying for a home loan can be a stressful time, but doesn’t need to be if you follow certain rules that can unexpectedly trip up your mortgage loan approval.

Some of these tips will be obvious, while others won’t – but all of them are items that regularly cause underwriting headaches. Avoiding these mistakes will help lead to a smooth stress free home loan closing.

images124Dos and Donts of a Smooth Home Loan Approval

  • DO continue to live at your current home.
  • DO continue to make your home loan payments or rent payments on time
  • DO continue to use your credit as normal (but see don’t items)
  • DO keep working at your current job.
  • DO keep your same insurance company.
  • DO stay current on all your existing accounts.
  • DO keep credit card balances low (below 25% of available credit is perfect)
  • DO call your home loan expert if you have any questions.

DON’T  do any of these items within 90-days of application or until after closing

  • DON’T apply for ANY new credit. No cars, no furniture, no credit cards, no cell phones, no boats, no new loans of any kind
  • DON’T buy any furniture ON CREDIT after you’ve found your dream home
  • DON’T close any credit card accounts,  or consolidate your debt onto one or two credit cards.
  • DON’T pay off any loans or credit cards without discussing it with your Loan Officer.
  • DON’T change bank accounts
  • DON’T move money around from one account to another.
  • DON’T pay off collection and charge offs accounts without a discussion with your home loan expert.
  • DON’T amend your tax returns
For a Refinance
  • DON’T start any home improvement projects, or don’t bother applying until any current project is finished

The biggest item left is simply this… ALWAYS tell your Loan Officer EVERYTHING. Not thinking it is important, or even straight up lying, is only going to cause trouble down the line.  You’d be surprised at the checks underwriting does during the process, and the things that are “discovered”. Mention everything it to your licensed Loan Officer right away so they can help you determine the best way to achieve your home loan goals, and avoid any unnecessary delays or surprises during the process.