Inman News™, March 21, 2011
By BERNICE ROSS

Lack of a down payment is the No. 1 obstacle to home ownership. What most buyers don’t realize is that there are still hundreds of programs available to help them obtain a mortgage with less than 10 percent down.

I recently interviewed Rob Chrane of Down Payment Resource about an exciting new tool his company has created to assist buyers in obtaining down-payment assistance.

According to Chrane, many people are aware that there are FHA programs available to buyers who have low down payments. Most buyers, however, have come to the mistaken conclusion that it now takes at least 10 percent down to purchase if you use a conventional loan instead of an FHA loan.

Payment assistance comes in many forms. Down Payment Resource connects potential borrowers with available funding for down-payment assistance, fixed-rate mortgages, rehab loans, and more.

What makes this new program exciting is that the Down Payment Resource site works hand in hand with a multiple listing service (MLS) to do two things. First, while there are numerous federal programs available, few people realize how many state and local programs are available as well. These programs often have very different guidelines as well as loan limits.

Down Payment Resource aggregates all the programs for which a particular property would qualify based upon the location and nature of the program. The system then displays an icon on the MLS listing indicating that this particular property is available for down-payment assistance. Borrowers can click on the icon to see which programs are available.

Aggregating all of these programs and tying them to specific properties is a gargantuan task. The system works by linking to the agencies that administer the programs. These agencies maintain the current list of requirements as well as the lenders who offer the programs.

To illustrate, a house we chose at random from the program displayed eight different resources for potential homebuyers who might be seeking down-payment assistance.

Second, the program qualifies buyers as well. A prospective homebuyer completes a simple online form containing eight questions. The user can stay anonymous because the system doesn’t track any identifying information. Once the form is completed, the system informs the user about whether he will qualify as well as providing an offer for a REALTOR® and/or lender to contact him.

While this system is relatively new, the feedback from the MLS systems using it thus far has been very positive. The system is a huge lead-generation tool for agents and brokerages, as well as lending institutions.

The MLS systems that are currently using the system typically purchase it as part of the core services to link to their IDX feed. There is no charge to the agents. The links to the assistance programs are available on the MLS IDX feed and can be posted on the brokerage’s or the agent’s site as well.

There are numerous ways for agents to use the system. First, they can use it as a quick way for new buyers to identify the houses they will qualify for to purchase. This is different from anything in the past, as the system clearly identifies the specific properties that qualify and helps the buyer determine how much he can qualify to borrow. The benefit to the agent is that she doesn’t need to waste time showing properties that don’t qualify.

Agents using the system also have reported that it can be an extremely valuable tool for helping sellers be realistic about their pricing. The way to do this is by using the closing script that’s based upon the notion that “your house has to qualify.”

“Mr. and Mrs. Seller, you already know that in order to sell your house, you need a qualified buyer. Did you know that your house also has to qualify?”

This statement usually surprises most sellers. The normal course of action at this moment is to explain that because more than 90 percent of today’s buyers need a loan, their house has to qualify with a lender.

You introduce your comparative market analysis (CMA) by saying, “So let’s take a look at what properties are qualifying for in this area.”

If a number of properties in this area were eligible for down-payment assistance, it would be wise for the seller to price her property where she can reach the greatest number of potential buyers.

For example, assume that a seller would like to list her property at $300,000. At that price there may be only FHA financing available. On the other hand, if the seller lists her house at $295,000, there are two additional down-payment assistance programs available. Clearly, the best choice for the seller would be to list for a little less and broaden the number of potential buyers for the listing.

Chrane said that he expected a fair amount of pushback from real estate companies that have their own in-house lenders. Once these brokerages started working with the system, however, they realized not only could they generate buyer leads, but they could also generate mortgage leads.

This program exemplifies one of the best ways the MLS systems, brokerages, agents, lenders, and third-party vendors can work with federal, state and local programs to help more buyers achieve their dream of homeownership.

Bernice Ross, CEO of RealEstateCoach.com, is a national speaker, trainer and author of the National Association of REALTORS®’ No. 1 best-seller, “Real Estate Dough: Your Recipe for Real Estate Success.” Hear Bernice’s five-minute daily real estate show, just named “new and notable” by iTunes, at www.RealEstateCoachRadio.com. You can contact her at Bernice [at] RealEstateCoach [dot] com or @BRoss on Twitter.

Call me if you want downpayment information or a referral to a great lender!
Jen McKinnon
Realtor / Investor / CDPE
AGENT REFERRAL NETWORK
The Minnesota Real Estate Team

612.384.1073
jen[at]MnRealEstateTeam[dot]com

One note before you start reading this…..please contact your lender for more information on these changes to see how it will affect you. There are many loan options available. Your personal financial situation, credit score and many more factors will influence which loan is best for you.

RISMEDIA, February 17, 2011—As part of ongoing efforts to strengthen the Federal Housing Administration’s (FHA) capital reserves, FHA Commissioner David H. Stevens announced a new premium structure for FHA-insured mortgage loans increasing its annual mortgage insurance premium (MIP) by a quarter of a percentage point (.25) on all 30- and 15-year loans. The upfront MIP will remain unchanged at 1.0%. This premium change was detailed in President Obama’s fiscal year 2012 budget, and will impact new loans insured by FHA on or after April 18, 2011.

“After careful consideration and analysis, we determined it was necessary to increase the annual mortgage insurance premium at this time in order to bolster the FHA’s capital reserves and help private capital return to the housing market,” said Stevens. “This quarter point increase in the annual MIP is a responsible step towards meeting the Congressionally mandated two percent reserve threshold, while allowing FHA to remain the most cost effective mortgage insurance option for borrowers with lower incomes and lower down payments.”

The proposed change was announced last week as part of the Obama Administration’s report to Congress, which outlined the Administration’s plan to reform the nation’s housing finance system. The Administration’s housing finance plan also recommended that Congress allow the present increase in FHA conforming loan limits to expire as scheduled on October 1, 2011.

This premium change enables FHA to increase revenues at a time that is critical to the ongoing stability of its Mutual Mortgage Insurance (MMI) fund, which had capital reserves of approximately $3.6 billion at the end of FY 2010. The change is estimated to contribute nearly $3 billion annually to the Fund, based on current volume projections. It is vital that HUD take action to ensure that FHA will continue to serve its dual mission of providing affordable homeownership options to underserved American families and first-time home buyers while helping to stabilize the housing market during these tough times.

On average, new FHA borrowers will pay approximately $30 more per month. This marginal increase is affordable for almost all home buyers who would qualify for a new loan. Existing and HECM loans insured by FHA are not impacted by the pricing change.

FHA will continue to play an important role in the nation’s mortgage market in 2011. President Obama’s FY 2012 budget projects the FHA will insure $218 billion in mortgage borrowing in 2012. These guarantees will support new home purchases and re-financed mortgages that significantly reduce borrower payments.

For more information, visit www.hud.gov.

Copyright© 2011 RISMedia, The Leader in Real Estate Information Systems and Real Estate News. All Rights Reserved. This material may not be republished without permission from RISMedia.

Looking to buy or sell?
Jen McKinnon
AGENT REFERRAL NETWORK
The Minnesota Real Estate Team
612.384.1073
jen[at]MnRealEstateTeam[com]

RISMEDIA, January 14, 2011—It’s easy to get confused and frustrated during the appraisal process when buying or selling a home. Because of this, the Appraisal Institute recently released tips for consumers, providing guidance for homeowners and buyers seeking to ensure their sales are completed in a timely manner.

The Appraisal Institute’s tips encourage homeowners and buyers to:

• Understand the role of appraisals.
• Make sure their lender hires a qualified appraiser (such as a designated SRA, SRPA or MAI member of the Appraisal Institute).
• Accompany the appraiser during the inspection of the property, if possible.
• Request a copy of the appraisal report from the lender.
• Examine the appraisal report and ask questions.
• Appeal the appraisal if appropriate.
• Ask the lender to order a second appraisal by a qualified and designated appraiser.
• File legitimate complaints with appropriate state board or professional appraisal organizations.

“Credible opinions of value can help to stabilize the real estate market,” said Appraisal Institute President Joseph C. Magdziarz, MAI, SRA. “Appraisals are especially important because they are an objective and unbiased source of information. Unlike others involved in real estate transactions, the appraiser is an independent professional who performs a service for a fee rather than for a commission.”

Magdziarz noted that normal declines in the real estate market have led to increased caution by lenders. That caution has led to delays in completing some real estate transactions.

“Appraisers today are doing the same thorough, fact-based research and analysis they have always done,” Magdziarz said. “Nothing has changed in that regard.”

Magdziarz added that appraisers have been wrongly accused of prolonging the nation’s real estate downturn by developing value opinions that are below proposed sale prices. Specifically, he said, they’ve been unfairly criticized for including comparable sales in the valuation process that provide opinions that are below the cost to build.

It serves neither the lender nor the consumer to enter into an upside-down mortgage, he noted. Some real estate agents, mortgage brokers and home builders have used the Home Valuation Code of Conduct and Interagency Appraisal and Evaluation Guidelines as a scapegoat for current declines in the real estate market caused by the weak economy and the general oversupply of homes in the market, Magdziarz said.

Looking to buy or sell? I’d be happy to talk further!
Jen McKinnon
AGENT REFERRAL NETWORK
The Minnesota Real Estate Team
612.384.1073
jen[at]MnRealEstateTeam[dot]com

Now is a great time to buy as long as you work with a qualified bank or mortgage broker to ensure a solid, safe loan product. Of course, you never want to buy more of a home than you are comfortable with and a good lender will never push you into that direction.

AND….as a home buyer, you certainly want to work with a qualified, REALTOR who will be representing YOUR best interests. The Twin Cities, just like many other markets is being driven by price right now and you want a REALTOR on your side that can help navigate the process and also help ensure that everything gets done correctly.

Home buying can be exciting and scary and yes, it is still a good investment in the Twin Cities – as long as you follow the proper steps and work with a team of qualified mortgage and Real Estate professionals. Read on for more thoughts…..

Majority of Americans: Buying a Home Is a Good Decision

RISMEDIA, November 27, 2010–Despite the continuing challenges facing the U.S., nearly eight out of 10 respondents believe buying a home is a good financial decision, according to NAR’s eighth annual Housing Opportunity Pulse Survey.

The survey, which measures how affordable housing issues affect consumers, also found job security concerns to be the highest in eight years of sampling, with 70 percent of Americans saying that job layoffs and unemployment are a big problem in their area; eight in 10 cite these issues as a barrier to homeownership. The telephone survey of 1,209 urban and suburban adults in the top 25 metropolitan statistical areas was conducted for NAR by American Strategies and Myers Research & Strategic Services for NAR’s Housing Opportunity Program.

Some key results:

* Americans continue to believe that buying a home is a good financial decision (77 percent believe strongly or not so strongly, 68 percent strongly so).
* More than two-thirds of respondents (68 percent) say that now is a good time to buy a home.
* Job insecurity and the lack of jobs continue to be the primary obstacle to home ownership and market recovery.
* Respondents see the recession and job losses as the main reasons for the foreclosure problem, a shift from last year when they were more likely to blame homeowners who bought homes they could not afford.
* A majority of renters say that owning a home at some point in the future is either one of their highest priorities (39 percent) or a moderate priority (24 percent). Just 21 percent of renters say that owning a home is not a priority at all.
* Frustration with banks is up: now a majority worry that banks have made it too hard to qualify for a home mortgage loan.
* 51 percent of respondents say foreclosures remain a big or moderate problem in their area. While there has been a significant drop in the percentage of those surveyed who say foreclosures have increased, 51 percent say that the rate of foreclosures is about the same as it was last year.
* Most of those surveyed say that it is harder to sell a home in their neighborhood than it was a year ago.
* Looking forward, 70 percent expect real estate sales in their neighborhood to remain about the same over the next few months. A nearly identical number (69 percent), also expect home values to remain the same.
* Nearly one-quarter (23 percent) are now very concerned about the number of homes and condos for sale in their area—a number that is up 7 points from last year.
* Most respondents are more concerned about the drop in home values than they are about home costs being too high. Still, cost remains the significant barrier to many who would otherwise like to buy a home.

Contact me with questions or if you are looking for information!
Jen McKinnon
Realtor/Investor/CDPE
AGENT REFERRAL NETWORK
MN Real Estate Team
612.384.1073
jen[at]MnRealEstateTeam[dot]com

RISMEDIA, October 20, 2010–For many prospective buyers, the thought of going through the home-buying process is often filled with a lot of stress. From finding a qualified real estate agent, to narrowing down your choice of homes and then packing your belongings and moving across town can be an overwhelming process.

OpenSkyRealEstate.com offers the following tips to help you keep your cool as you begin the process of a buying a home.

-Buying a home is one of the biggest financial decisions you will make in your lifetime, and along with the finances come emotions. When you are choosing a real estate agent to work with, be patient and take the time you need to find an agent that you connect with. Finding a highly-skilled agent who fits with your personality is crucial.

-Every home buyer and seller is in a different situation, so it is important that you don’t compare your timeline and decisions to anyone else’s. As you make your way through the home buying process, remember that there is no right time to buy, just as there is no perfect time to sell. If you find a home that fits your needs, don’t let it slip out of your hands by waiting for interest rates to drop lower as you run the chance of losing out on the home of your dreams.

-It is natural to want to get opinions from those you trust before you make your final choice, but too much input will ultimately make the decision process much harder. Remember to focus on what your immediate wants and needs are so that everyone will be happy with the final decision.

-You probably aren’t going to find a home that is 100% perfect, so it is important to make a list that includes your top priorities that you can’t live without. Be sure to stick to the items on your list and let go of the minor things.

-Negotiation is an important part of the real estate buying process, but be sure you don’t take your negotiating too far. Trying to get an extra-low price or refusing to budge on your offer may cost you the home in the end. Successful negotiation depends on give and take, so make sure you are being fair in your requests.

-Don’t get too caught up in all the physical aspects of a home and forget about the more important issues. While the size of the rooms and the layout of the kitchen might not be exactly what you expected, be cognizant of issues such as noise level, location to amenities and other aspects that will have an impact on your day-to-day life.

-Getting approved for a mortgage should be taken care of well before you find a home and make an offer.

-Create a budget before you move into your new home and be sure to include maintenance and repair costs. Even if you buy a new home, there will be extra costs, so it is important to not come up short and let your new home deteriorate.

-After purchasing a home, a little buyer’s remorse is inevitable, but it will pass. Buying a home is a big financial commitment, but it also yields big benefits. If you are feeling remorseful after buying your home, remind yourself why you wanted to buy a home and what made you fall in love with your new property.

-When choosing a home, buy it because you love it. A home’s most important role is to serve as a comfortable, safe place to live, so don’t get bogged down with thinking about your home’s appreciation.

I’m here to help in the Twin Cities with your home buying adventure whether you are a first time home buyer or have purchased many homes!  Please call, email or tex anytime!

Jen McKinnon
Realtor. Investor. CDPE.
Agent Referral Network
The Minnesota Real Estate Team
612.384.1073
jen[at]MnRealEstateTeam.com

Cornerstone Mortgage (Rob Bonahoom) in Burnsville Minnesota

Bell Mortgage (Alec Grebis) in Bloomington Minnesota

Conventional 100% financing now available

680 minimum credit score

45% Debt-To-Income ratio or less

NO Mortgage ins needed with this program

Must be first time home buyer (not owning a home in the previous 3 years)

Up to 3% in seller paids allowed

Income limits of $83,900 a year for a family of 1-4 people

This program was just unveiled today and it sounds like lenders can not lock anyone in until August 16th so that gives you plenty of time to get out and find the perfect home!  Home inventory in the traditional first time buyer price range (under $200,000) is very high especially in the under $150,000 range.  Just a few months ago investors were going crazy buying up cheap bank owned houses (especially in North Minneapolis) and remodeling them.  Now, because the federal tax credit expired, these sellers are sitting on inventory that they want to sell fast!  Now, don’t get me wrong…it does not mean you can throw out low ball offers all day long, it just means that many of these houses are priced to sell!

For more information about 2 beautifully remodeled homes in North Minneapolis, click on the links below – these houses are move in ready – just about everything is NEW (including most of the plumbing and electrical!).

3318 James Ave N Minneapolis

3842 Humboldt Ave N Minneapolis

Call or email me with any questions!

Jen McKinnon

Real Estate Agent / Investor

AGENT REFERRAL NETWORK

Member of the #1 MN Real Estate Team

612.384.1073

jen@mnrealestateteam[dot]com

RISMEDIA, July 30, 2010–The economy is stabilizing. Home prices are holding. It’s not just as good a time as ever to buy a house. It’s one of the best times ever.

1. Low mortgage rates serve as an equity shock absorber. When buyers borrow at today’s record-low rates, they start building equity as soon as they close. That means they have a little give to absorb a few ups and downs as the still-recovering housing market gains traction.  So, don’t worry about “missing” out on the tax credits – real estate is a LONG TERM investment.  Now is a great time to buy while interest rates are low!

2. Houses are in move-in condition. Homeowners have continued to spend on maintenance and repair, according to the Harvard Joint Center on Housing. Homeowners in the Twin Cities who have been holding back kept their houses in good shape while they waited. As those owner occupant houses enter the market, they are in marked contrast to tattered foreclosures.  Sellers are doing what is needed to make their homes stand out and sell!  This means a move in ready home for you!

3. Terrific houses are coming on the market. Foreclosures are finally starting to clear the system – and this is just the opportunity that owners of many desirable properties have been waiting for.  Don’t get me wrong, foreclosures can be a GREAT deal but they are not always left in the best shape when the owner moves out.  There will still be plenty of foreclosure homes for sale in the Twin Cities (and rumor of some of the more high priced homes hitting the market) but more homeowners (not in foreclosure) are choosing to sell now as well in hopes of making up any losses on the sale of their current home when they buy their next house.

4. Appraisal regulations are finally aligned with market realities. Fannie Mae has adjusted its appraisal guidelines…again. Now that appraisers have more flexibility to set values that reflect the current market, today’s deals will more likely make it over the finish line.  BUT please be aware that you still need to work with a reputable lender who has a history of getting the deal done and within a reasonable time frame.

5. Plenty of programs. Homes are more affordable than they have been for years, but communities have stuck by “workforce housing” programs that encourage middle-class families to buy houses. Buyers who qualify can get a big boost by combining one of these programs with today’s low mortgage rates.  Again, don’t worry if you missed the federal tax credit…many counties and cities have programs available to assist with down payments.  Contact me if you need more information – I can put you in touch with GREAT lenders who has access to everything out there in Minnesota!

Give me a call!

Jen McKinnon

Real Estate Agent / Investor

612.384.1073

jen[at]MnRealEstateTeam.com

AGENT REFERRAL NETWORK

Member of the MN Real Estate Team

New Loan Product for the Minnesota Mortgage Program

Minnesota Housing will soon be offering Affordable Advantage, a loan product that helps serve low- and moderate-income borrowers. The product has flexible terms and is one of the few 100 % LTV products available in the market. The product is based on Fannie Mae’s Affordable Advantage™, an initiative developed exclusively for Housing Finance Agencies, including Minnesota Housing.

Contact me for more information or to start the home search process!
Jen McKinnon
Real Estate Agent / Investor
AGENT REFERRAL NETWORK
Member of The Minnesota Real Estate Team
jen[at]MnRealEstateTeam[dot]com
612.384.1073