Category Archives: MN First Time Home Buyer

First Time Minority Home Buyers In MN

The minority home ownership rate in MN has declined again which represents a prolonged trend of four years.

Minnesota housing officials state high minority unemployment rates are part of the cause. However the potential for home ownership rebounding because of record low home prices and lending rates.

Almost 75 percent of the state’s households owning their homes making Minnesota among the highest in home ownership rates in the country.

Minority households reached peak ownership in 2003 wtih just over 47 percent which is a hopeful sign that minorities were increasing wealth and entering into home ownership as MN first time home buyers.

However new census numbers illustrate MN home ownership rate for minorities is falling, indicated by Minnesota Housing Finance Agency commissioner Mary Tingerthall.

Home ownership rates dropped from 46.5 percent to 43.3 percent and that trend continued downward in 2010 to 41 percent,” she said.

Unemployment is part of the reason for declining minority home ownership rates in Minnesota. Unemployment in the general population is around 7 percent, but reaches 20 percent and higher for minorities, Tingerthall said.

“That, combined with tougher mortgage qualification standards, I think, has really landed a double whammy for communities of color.”

The MN Home Ownership Center reports there have been 100,000 home foreclosures with median home values decreasing by nearly 1/3.

Median Minnesota home values have plummeted on average by nearly a third.

However one homeowner’s pain is a potential home buyer’s gain, and there are many single family housing bargains at a time when interest rates are at record lows.

Tingerthall says, “It’s true that an average monthly mortgage payment costs more than rent.” However, the rental vacancy rate in parts of Minnesota is very low, and that puts upward pressure on rents.”

“Owners of rental properties will begin to see the opportunity for the first time in several years to raise their rents, so we’re concerned that people will really get caught in the squeeze not being able to qualify for a mortgage, at the same time seeing their rents going up.”

The Minnesota Housing Finance Agency has a program that this year will help slightly more than 2,000 MN first time home buyers. The Minnesota First Time Home Buyer Program helps with up to $8,500 down payment and closing costs and requires that they take housing classes to learn how to care for their property.

First Time Home Buyers In MN

Short sale transactions are becoming less popular among first-time home buyers. Buying a home in a short sale transaction may offer a huge bargain sale prices average 27 percent lower than non-distressed properties but more first-time home buyers say the processing delays aren’t worth the trouble.

Among first-time buyers, their short sale purchase share dropped to 39.7 percent of all short sale transactions in August posting a three-month drop and reaching its lowest share ever recorded for first-time home buyers, according to the latest Campbell/Inside Mortgage Finance HousingPulse Tracking Survey. In November 2009, first-time home buyers share of short sales had reached a peak of 54.1 percent of all short sale transactions.

With bargain deals, why are short sales losing their appeal? Buyers are complaining that short sale transactions take too long to close, with approval times often taking several months after a buyer even submits an offers. Some buyers frustrated at the delays are placing offers on multiple properties, planning to close on whichever one is approved the fastest. The average time on market for short sales is 16.6 weeks, and the majority of that time is spent waiting for short sale approval, the HousingPulse Tracking Survey found.

First Time Home Buyer’s Downpayment Still An Obstacle In MN

Trulia’s Fall 2011 American Dream survey reports more than 1/2 of all renters who would like to buy a home say they are unable to because of down payment requirements.

62% of young adults (18-34 year olds), state that as a first time home buyer, lack of down payment has prohibited them from buying a home. Home buyers aged 35-54 are more concerned with qualifying for a loan because of having poor credit.

From saving enough for a down payment to qualifying for a mortgage and having a poor credit history, today’s aspiring home owners face many financial obstacles in order achieve their American Dream of home ownership,” says Jed Kolko, Trulia’s chief economist. “These obstacles keep some would-be home owners from taking advantage of low mortgage rates. On the other hand, they prevent some people from buying homes they can’t really afford. Government home ownership policies can target some of these obstacles to home ownership, but only stronger economic recovery will help households facing multiple obstacles become better able to buy homes.

First Time Home Buyer & Investor Tax Credit

The National Mortgage Complaint Center is warning of further US residential real estate valuation declines, based on new information related to US foreclosures. The group worries if the US residential real estate markets do not soon stop their declines, a second recession might be a optimistic thing. The group has called President Obama’s, or former House Speaker Pelosi’s attempts to help homeowners in foreclosures, or loan modifications, an utter failure, and a waste of taxpayer money. The group says, “We desperately need to stabilize the US residential real estate markets, and we think restoring the Federal Tax Credit for a home purchase would a huge step in the right direction. However, this time the Congressional Federal Tax Credit should be increased to $15,000, and it should be inclusive of not just first time home buyers, it should apply to every qualified home buyer, including investors.” The National Mortgage Complaint Center says, “With the enormous devaluations we have seen in most US residential markets, we need to stop the hemorrhaging, and do something meaningful to stabilize one of the most vital aspects to the US economy-our residential real estate markets.”

The National Mortgage Complaint Center is urging US House of Representatives Speaker John Boehner to introduce immediate legislation that restores the Federal Tax Incentive Plan for home buyers. However, the group says, “the Federal Tax Incentive Home Purchase Program should not be limited to first time home buyers only. We believe a more robust federal tax incentive plan is called for, to include not just first time home buyers, but all qualified home buyers, including investors. Someone needs to step up to the plate to rescue the US residential real estate markets, and leadership is needed-now.”

The National Mortgage Complaint Center is now warning, “If someone in the federal government does not exert some leadership immediately, it might be too late for the US residential real estate markets, and our economy. We appreciate the concept of free enterprise, and or risk, and return is lost on President Obama, but someone in DC had better start thinking outside of the box now, or it could be too late to do anything about the sinking US residential real estate markets.” The National Mortgage Complaint Center is also warning, “Now would not be a time for the US Congress to allow President Obama, and former House Speaker Pelosi to make an Economic Social Statement, with another insane program that allows individuals not qualified to buy a home, to get one. Now is the time to let the free enterprise system work, for qualified buyers, with tax credits being the incentive for participation.” http://NationalMortgageComplaintCenter.Com

FHA loan limits may change 10/1

Unless Congress extends the expiration deadline, Federal Housing Administration (FHA) loan limits set in 2008 will drop significantly beginning October 1. Congress raised the loan limit amount in response to the housing crisis to help spur the homebuying market. FHA loans offer borrowers very competitive rates and terms, and they only require a 3.5% down payment. Allowable debt ratios are higher than the typical debt-ratio limits imposed for conventional loans, and there are no income limit qualifications, so more people can qualify for them.

If the loan limit drops on October 1, many Minnesota first time home buyers will face higher down payments, higher mortgage rates and stricter loan qualification requirements. Borrowers seeking larger mortgages will have to apply for conventional loans or jumbo loans, which may be subject to higher interest rates and down payments.

LOWER LOAN LIMITS. The conforming loan limit determines the maximum mortgage amount that FHA, Fannie Mae and Freddie Mac can buy or guarantee. If you want to stay under the current loan limits, purchase now and close by September 30th.

MORE STRINGENT REQUIREMENTS. FHA loan requirements may allow for lower credit scores. So an applicant with a lower FICO score can still qualify for an FHA loan, even if they can’t for a conventional loan. Your clients may be able to obtain an FHA loan three years after defaulting or having a loan foreclosed.

FHA loan limits may change 10/1

Unless Congress extends the expiration deadline, Federal Housing Administration (FHA) loan limits set in 2008 will drop significantly beginning October 1. Congress raised the loan limit amount in response to the housing crisis to help spur the homebuying market. FHA loans offer borrowers very competitive rates and terms, and they only require a 3.5% down payment. Allowable debt ratios are higher than the typical debt-ratio limits imposed for conventional loans, and there are no income limit qualifications, so more people can qualify for them.

If the loan limit drops on October 1, many Minnesota first time home buyers will face higher down payments, higher mortgage rates and stricter loan qualification requirements. Borrowers seeking larger mortgages will have to apply for conventional loans or jumbo loans, which may be subject to higher interest rates and down payments.

LOWER LOAN LIMITS. The conforming loan limit determines the maximum mortgage amount that FHA, Fannie Mae and Freddie Mac can buy or guarantee. If you want to stay under the current loan limits, purchase now and close by September 30th.

MORE STRINGENT REQUIREMENTS. FHA loan requirements may allow for lower credit scores. So an applicant with a lower FICO score can still qualify for an FHA loan, even if they can’t for a conventional loan. Your clients may be able to obtain an FHA loan three years after defaulting or having a loan foreclosed.

Minnesota First Time Home Buyer Home Insurance

More and more Americans are buying homes thanks to lower interest rates and a buyer’s market. Buying a home can be a challenging and intimidating experience, especially if you are a first time homeowner. While you will have many decisions to make during your home buying experience, choosing your homeowners insurance is one of the important choices you need to make thoughtfully. Your homeowners insurance will protect not only your home, but also your possessions. Protecting your most valuable asset is critical. Damage to your home or possessions can be financially devastating and your homeowners insurance will protect not only your home, but your overall financial well being. Your homeowners insurance policy protects far more than just the house. It also protects the homeowner and anyone named on the policy, like a spouse, guest or employee. A standard homeowners insurance policy includes three kinds of coverage.

The first is, as you might expect, is structural coverage. A homeowners insurance policy provides coverage for the structure of the dwelling, in case of common causes of damage, including fire and lightning, theft, smoke and extreme weather conditions. Typically, the homeowners insurance policy covers anything that is not listed under exclusions, and additional coverage may be purchased for many common exclusions as an addition to your policy or an additional, specific homeowners insurance policy as is the case with flood insurance.

You should think carefully about coverage amounts. You want to be certain that you have adequate coverage to replace or rebuild your home, not just cover your mortgage or equity in the home when you purchase home owners insurance coverage.

Your personal property and possessions are also covered by your homeowners insurance policy. Your insurance policy may even cover theft or damage on your possessions that occurs outside your home. Policyholders should make an inventory of their possessions, keeping serial numbers and other relevant information, such as date of purchase and purchase price. Many people choose to videotape their inventory. Do be sure to keep the inventory off-site or in a fireproof safe, in case of fire or other loss.

Half of the value of the dwelling is typical for personal property coverage on the standard homeowners insurance policy. Some items may have coverage limits, and these amounts may not cover replacement costs. In that case, homeowners may wish to purchase additional insurance to cover these possessions.

Homeowners insurance also provides the homeowner with valuable liability coverage in case of a lawsuit. A typical homeowners policy includes $100,000 in coverage. This amount is adequate for many homeowners, but if you have concerns about whether this amount will meet your needs, do consult an insurance professional regarding the availability of additional liability insurance.

Homeowners should periodically review their homeowners insurance coverage to see that it meets their current needs. Making major purchases, adding home improvements, or a significant change in the local real estate market may all impact the value of your home and thus, the amount of homeowers insurance coverage you require. Your insurance agent can help you review your home inventory periodically, as well as any changes to make certain that you have appropriate and adequate coverage.

Will The S&P Downgrade Affect Interest Rates?

The impact on your wallet of the Standard & Poor’s downgrade of the nation’s credit rating is similar to what would happen if your own credit score declined: The cost of borrowing money is likely to go up, the Washington Post explained in the aftermath of S&P’s decision.

While consumers who have fixed interest rate mortgages will be immune to any changes in borrowing costs, home buyers shopping for a loan or those with mortgages that fluctuate may see a rise in rates later on, some analysts say.

Mark Vitner, senior economist at Wells Fargo Securities, told the Associated Press that he doesn’t expect the downgrade to drive up interest rates instantly since the economy is still weak and borrowers aren’t competing for money and driving rates higher. However, he expects in three to five years, loan demand will be much higher and then the downgraded credit rating might cause rates to rise.

Analysts are still waiting to see if the other rating agencies, Moody’s and Fitch, follows S&P’s lead in its downgrade of the U.S. credit rating. If so, the aftermath could be much worse, analysts say.

The debt deal reached by Congress last week was expected to save the U.S. from any credit rating downgrade. However, S&P said lawmakers fell short in its deal. Congress deal called for $2 trillion in U.S. deficit reduction over the next 10 years; S&P had called for $4 trillion.

MN First Time Home Buyer Loan Programs

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