This weeks Mortgage Market Guide Newsletter. Home Improvement tax credits and Jobless claims.
This weeks Mortgage Market Guide Newsletter. Home Improvement tax credits and Jobless claims.
I hear this every week. Seems like when it is a buyers market, everyone want to be Donald Trump Jr.
OK, so what is my #1 question? How much do I need for down payment!
Buying a duplex, triplex, or quad isn’t really overly complicated on the mortgage side. You basically have two options:
1) Are you going to live in one unit?
If yes, then you can potentially get an FHA loan with as little as 3.5% down payment.
2) Is every unit going to be a rental?
If yes, then your down payment options are more expensive. Basically you are going to need 20% down. You can usually get a better interest rates with even bigger down payments.
Of course there are many other factors that come into play. Credit scores are a great example, as is trying to get a mortgage if you already have more than 4 mortgage loans.
While 20% down payment is a lot of money, the investment in rental property at today’s prices should realize you double digit returns… and that is a LOT better than the banks are giving you to leave it sit in their vault!
How Global Unrest is effecting YOUR mortgage interest rate
Mortgage loans are not immune to global unrest. The interaction between stocks, and bonds is always very interesting… Global unrest = better interest rates!
New Mortgage Lender Rules to COST Consumers Significantly More after April 1, 2011
The Frank / Dodd financial reform law, and new rules forced upon lenders from the Federal Reserve are going to have serious negative impact on home buyers everywhere. More costs, higher rates, less options, and poor service are all on the horizon.
Read the full story… http://fb.me/VjOQ4KKP
Mortgage interest rates, oil, and food prices all pushed higher because of fear and uncertainty.
Read more on how this effects you.
Shopping and reviewing web sites for MN real estate, mortgage loan, and interest rate information is great, but when the
St Paul, MN: Mortgage interest rates are currently at historic lows. Your mailbox and the airwaves have become full with mortgage companies competing for your business. Many of these advertisements are for “No Cost” or “No Lender Fee” loans.
Are No Cost Loans a Deal? For most people, usually not.
One of the most confusing areas for consumers in a mortgage loan transaction are closing costs. Here I’ll explain the advantages and disadvantages of the highly advertised “no closing cost” or “low cost “loans.
First and foremost, there is no such thing as a NO Closing Cost Loan! Everyone knows there are costs associated with getting a mortgage loan; appraisal, credit reports, state taxes, county recording fees, title companies fees, lender fees, escrows, and more. Someone has to pay these fees, and it is always YOU. How you pay them is what this article tries to explain.
Homeowners in Minneapolis, St Paul, Madison, Milwaukee, and throughout all of Minnesota and Wisconsin need to understand that in a no lender fee or no closing cost mortgage loan, the lender simply uses “negative” points to offset your costs. In the example below, by having the 5.00% rate (versus the 4.5% rate), you can reduce (or offset through interest rate) $5,000 of closing costs. By choosing this option, it appear as if you saved thousands in closing costs. GREAT! But while lower costs always sounds good, you now have a significantly higher interest rate! OK, now what?
No matter what anyone says, a zero cost, or no lender fee loan is NOT automatically a great deal. Although it may sound so much better than adding thousands in closing fees to your principal balance, you have to analyze each individual loan and client situation to determine the benefits. Many lenders speak highly of the “thousands of dollars” you save in fees. They never discuss the fact that you may spend significantly more in interest over the full life of the loan than you ever saved in up-front closing costs! In the example below, you can pay $12,578 MORE for your no cost loan!
FACT: In a refinance loan, the vast majority of people roll the closing costs into the new loan.
View the following chart, then call us. We’ll run your personal numbers. Then you can decide if a no closing cost home loan is right or wrong for you.
|Deal or No Deal?||Most Common /
Most CommonLow Cost Option
Very BAD long-term
|Principal & Interest Payment||$1,038 (+$20)||$1,058 (+ $45)||$1,073 (+$60)|
|Closing Costs On Estimate||$5,000||$3,000||$0|
|Out of Pocket Closing Cost Paid||$0 – all rolled in loan||$0. $2k in rate, $3k in loan||$0. $5k in rate|
|Interest Paid over 5 years||$48,192||$50,271||$52,054|
|Interest Paid over 15 years||$121,743||$127,744||$133,002|
|Interest Paid over 30 years||$172,932 ($373,935)||$182,215||$190,491 ($386,513)|
OK, so you are looking at the math, and maybe say “this isn’t so bad”, especially if you are in the home under 5-years.
ANY LENDER who sells the no cost mortgage simultaneously sells a client into becoming a “serial refinancer,” which is not looking out for the client. They are “churning” the client and raking in fees year after year by fooling you into refinancing constantly at “no cost”, but always moving you BACKWARDS into a new 30-year loan. How many times have YOU gone backwards?
Factor in the monthly payments on all those additional “backward years” on all those “no cost” refinances, and that “biggest no brainer in history” no closing cost loan has actually cost you dearly.
Churning of home owner mortgages is illegal in most states
I hope this article has helped you to understand the varied measures used to determine the advantages and disadvantages of zero cost loans. Each borrower is different, and the evaluations must be made on a case-by-case basis. As you can see, there are many factors to consider when looking at the available options. With us as your personal Mortgage Consultants, we will be able to answer all of your questions, outline the costs and benefits, and even give you a few new ones to consider!
While everyone’s individual financial situation varies, let us show you the math so you make the correct choice. Of course, if a zero cost loan makes sense for your case, we will be happy to do one for you.
DID YOU KNOW? Not all Loan Officers are Licensed!
Buying a home? Need a home loan? You call the various banks, brokers, and mortgage lenders shopping for the best deal, thinking this is the correct way to get a mortgage loan. Unfortunately, you’ve only did half of your homework, as the big issue is NOT where you get your mortgage from, but WHO you get your mortgage from. There are major differences in the quality, education, and experience between Loan Officers, and you DON’T want to be working with the wrong person.
Until recently, most Loan Officers got their training simply by being hired, given a desk, a telephone, and the employer saying “Watch and learn from this guy.” There were no schools, no classes, no educational or background requirements. A very small number of Loan Officers would take voluntary classes to be the best they could be (like myself), but this was the exception, not the rule.
As of January 1, 2011, there are two distinct classes of Loan Officer. Those with or without a personal license. Those WITH a personal license must have pre-license education, pass a difficult Federal test, pass a difficult state test for every state they wish to conduct business, criminal background checks, personal credit report checks, and having continuing education every year thereafter. Those without? No requirements at all (yikes!)
Furthermore, those WITH a personal license, YOU CAN LOOKUP ONLINE to verify their license, the company they work for, the company license, what state(s) they are license, any disciplinary action, and where they have worked for at least the past 10-years. The system is called The Nationwide Mortgage Licensing System and Registry (NMLS). The NMLS Consumer Access web site is a fully searchable website that allows the public to view information concerning state-licensed companies, branches, and individuals.
Those Loan Officers who have a personal license are required to place their NMLS number on all materials; web sites, brochures, business cards, E-Mail, etc.
Finally, THIS IS A CLEAR REASON why people should follow my other mortgage shopping rule: GOOGLE THE NAME OF YOUR LOAN OFFICER, and check them out in the public NMLS registry. What do you find before allowing them to handle the largest financial transaction of your life!
Be Smart – Get Answers. Your financial future is too important to gamble with than to simply use the guy at the bank, or the person giving you a low quote on some web site!
Joe Metzler with Mortgages Unlimited. Web site shopping versus live mortgage expert
No web site replaces and experienced Loan Officer. Apply with us today for your Minnesota or Wisconsin Home Mortgage Loan
Mortgages Unlimited. 2011 is our 20-yr anniversary and an article in the Minneapolis Star Tribune says we offer the best interest rates.
Zero Down Payment Home Loans for first time home buyers are back in Minnesota with the new AFFORDABLE ADVANTAGE program.
Learn all about The City Living Program in Minneapolis and Saint Paul. River walks, people, fine dining and concerts. And that’s just the beginning.
From condos and lofts in downtown to charming homes in historic residential neighborhoods, the Twin Cities area has much in the way of housing options that allow you to enjoy all that major cities have to offer.
With City Livings loan programs, the reality of urban living and home ownership is not far away. Home buyers accessing this First Time Home buyer Loan may qualify for a below market interest rate may also be eligible for Down payment and Closing Cost Assistance. As a borrower, you can choose from two market mortgage interest rates; one rate comes with a Down Payment Assistance Grant (DPA) of either 2% of your new homes purchase price, while the other rate is without the grant (Non-DPA).
This program is made available by the cities of Saint Paul and Minneapolis, and is available for homes within the Minneapolis and St Paul City limits.
General Program Information and Qualifications
Apply online and be ready to go!
Details and Info on the Dakota County First Time Home Buyer program for Dakota County MN. Eagan, Apple Valley, Burnsville,
About the Metzler Mortgage Group at Mortgages Unlimited. Why we are a great choice for getting your home mortgage loan.