Use your tax refund for down payment

Minneapolis, MN: One of the biggest reasons people don’t buy a home is the lack of down payment money.

We get it. Saving is hard. Tax refunds therefore are popular tools for first time home buyers.

Big refunds or small refunds may be just enough to get you into your own home this year. Don’t assume you won’t have enough even with your refund. Down payment requirements may be smaller than you think, and down payment assistance is also available to those who qualify.

Apply online in just 10 minutes, or call (651) 552-3681

NMLS 274132. Equal Housing Lender. Serving all of Minnesota, Wisconsin, and South Dakota.


VA Loans

Approved VA loan lender in MN, WI, SD

A VA loan is perhaps the most amazing loan in the housing market today!

Minneapolis, MN: Rather than issue loans, the VA instead pledges to repay about a quarter of every loan it guarantees in the unlikely event the borrower defaults. That guarantee gives VA-approved lenders greater protection when lending to military borrowers and often leads to highly competitive rates and terms for qualified active duty personal and veterans.

VA Loan Solutions Right For You!

Whether you’re buying your first home with a VA loan, or you’re an experienced buyer using your VA benefits again, we have the right VA loan for you!a home lending solution just for you.
Get a No-Obligation Rate and Closing Cost Analysis!
VA Loans MN, WI, SD

Benefits of VA Loan

Far and away, the most significant benefit of a VA loan is the borrower’s ability to purchase with no money down. Apart from the USDA Rural Development loan, there are essential no other nationwide mortgage loan programs that offer 100 percent financing. 

VA loans are also a bit more liberal in the underwriting standards and requirements than many other loans. For example, allowing for lower credit scores than conventional loans. These loans also come with no monthly mortgage insurance (PMI), a added expense that other loans require borrowers to pay unless they put down at least 20 percent of the loan amount. 

VA loans offer a few other bells and whistles:

  • Down payment as low as 0% up to $484,350 in MN, WI, SD (where we lend).
  • Interest rates that are routinely lower than conventional rates
  • No prepayment penalties
  • Higher allowable debt-to-income ratios than for many other loans
  • Streamlined refinancing loans (called an Earl) – IRRRL loan with no appraisal needed
  • Cash out refinance – Get up to 100% of the homes appraised value. Use the money for anything you wish!

Realtor’s are wrong about VA Loans

Unfortunately, many Real Estate Agents have a unrealistic negative understanding of VA home loans. If you are making an offer on a home with a VA, many agents will improperly advise the sellers to select other offers over a VA loan offer.

Not only is discriminatory, it is flat out wrong, and usually based on old wives tales past around the real estate agent world, versus actual experience from the agent.

If your Real Estate Agent talks negatively about a VA loan – FIRE THEM – IMMEDIATELY!

I ALWAYS contact the listing agent personally when you submit your offer to see if they have any illogical feelings towards VA loans, and if they do, I set them straight!

Second VA Loan (or 3rd, 4th 5th…)

After getting one VA loan, often veterans think they can’t get a second VA loan. That’s not true. Your VA home loan benefits can be used over and over again. In fact, you can actually have two or more VA loans at the same time. If a VA lender has turned you down for a second VA loan you shouldn’t give up. A second VA loan is allowed by the Veterans Administration!

VA Loan Application

Click to start your VA loan application for homes in MN WI SD
Click to start your VA loan application for homes in MN WI SD

Ready to get started with your VA Loan? We make it easy. Most people start by completing the online application. It only takes about 15 minutes, and all the information you need to complete the application is in your head, No need to go find documents, or look up anything at this stage.

You can always call our local VA loan Experts at (651) 552-3681.

Finally, you can schedule an office appointment at our St Paul location, or schedule a telephone application. Just click the scheduling link, along with a day and time that works best for you.

The Department of Veteran Affairs requires mortgage companies who offer VA Loans go through a stringent approval process. We are a VA approved mortgage lender and are proud to help military families use their VA Loan Benefits for home located in Minnesota, Wisconsin, and South Dakota. We are not acting on behalf of, or under the direction of the VA or the Federal Government. The Veterans Administration does not lend directly to the public, only through approved lending institutions like Mortgages Unlimited. NMLS 274132. Equal Housing Lender.


Why smart mortgage shoppers don’t get burned, and other do.

Minneapolis, MN: I get it. You are buying a new home, or refinancing your existing home mortgage, and are looking for the best mortgage interest rate. But buyer beware, the internet is full of places to avoid.  So here I’ll give a little primer on the process, along with some common lender games, and show you why smart mortgage shoppers don’t get burned, and other do.

BASICS OF MORTGAGE LOANS

The most important shopping tool is to understand how the mortgages work, from mortgage interest rates to closing costs.

UNDERWRITING GUIDELINES

First, we all underwrite to the same guidelines. FHA loans are FHA loans, VA loans are VA loans, and conforming conventional fixed rate loans are conforming fixed rate loans regardless of where you get the loan. So one lender over the next is meaningless in terms of the vast majority of loan approvals.  Conforming conventional loan means the loan is underwritten to Fannie Mae or Freddie Mac guidelines. Conventional loan just means it is not a government backed loan.

So technically all lenders are equal – but they are not. There is something known as individual lender overlays. This is where some lenders add they own additional rules to the standard guidelines. The most common overlay is a credit score overlay. For example, FHA rules say lenders can offer the small 3.50% down payment of an FHA loan all the way down to a 580 credit score, but because of risk, many lenders will not go below a 620 credit score. So if you are a weak 585 credit score FHA loan client, one lender over another may make a difference.

MORTGAGE INTEREST RATES

Lenders don’t just make up interest rates. Calling around to a lot is just a waste of time, when shopping just a few is all that is needed to give you an idea of where the real rate market is currently at.

low mortgage interest rates

Mortgage interest rates are determined by one item, the mortgage backed security market. All lenders base daily rates off the exact same MBS bond market on the same day at the same time. If my rates go up, so does everyone else. If my rates go down, so does everyone else.  There are many factors that go into determining how the mortgage backed securities move everyday. I’ll save that for a different article.

Just understand that essentially this means we all pay the same wholesale rate for the money, and the only real difference is the margins needed by different lenders.

LENDER MARGINS

So if all lenders start at the same point, its all about the margins.  As one can expect, this means the most lean and mean company needs smaller margins, and therefore passes along the best real interest rates to consumers and still maintain a sustainable profit margin.

Fat companies, with too many layers of management, too much brick and mortar buildings to pay for, expensive all day everyday advertising, and even stadium naming rights all have to be paid for. The only way they can do that is to have higher margins, and those higher margins translate into higher mortgage interest rates for consumers.

LOAN CLOSING COSTS

This is another area of huge consumer confusion. ALL LENDERS essentially have the exact same closing costs!  How mortgage lenders, banks, and mortgage brokers present that to you can vary greatly, leading to consumer confusion.Real estate

First part of understanding closing costs is understanding the biggest percentage of closing costs are not even the lender, but rather all the other parties involved.  Appraiser, credit bureau, title companies, state taxes, county recording fees, pro-rated property taxes, home owners insurance, and more.

The actual lenders have costs too, which generally are loan origination, processing, and underwriting costs.

HIDING COSTS

If you’ve done any mortgage shopping whatsoever, you’ve gotten plenty of different interest rate and closing costs quotes. When one lender has significantly high or lower rates, or higher or lower closing costs – it generally is just about presentation.

The lower the interest rate, the higher the closing cost. The lower the closing cost, the higher the interest rate.

A common difference is many lenders will quote a rate based on you paying all normal closing costs, plus the industry standard 1% loan origination fee. Many other lenders quote without charging a loan origination fee, giving the appearance of lower closing costs. Some going as far as making silly claims, like they don’t charge that, or they will waive it “just for you.”

But deep think about that. Loan origination goes to the lender to cover the cost of originating the loan, from Loan Officers, and a significant amount of back office staff, to rent, phones, and more.  So you think they are working for free?  Of course not.

Here is how it actually works.

On most days, paying or not paying loan origination up-front equates into a 1/4% rate difference on a conforming fixed rate loan. This can vary depending on the market, but holds true most days.

Assume this two different quote example:

Lender A) A quote of a 5% interest rate on a $200,000 loan, with 1% loan origination ($2,000).

Lender B) A quote of a 5.25% interest rate on a $200,000 loan, with no origination (appears to be a $2,000 savings, but rate is higher).

Neither one of those quotes are automatically good or bad. They are just options.

If you have the up-front money today, and you are going to be in the home a long time, paying loan origination and obtaining a lower interest rate is smart. On the other hand, if you are tight on cash today, opting for lower out-of-pocket costs today by taking the slightly higher interest rate may be a good option.

I always explain these rate and cost options to my clients, but I know many mortgage companies, mortgage brokers, and banks don’t. It’s your loan, your money, your payments… You pick what is best for you – but you have to know there are options.

MORTGAGE SHOPPING TIPS TO AVOID BEING FOOLED

The first tip is education.  Reading this article has already made you smarter than most when shopping for a mortgage loan.

The rest of the tips include only using someone local. There is nothing on the internet you can’t get from the person down the street.

Avoid big banks and big internet companies with lots of overhead.

Statistically, using your local mortgage broker will always get you the best deals.

SCAM QUOTE EXAMPLES

While it is better today that it was years 15-years ago, the market is still ripe with slight of hand quoting.  I’ll give two recent example I’ve run across.

Example 1) Client was shopping standard 30-year fixed rates. Client was quoted an interest rate a full 1/2% lower than my fixed rate quote, along with no loan origination costs. Knowing that was completely impossible, but digging deeper, we discovered the other lender was actually offering a 5-year adjustable loan, but he kept saying “it’s a 30-year loan.”  Clients mind kept hearing 30-yr fixed, when it clearly wasn’t!

Example 2) A well know big internet lenders who is pretty Quick, and has Rockets. Client was looking on their web site at posted interest rates, which looked competitive to mine. Being down this road many times before, I had the client go back to their web site, but this time scroll down to the rate disclaimers. Here I showed him that while they showed the same physical interest rate, it clearly showed that to get that rate from them assumed a 75% loan-to-value loan (25% down), and would cost an additional 2.125% in points.  Each point is 1% of the loan amount.  So with the “same” mortgage interest rate, their closing costs were 2.125% HIGHER than mine.

DON’T GET BURNED BY THE SMALL PRINT!

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We lend in Minnesota, Wisconsin, and South Dakota – and we’d love to be your lender.  Call (651) 552-3681, or just apply online at https://joemetzler.com/application.  NMLS274132. Not an offer to enter into an interest rate lock agreement.  Not everyone will qualify. Equal Housing Lender.







Veterans Day 2018 is Nov 11th

Veterans Day 2018 is Nov 11th.

One of your most amazing benefits for your service is the VA Home Loan.

Why are VA loans so good?

  • No down payment on loan under $453,100 (in most parts of the country)
  • Small down payment over $453,100
  • No mortgage insurance (big savings)
  • Lower VA interest rates than conventional loans
  • Federally mandated lower closing costs
  • Mandate to assist the veteran if they get in trouble on the loan
  • Loan is assumable

We are proud to offer VA loans for homes in Minnesota, Wisconsin, and South Dakota.  Visit https://VAMortgageMN.com for more info, or to apply online for a VA loan.

Thank you for your service.

VA lender in MN

Equal Housing Lender. NMLS274132
#Minnesota #Veterans #Army #Navy #AirForce #Marines #VALoan







Get Pre-Approved Before You Start Looking

Get Pre-Approved Before You Start Looking for a home

Minneapolis, MN: People often make the mistake of starting a home search without knowing what they actually qualify for. Falling in love with a $400,000 home and finding out you qualify for $200,000 can be heartbreaking. Thinking a loan approval will be easy, only to find out you have issues, or don’t qualify for a program you think you do, is another concern.

Virtually no Realtor will show homes to clients who have not been pre-approved, and virtually no seller will accept any offer without a pre-approval letter for this very reason. Being pre-approved gives both you and the seller comfort that final approval for your loan should be fine.

Pre-approval gives you, your agent, and the sellers confidence in knowing can get a loan, and that you are shopping in the correct price range for your income and payment comfort level.

We recommend getting lender pre-approved about 100 days before you would like to move. For example 100 days before the end of your apartment lease. This give you plenty of time to correct any minor issues that may cause loan approval issues, and plenty of time to find a home without just settling because of time concerns.

Finally, understand there are two levels of pre-approval. The more common one is what is known as Loan Officer pre-approval. This is where only your Loan Officer has reviewed your application information, documents, and credit. Generally this is acceptable in the vast majority of cases, but can be problematic when new or inexperienced Loan Officers make mistakes in their assessment.

Certified Underwriter Pre-Approved from Mortgages Unlimited, Inc
Certified Underwriter Pre-Approved from Mortgages Unlimited, Inc

Mortgages Unlimited goes a step beyond, and also offers full Underwriter Pre-approvals, known as our Certified Pre-Approval. This means your application has been completely reviewed by an actual Underwriter, who has given their blessing on your credit, incomes, etc.  This only leaves us to have to finalize your application on the exact home when you find it (purchase agreement, appraisal, and title review).

Certified Pre-Approval  is significantly better than a basic pre-approval, and gives you a distinct upper hand when negotiating on your dream home – especially if you are in a multiple offer situation.

To become pre-approved for a home loan on properties in Minnesota, Wisconsin, or South Dakota, please fill out our secure online application, or call (651) 552-3681 to apply over the phone, or to schedule an in-office appointment.

Get pre-Approved for your home mortgage loan in Minnesota, Wisconsin, South Dakota
No Obligation to apply, and see what YOU qualify for.

 







Bank statement loans = YES

Minneapolis, MN:  Not every potential home owner fits the cookie cutter guidelines for most traditional loans, like standard 30-yr fixed rate loans backed by Fannie Mae or Freddie Mac, or standard government backed loans like FHA Loans, VA Loan, or USDA loans.

The mortgage industry had plenty of alternative options back in the day, including bank statement loans, stated income, no proof of income loans, asset based program, and more, right up until the housing crash in 2007.

Government mandated changes after the housing crash left many home buyers needing these alternative loan programs with no loan options whatsoever.  Slowly, the non-conforming loan industry is making a comeback, albeit looking much different than years ago.

Stated income loans existing, but are super restrictive. No doc, or no proof whatsoever of income loans do not exist. The most popular alternative documentation loan option that HAS returned is using your bank statements as qualifying income.

Bank statement loans

These bank statement loans come in many varieties, but generally consist of the following basic requirements:

  1. Must be self employed
  2. Use 100% of personal bank statement deposits as income
  3. Use 50% of business bank statement deposits as income
  4. Higher credit scores
  5. Loans of 80% loan-to-value or less
  6. Interest rates 1% to 2% higher than standard loans.

There is no one set of rules, like you find with standards loans that all lenders use for things like FHA, VA, Fannie Mae, Freddie Mac, etc. Because of this, you will find all sorts of variations between lenders offering bank statement loan programs.

But the good news is that at least there are some options again for those home owners who don’t fit the traditional loan model.

We offer bank statement loans for properties located in Minnesota, Wisconsin, and South Dakota. Click here to apply online or feel free to contact us at (651) 552-3681.

Click to apply online

Equal Housing Lender. NMLS 274132. Not everyone will qualify. Not an offer to enter into an interest rate lock agreement. iMortgageJoe.com







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!.

 

 







Is your Loan Officer State Licensed, or simply Registered?

Is your Loan Officer State Licensed, or simply Registered, and how can you tell?

You are about to do the largest financial transaction of your life, a home mortgage loan. What do you know about the person handling it, the Loan Officer?  For most people, the answer is basically nothing, and that should scare you. Many people assume the person answering the phone is a  licensed Loan officers, but this simply isn’t true the vast majority of the time.

While all companies offering mortgage loans must have a license, until the passage of the SAFE ACT in 2008 in response to the housing industry collapse, few Loan Officers had a personal license.  This wasn’t generally a huge problem until the real estate boom began in earnest around 2000, when it seems like everyone was a home builder, a Real Estate Agent, or a Loan Officer with zero schooling, training or experience. As we all know, lots of these people ended up creating a a huge mess in their wake.

With the passage of the SAFE ACT, Congress took steps to tighten licensing and training requirements for Loan Officers. All can agree, this was a great step in the right direction.  Unfortunately, Congress blew it by only requiring a small portion of Loan Officers needing to meet the strict new law requirements.

Differences in Loan Officers

Under current rules, Loan Officers at banks, credit unions, or mortgage companies owned by these entities are NOT REQUIRED to have a personal license. Rather, they simply have to register in the Nationwide Mortgage Licensing and Registry System.

Loan Officers at non-depository lenders, like brokers and non-bank mortgage companies are REQUIRED to have a personal license.

Loan Officer License

 

How To Check Out Your Loan Officer

Doing a little research on your Loan Officer is rather simple, with these two steps:

  1. Go to NMLSConsumerAccess.org
  2. Do an Internet Name Search
  3. Your gut feeling

On the Nationwide Mortgage Licensing System and Registry web site, you are able to enter the Loan Officers name.  The system will tell you how long they’ve been a Loan Officer, what company they are OK’d to work for, any disciplinary action, and if they are personally licensed, or simply registered.

Here is a screenshot of my personal NMLS record, which shows I am a Licensed Loan Officer in Minnesota, Wisconsin, and South Dakota.

Here is the bottom part screenshot of a Loan Officer who is simply registered. You’ll notice it says Federal National Loan Officer instead of listing states they are licensed in.

Next, Do an Internet name search in your favorite search engine.

Do you get any hits? What are they? What do you see?  Nothing? One link to a company web site?  Multiple hits on multiple sites?

Does the Loan Officer appear to be highly respected and quoted with lots of links? A great blog with great informational posts? Probably a good sign of a professional. Can’t find anything, or maybe just a listing on the company web site?  Probably not a comforting sign.

Finally, trust your gut feeling.

While being simply Registered doesn’t make someone bad, and being Licensed doesn’t make someone good, it does help you understand more about who you are working with.

If you see they are simply registered, and have been a Loan Officer for six months, that probably wouldn’t be who I would pick to handle my largest financial transaction. Especially as I think back over 20-years ago when I started as a Loan Officer.  I didn’t know anything, and it took years to gain the needed experience.

If they’ve been a Loan Officer for 10-years, but have been at 10 different companies, you should ask why? Keep getting fired?

On the other hand, regardless if they are registered or licensed, do they seem knowledgeable. Do they seem to have your best interest in mind?  Do they return e-mails and phone calls in a timely manner?

Personally I think the choice is clear.

Who would you rather have working on your largest financial transaction. A Loan Officer with a licensed they must maintain or risk losing it, with years of experience, or someone who is simply registered or new?

While true Loan Officers at banks, credit unions, and mortgage companies owned by banks and credit unions are NOT required to have a personal license, and many will tell you if you ask about their background how they are not required to have a license. Understand there is nothing preventing them from obtaining one. My opinion is if they really are professionals, prove their dedication to the industry by obtaining a personal license and giving the client a level of comfort.

If you are buying a home or refinancing a home in Minnesota, Wisconsin, or South Dakota, and you’d like me to handle your home loan, call me at (651) 552-3681 or just click on this link to Apply Online.

 

 







Rehab Loans to Buy and Fix a home

Can you get rehab loans to buy and fix a home?  

YES

There is no doubt that the current real estate market offers a lot of great bargains on short-sale, foreclosed, and homes in need of some tender loving care. However, many of these homes are in less than perfect condition. Many just have simple cosmetic issues, like ruined carpet, or in need of painting. Others need a new roof, or the previous owner vandalized the house, leaving them with missing cabinets, or missing appliances.

Standard mortgage loans don’t let you financing these homes, but our specialty renovation loan programs do.

These programs allow buyers to purchase a home and roll the cost of repairs or property improvements into the mortgage loan with as little as 3.50% down payment. The new loan is based on the value of the property after the repairs or improvements are completed.

We offer all three major renovations loans. Both the FHA 203k streamline rehab loan, the Full FHA 203k loan, and the HomeStyle Renovation conventional loan.

The programs are also available to refinance and fix up your existing home too.

See how this specialty loan program can help YOU find a home that may be outdated or need some minor improvements to make it the perfect home and get that home in a great neighborhood.

We lend in MN, WI, and SDContact us today at (651) 552-3681 to see if you can qualify for a REHAB PURCHASE AND FIX loan program, and move into the home of your dreams.

Learn more at https://JoeMetzler.com/203k

NOTE: This is NOT available for investors looking to fix and flip homes. That is a different program.

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Ready to get started?

It’s easy. Simply complete the Online application.  You’ll be applying directly with me, Joe Metzler, an experienced, multiple award winning Loan officer with over 20-years in the the business. We lend in MN, WI, and SD. Learn more about me HERE.

 







First Time Home Buyer Class in MN

MN First Time Home Buyer Classes

Minneapolis / St Paul, MN: Buying your first home can be a fun exciting time. It can also be stressful, especially as there is a lot of misinformation spread from well intended friends, family, and even Real Estate Agents.

When it comes to first time home buyers, they are usually told about special programs for first time buyers, and classes you need to take. The first thing to understand, is most mortgage programs DO NOT REQUIRE a home buyer education class, UNLESS you are getting down payment assistance.

Most people don’t want to take a class unless necessary. Therefore we generally suggest you complete a full Loan Application for review to determine if you need a class. There are never any obligations to review your situation.

Free good faith estimate

The second major thing to know is that IF you DO need to take a class, you need to take the correct class. Almost ALL classes put on by a Real Estate Agent, Bank, Credit Union, or Mortgage Company are really only marketing gimmicks designed to get you introduced to those people, so you hopefully use them as your Real Estate Agent or Loan Officer. These classes DO NOT COUNT and should be avoided.

Here in Minnesota, like most other states, to obtain down payment assistance as a first time home buyer, you ARE REQUIRED to attend a Minnesota state approved 8 hour home buyer education class. This class is mandatory for programs like the Minnesota Housing Finance Agency (MHFA) Start Up loans, Dakota County First Time Home Buyer, City Living, and many other programs where you get assistance.  The class is also required to get reduced monthly mortgage insurance with the HomeReady conventional 3% down payment program

This class can be taken online, or in person at multiple locations across the state. There are different costs for each class ranging from as low as $25 to $75 per household. Only 1 borrower is required to attend.

Minnesota Only

The official required class is a NO PRESSURE, NO OBLIGATION class. No software, books, or anything else to buy. They will teach you about making good decisions in your future home buying experiences, and provide great information about the qualifying process, improving your credit score, and much more. There is no better way to learn about being a First Time Home Buyer in Minnesota than to attend AN APPROVED home buyer education class.

Upon completion of the class, you will received the required completion certificate that you need to give to your Loan Officer.







Why do mortgage lenders need your bank statements?

Why do mortgage lenders need your bank statements?

Minneapolis St Paul, MN: When taking out the largest loan most people will ever have in their life, a home loan, your Mortgage Loan Officer is going to ask a lot of questions, and request a lot of supporting documents, like pay stubs, W2’s, tax returns, and your recent bank statements.

Providing all this documentation really should be pretty easy for most people, yet it also causes a lot of frustration. Most people don’t get pay checks handed to them anymore, just as many people don’t get banks statements mailed to the home either. So here starts some of the annoyance issues right away for some people, while others quickly and easily access the documents online.

Your lender wants actual pay stubs, and actual bank statements, like what would be mailed to the home. Many people send simple screen shots, which simply doesn’t work. Most online accounts let you print real statements and real pay stubs, you just need to look around to find them.

Generally, most mortgage loan programs only require your two most recent bank statements. We also need ALL the statements pages too. If the statement says “Page 1 of 3”, and the last page is just advertising, we still need it.

Underwriters are also looking for lots of other things in your bank statements too, including:

Cash-to-Close

When the mortgage company looks at your bank statements, the most obvious thing they are looking for is do you have the money in the bank to cover your down payment and closing costs, also known as ‘cash-to-close.” Do you have it all today?  What is your average balances?

If your last two months bank statements show $500 balances, but you need $10,000 for down payment, where is it coming from?

Non-Payroll Deposits

Any large, obviously non-payroll deposit needs to be documented. What is it, where did it come from?  Is is a loan that needs to be paid back? Is it a gift? Is it your tax refund?

Large deposits is one of the biggest headaches for both the lender and the applicant, and depending on the answer, can be no big deal, require a little bit of paperwork to prove where it came from, or can actually be a deal killer.

A common problem is many people have large sums of cash at home, then deposit in the bank. As weird as it sound, that cash deposit is NOT an acceptable source of money for your down payment, and needs to be in the bank account at least 60-days before it can be considered usable money for your down payment.

So what is a large deposit?

Most lenders consider a large deposit any non-payroll deposit that is more than 50% of a applicant(s) monthly income for conventional loans, and more that 1% of the purchase price of the home for an FHA loan.

Bouncing Checks?

Yes, we care if you are bouncing checks. It shows how you manage money.

Let’s say your current rent is $1,000 a month, and you consistently bounce checks. Your potential new house payment is $1,400 a month. You can’t manage your account with rent at $1,000 a month, how are you going to be able to handle a $400 increase in your housing costs?

Undisclosed Debt

On the loan application, you are supposed to disclose all recurring debt. The reality is mortgage lenders generally just merge in the debt showing on your credit report. But a sharp eyed Underwriter may catch something on the bank statement and ask a question.

What DON”T we care about?

We don’t care about ATM withdrawals at the casino, and we don’t care about your purchase at the liquor store or Victoria’s Secret. We pretty much don’t care anything about your purchases.

Busy Bank Statements

Busy bank statements is my personal term for people who transfer around money from their various multiple accounts on a regular basis.  This can lead to a lot of headaches in documentation.  I just had a client, where on her bank statement, there was a large deposit. When I asked her where it came from, she said her savings account. Great, now send me the savings account statement.  Once I saw the savings account, there was a large deposit there too. She said that deposit was from a 401k loan.  OK, prove that too.

While she was able to prove and document everything, she also became very annoyed.  I understand, but those are the rules. So if you know you will be buying a home in the next few months, it may be easier to put all the money in one account now to avoid any potential issues with Underwriting.







Minnesota Mortgage Loan Limits for 2018

Minneapolis, MN: Once a year, maximum mortgage loan limits are potentially reset for popular loan programs, including standard conforming loans (Fannie Mae, Freddie Mac), FHA loans, VA loans, etc.

Minnesota, Wisconsin, and South Dakota (the states that I lend in) all have the same maximum conforming loan limit for 2018 of $453,100 for a single family home (higher for multi-unit properties). You can but a more expensive home, but to qualify for these programs, your LOAN AMOUNT must be under this number.

2018 MN, WI, SD Conforming Loan Limits

Loans over this amount are known as jumbo mortgage loan. There is no Fannie Mae or Freddie Mac for jumbo loans, so there are significantly different rules and guidelines for jumbo financing.

VA loans in Minnesota are zero down payment loans up to the same conforming limit of $453,100.  You can but a home with a VA loan over $453,100 – but now you’ll need to have a down payment. Read this information on VA jumbo loan down payments, or I can help you determine your down payment requirements on VA jumbo loans, just contact me at (651) 552-3681.

FHA Loans and USDA loans have different loan amount limits depending on what county you intend to buy the property.  Click here to check current FHA loan limits, and click here to check current USDA loan limits.

A single family home in the Minneapolis / St Paul metro area counties is $356,500 for 2018, but in Stearns county for example, it is only $294,515. Another example would be Dane County Wisconsin, at $299,000. As with conventional loans, all counties have higher limits for duplex, tri-plex, and 4-unit homes.

USDA rural housing loans do not have a house price limit.  Rather, they have an income limit. Click here to review the USDA income limits.

 







The DANGER of automated mortgage pre-approvals via your cell phone

The danger of automated mortgage pre-approvals via your cell phone

Minneapolis / St Paul, MN: Can you really get a mortgage pre-approval online in 10 minutes? Yes. Should you? Probably not. It’s 2018 as I write this, advancements to our lives, along with instant gratification is everywhere. Why go to the store when you get better selection and two day shipping from Amazon. No need for old fashion video stores, everything is on Netflix, Amazon Prime video, or your HBO Go app.  Twitter, Facebook, the internet, and of course Smartphones and iPads have replaced home computers for many people.

So it is no surprise that many mortgage lenders are now advertising instant 10-minute mortgage loan pre-approvals while you stand in front of the house you just looked at. The biggest company pushing these is Quicken Loans ® “Rocket Mortgage”®.

Sounds cool, and their commercials are really funny… But wait a minute… This is the largest financial transaction of your adult life. Can it really be done on your cell phone?

 The Traditional Mortgage Loan Process

The traditional process is you complete a loan application. You do that in person, over the phone, or by completing an online loan application. From there, a real live person reviews the information, pulls your credit report, talks to you about your situation, uses knowledge and expertise to explore all avenues, issues, and different loan options (all good ideas).

Assuming that all looks fine, your application is processed through one of the major AUS (automated underwriting system) of Fannie Mae, Freddie Mac, FHA, etc, to get your initial “looks good” answer.

ffThis automated underwriting system process only takes a few seconds, and with the initial “looks good” answer to your loan application, you got a loan, right? NO, not even close.  This is just AN INITIAL step.

Next, just because the AUS indicates ACCEPT (yes), there are still pages of information and requested items that need to be received and reviewed for accuracy BY ALL LENDERS. Common items are W2’s, pay stubs, bank statements, tax returns. Depending on your situation, you may need further items, like bankruptcy papers, divorce decrees, and more.

You generally need to gather all those documents and submit them to your lender for review to receive a proper Pre-Approval.

PRE-APPROVAL IS NOT A LOAN GUARANTEE

After you find the exact house and sign a purchase agreement, the lender orders the appraisal, title review, and everything else is sent to the underwriter for final review. Generally speaking, a proper professional pre-approval will equal a successful final approval by underwriting in the final stage of the process. A sloppy pre-approval, not properly review??? Scary stuff.

Your largest financial transaction of your life is too important to trust to just anyone, let alone a computer. You need the wisdom and input from a licensed, experienced, and professional Loan Officer.

The Quicken Rocket Mortgage ® 

The difference with their app, is that after taking the initial application information online (like thousands of other lenders), their app jumps right to running your information through the major automated underwriting system to get that initial pre-approval. Yes, that can take just 10 minutes.

Next, they attempt to gather some of your basic supporting documents electronically. Rocket Mortgage ® will ask you to link your financial accounts to their program. This allows them to check your financial statements online without you having to send them the physical copies of your banking information. Again, sounds cool, but in the day of cyber hacking, do you really want to give them access to your information electronically?

Next, a huge portion of applicants are not able to take advantage of instant document verification, and still need to submit many, if not all of their documents the traditional way – completely eliminating the cool factor.

You can also get instant rate quotes, cost quotes, and options like to buy discount points. Again, sound nifty, but…

The first major issue is simple. Garbage in equals garbage out.

I review a LOT of online mortgage applications.  Rare is it that I don’t need to change or adjust any application data before running it though the computers. Data errors, missing data, and income that isn’t allowed to be used for qualifying are all too common.

For example, I recently had a client input $50,000 a year for his wife at a job she has been at for about 9 months. But, as I interviewed him, I discovered that her new job is 100% commission based. Standard underwriting rules for commission based income require the person to have two-years on the job, and that we average the two-years of income.  Therefore her job qualifying income was ZERO.  Oops… Now you are running around with a quick pre-approval looking at houses you will never actually get final approval to buy.

Another recent applicant answer the “Do you pay alimony or child support” question online NO. But when I physically reviewed his pay stub, it clearly showed the deduction for child support. This additional debt lowered the maximum house he could buy $50,000. Again, potentially someone running around with an invalid pre-approval letter.

 The Big Disadvantage of Instant Online Approvals

For as cool as all this sounds, it has huge disadvantages.

First is not having the opportunity to talk to a human loan officer. Consumers may lose out by applying for a mortgage that isn’t necessarily the best choice for their situation. I get clients all the time who complete my online application for one loan type, but I end up switching them to something better suited for their situation. This is because most applicants usually have several mortgage options available to them. Since most consumers are not mortgage experts, this is clearly an area where a human loan officer could help steer their client in the right direction.

Your largest financial transaction of your life is too important to trust to just anyone, let alone a computer. You need the wisdom and input from a licensed, experienced, and professional Loan Officer.

They typically don’t offer first time home buyer programs, and don’t offer down payment assistance programs. This is especially troublesome, as younger first time home buyers are the ones more inclined to think apply on your phone is cool.

Do they have the best interest rates and lowest closing costs?  Generally not, and sometimes, especially on government loans, like FHA, we beat their rates by a long shot.

The Best Move When Getting Mortgage Pre-Approved?

When buying a home, your best move is to always work with a local lender the traditional way. The guy located in your geographic area, with a local reputation to protect. There is nothing anyone on the internet on the other side of the country can offer that you can’t get down the street.  More often than not, it is just the opposite… Especially when it comes to down payment assistance programs for first time buyers. These programs are always only available from the local lender.

We lend for homes in MN, WI, and SD and would love to assist you

Click to apply online







NO documentation MORTGAGE loans AVAILABLE? Maybe. Alternative? Yes

Minneapolis, MN: Not everyone meets the traditional proof of income guidelines for your standard home mortgage loan. For years, the industry offered all sorts of alternative options, from no documentation stated income loans, where you just told us what you made, but didn’t prove anything, to true No Income, No Assets, no anything loans. Just a good credit score and a large down payment.

These programs served a small niche market, and had been successful for many years.  In the real estate boom years from 2000 to 2007, these long held niche programs became highly abused – resulting in law changes that all but essentially made them illegal to offer.

No documentation loans

Current rules require lenders to prove and document sufficient income to safely afford your loan payment. All your traditional loans deem that to be pay stubs, W2’s, and tax returns.

These rules leave many people out in the cold – especially the self-employed.

What No Income Documentation Loans Are Available Today?

Well, none… for owner occupied homes. For investment properties? Yes.

But there is one big non-traditional offering in the market for owner-occupied home loans, this being bank statement loans. With these programs, in lieu of traditional pay stubs, and tax returns, lenders use the deposits on your bank statements as qualifying income.

True No Proof Of Income Loans ARE available for investment property loans.

Common options include:

  • qualifying on just 12 months or bank statements, but you get better interest rates if you can prove 24-months of statements.
  • Using 100% of your personal bank statement deposits as income, or 50% of business bank statement deposits

Bank Statement Loans

The Down Side

First, there is no standard set of rules for these programs, so the there is plenty of variation between lenders. A good example is that some lenders only offer 24-month programs, or won’t do it at all with lower credit scores.

Expect at least a 10% down payment requirement, but most will require 20% to 25% down payment.

Expect closing costs to run higher than traditional loans.

Finally, as you might imagine, these programs don’t offer the best current mortgage rates. Typically we see these programs run with at least a 2% higher interest rate than traditional mortgage loans.

The Bottom Line

You should always try to be approved for traditional financing. But if your situation doesn’t allow for that, while no a full no documentation loan, at least there is an option to income qualify for a home loan with your bank statements.

Apply for a Bank Statement Loan

We here at Mortgages Unlimited offer a variety of bank statement loan options for properties located in MN, WI, and SD. Call us at (651) 552-3681 to discuss your situation – or better yet, complete the simple ONLINE LOAN APPLICATION right here on this web site.

Click to apply online

The small print: Not an offer to enter into an interest rate lock agreement per MN law. Not everyone will qualify. Equal housing lender. NMLS 274132.







Tips for MN First Time Home Buyers

Minnesota First-Time Home Buyer Tips

Minneapolis, MN: Being a first time home buyer, and buying your first home is an exciting time. There is no reason to be worried, and here are a few tips to help guide the way.

STEP 1:

Find a lender – Get Pre Approved for a Mortgage Loan.

Unless you are paying cash, you are going to need a loan. Finding and choosing the best loan and lender to handle the loan for you should not be taken lightly. Randomly taking to whoever answers the phone at  1-800 Big Bank, or thinking you can get a mortgage in 10 minutes via your cell phone are generally huge mistakes.

Read my whole separate article on Shopping For a Lender

Once you find your Loan Officer, they will review various programs with you, go over your maximum purchase price, payment comfort level, and any other requirements.  Expect to send in a minimum of your Photo ID, last 30-days of paystubs, last two-months bank statements, last two-years W2’s, and at least your last filed Federal tax return.

With a mortgage pre-approval in hand, you can meet with the Real Estate Agent, and know exactly how much house you can afford to buy, so you are not wasting time looking at homes outside of your price range.

Step 2:

Find a Realtor.

As with picking a Loan Officer, picking a Real Estate Agent also should not be taken lightly. As a Loan Officer, my tips for selecting an agent are:

  1. Avoid big real estate ‘teams’ – you never work with the big guy.
  2. Most major real estate company charge extra fees – Pick small independents
  3. Experience matters, A LOT.

Once you’ve selected your agent, they assist you in finding your dream house, negotiating a great offer, walking you through the paperwork, and helping with things like inspections.

TIP:  Did you know that the buyers do not pay anything out-of-pocket for the working with an agent to buy a home. The cost of your agent is paid for by the seller.

 

Make a Home Wants and Needs Wish List.

Make a list of what you absolutely must have in your new home. Number of bedrooms, school district, etc., and let your Real Estate Agent know.  Then also decide on things you can be flexible on. Unless you are building a custom home, no house will be a perfect fit.

Looking At Homes.

Typically your agent will set you up on automated email listing of new homes that fit your criteria.  Especially in the under $300,000 price point, you should look at those emails daily, and if you see something you like, you need to be prepared to drop everything, and go immediately look at the house.  Waiting for the weekend or a day off, and you may have been just beaten out by someone else.

As you look at homes, you may find your wants/needs list can change.  Be sure to pass that along to your agent.

Ready to get started?

It’s easy. Simply complete the Online application.  You’ll be applying directly with me, Joe Metzler, an experienced, multiple award winning Loan officer with over 20-years in the the business. We lend in MN, WI, and SD. Learn more about me HERE.

 







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.