Buying a duplex, or multi-family home

Buying a duplex or multi-family home.

Minneapolis, St Paul, MN: From a duplex or multi-family home owner’s perspective, buying a multi-family property can be especially appealing because you can live in one area of the building and collect rent from the tenants living in the other area of the building.

What you’ll find is that a multi family home can actually help both your short term and long term finances. For example, let’s say the mortgage loan on a triplex is $1800 per month, but you can rent out the other two units for $2,200. You’re essentially completely covering the loan, and making $400 to boot. Cool…

Not all properties work out this nicely, but even if you could cover 75% of your mortgage with the other units… how nice is that?

Multi family home

Not only does this save you money on your personal housing expense, but it can also help you build equity much quicker if you choose to make larger payments because of the rent you collect.You get your own home and an investment property all in one.

With an FHA loan, you can buy a duplex, triplex, or 4-unit property with as little as 3.50% down payment.

If you want to buy a true investment property that you will not live in, your required down payment will be a lot larger.

Contact our loan experts at (651) 552-3681, or online at www.MortgagesUnlimited.biz.

There is never any obligation for us to review your situation and options.

Equal Housing Lender. NMLS 225504


New 3% down payment option for home buyers

Minneapolis, MN: We all know one of the biggest obstacles to buying a home is the lack of down payment.  Many first time home buyers have the credit, and income to handle their own home, but just can get over that down payment hurdle.

FHA Home Loans have always been a popular first-time home buyer choice, because the program only requires a 3.50% down payment.

3% down payment home ready, homepossible, homeone loan

Both Fannie Mae (HomeReady) and Freddie Mac (HomePossible) have just 3% down conventional programs. These existing programs have both income guidelines based on the properties location. You must also be a first time home buyer, which is defined as someone who has NOT owned a property in the past three-years.

Both HomeReady and HomePossible require the buyer to take first time home buyer education classes, and for doing so, you get a slightly better interest rate, and slightly cheaper monthly mortgage insurance rates. If you meet the qualifications for these programs, they are both pretty awesome deals.

But if your income is too high, or if you’ve owned a home in the last three years, you still have a low 3% down payment program offered by Fannie Mae, that has been around for a few years.

Freddie Mac has just announced their version of the 3% down payment program for everyone, which they are calling HomeOne. The program starts July 29, 2018.

Very similar to Fannie Mae’s program, the new Freddie Mac program does NOT have any income or geographic restrictions, and it is not restricted to first time home buyers. The program is only available for single family (one unit) properties.

Home ready, Home Possible, Home One loan applicationAs with all home loan programs, the new HomeOne mortgage down payment requirement is just one of many aspects used to determine loan approval, including credit scores, debt ratios, property, and overall ability to safely afford the home payment.

 

We lend on these programs in Minnesota, Wisconsin, and South Dakota. Just complete the quick and secure online application to determine if HomeReady, HomePossible, and now HomeOne is right for you!.

 

 


The closing costs are 3% myth debunked

I just heard it again, a Real Estate Agent saying average closing costs to obtain a home mortgage loan in Minnesota are about 3%.

This simply is way too broad a statement about actual closing costs.

As an actual Minnesota mortgage lender for the past 26-Years, the perception that mortgage loan closing cost are about 3% in MN has never been really accurate. This gets spread around primarily because a conventional loan only allows for seller paid closing costs of 3% ( FHA Loan is 6%: VA Loan is 4%, convention is 6% with a large down payment ).

About 1/2 of closing costs are a set cost regardless of purchase price. The other 1/2 of closing costs are based on the purchase price. Take an appraisal for example, a $500 dollars appraisal cost is about 1% of a $50,000 Loan, but only .1% of a $500,000 Loan. Another example is the title company closing fee, which is now around $400. Again, regardless of purchase price., but can make a big difference in the overall cost percentage.

So lower priced homes tend to have costs of 4% to 5% of the price, while upper end homes tend to come in closer to 2% of the price.  Therefore getting 3% seller paid costs falls short of the real costs for many buyers.  These examples assume full closing costs and pre-paid items (taxes and insurance).

To make up the difference, lender can, and commonly offer you other options, like a no loan origination cost lan, or even total no closing costs loans. We also can do something called ‘lender credits’ to reduce out of pocket closing costs. While these options sound great, they are all achieved by increasing the interest rate. Therefore you pay costs over time, versus up-front today.

That is the same when asking for seller paid closing costs. You are paying over time, versus out of pocket today.

Finally, there is absolutely nothing wrong with any of these options. They just need to be understood and analyzed to see what is best for you.  A good Loan Officer will explain and go over all these items once we see a full application, and understand your financial position, amount of cash you have to pay for down payment and more.

Property understanding all these items, then working together with a great agent to property structure your offer will make sure you get a great overall deal on your dream house.

Be sure to ask your Loan Officer plenty of questions, and be sure you carefully pick the Loan Officer who will be handling your largest financial transaction of the average persons life.

If you are buying a home in Minnesota, Wisconsin, or South Dakota… I can be your Loan Officer.  Contact me at (651) 552-3681 or JoeMetzler.com.

 


MN FHA streamline Refinance Loans

Learn About Your Streamline Refinance Mortgage Options

FHA Refinance

FHA Home LoansHomeowners enjoy the benefits of investing in their property year after year. For some, there comes a time when that investment can come in handy. Refinancing with an FHA loan can prove to be an effective way to put that equity to work. Keep in mind that FHA refinancing is only available to homeowners who are currently using their home as their principal residence.

FHA options to homeowners who are considering an FHA refinance mortgage:

FHA CASH-OUT REFINANCE

This refinancing option is especially beneficial to homeowners whose property has increased in market value since the home was purchased. A Cash Out refinance allows homeowners to refinance their existing mortgage by taking out another mortgage for more than they currently owe.

FHA STREAMLINE REFINANCE

This refinancing option is considered streamlined because it allows you to reduce the interest rate on your current home loan quickly and oftentimes without an appraisal. FHA Streamlined Refinance also cuts down on the amount of paperwork that must be completed by your lender saving you valuable time and money.

Click to apply online for your FHA Streamline Refinance
Apply today – FHA Streamline Refinance – For properties in MN, WI, SD

FHA Up Front Mortgage Insurance Premiums (UFMIP)

FHA has recently made changes to the required mortgage insurance. June 11, 2012 is the date FHA Up Front Mortgage Insurance Premiums (UFMIP) will be lowered for some borrowers applying for FHA Streamline Refinance Loans. An FHA Mortgagee Letter 12-4 explains the changes, which affect some, but not al, FHA streamline refinancing loans:

For all FHA Streamline Refinance transactions that are refinancing existing FHA loans that were endorsed on or before May 31, 2009, the UFMIP will decrease from 1.75 percent to just 0.01 percent of the base loan amount.

Basically, those borrowers who have an FHA home loan for a single-family property that was endorsed on or before May 31, 2009 are eligible for a lower rate on their Up Front Mortgage Insurance Premiums. It’s important to note that this rule applies only to those with an FHA Streamline refinancing loan with a case number assigned on or after June 11, 2012.

The same mortgagee letter contains another announcement; “Decrease to Annual Mortgage Insurance Premium on Certain Streamline Refinance Transactions”. In this message, the FHA states, “For all Single Family Forward Streamline Refinance transactions that are refinancing FHA loans endorsed on or before May 31, 2009, the Annual MIP will be 55 basis points, regardless of the base loan amount.”

These two items make for a very significant savings on FHA streamline refinance transaction here in Minnesota, South Dakota, and Wisconsin where I lend, along and the rest of the country.

FHA Approved lenderOne other item. It’s important to remember that the FHA does not regulate FHA interest rates or  FHA streamline interest rates or set them in any way, except to state that such rates must be reasonable and customary according to the housing market in that area. Borrowers should expect to negotiate interest rates with the lender and/or comparison shop for the best rates and terms.

———-

We are an FHA, VA, and USDA Loan Approved Lender. While we offer these loans, we are not acting on behalf of, or under the direction of The Department of Veteran Affairs, HUD, FHA, The department of Agriculture, or the Federal Government. FHA (HUD) does not lend directly to the public, but only through approved lenders like us here at Mortgages Unlimited. We are proud to help families buy or refinance their homes with FHA loans located in Minnesota, Wisconsin, and South Dakota.