The housing plan included in President Obama’s stimulus package has many good qualities that will help those seeking Minneapolis real estate.
There are two main points to the housing plan:
1. To help people once again obtain reasonable mortgages to afford the loft of their dreams.
2. To keep people in the lofts they already have. If it works the way it is planned, it is reason for a collective sigh of relief for millions of loft owners feeling threatened by foreclosures.
That’s really it in a nutshell. There are many incentives wrapped up in each of those two areas to help both loftowners and prospective loft buyers, but the very impetus behind the stimulus housing package is simple.
For Current Loft/Condo Owners
If you have a current mortgage that you can’t handle, now is the time to talk to your mortgage company. Don’t wait too long because some of the detailed elements of Obama’s housing plan are meant to be short-term in their offer so as not to over-tax the budget. While you have the chance, see if your mortgage can be reduced to reflect current loft values. That can provide you with the equity you would have already built up but lost due to a drop in housing values. It will also lower your monthly mortgage to a manageable level.
For New Loft Buyers
This is your market now. The Minneapolis real estate prices are much lower which gives you a chance to buy a loft you might not have been able to afford before. President Obama’s housing plan provides tax incentives for you. However, just like with current loft/condo owners, the time to do this is now. Because of the stimulus to the Minneapolis real estate market, housing values are not going to stay as low as they currently are. Also, many of the incentives like the tax credits are valid for a very limited time.
If you’re ready to take advantage of the stimulus package benefits by buying a loft, I can help. Call me now at 612.817.1676 or email me at ben@cityoflofts.com.
If you are thinking about buying Minneapolis real estate in the near future, there are three activities you should avoid. These are normal things we all do from time to time, but are unwise when contemplating a new mortgage application.
1. Change careers: This is different than just changing jobs. If you have recently gotten a new job in the same field, at the same or better pay, and your past history shows long, solid employment, all should be fine. Changing careers entirely is more of an issue. You have no history of steady employment and income in the new field. Since you’re new to the field, you may be bringing in less income than in your previous career. That’s why a recent career change makes your mortgage application less appealing to a loan officer.
2. Open new bank accounts: When you apply for a loan for Minneapolis real estate you need to provide bank statements for several months. Although your money is still in your possession, moving it to new bank accounts generates a series of big withdrawals and deposits which gives an image of instability. If you have withdrawn large amounts of money and not re-deposited it, that looks even worse. Even if you invested the money in something solid, you no longer have the cash and thus appear less solvent.
3. Buy Big Ticket Items: The reason for this is simple. When reviewing a loan application for Minneapolis real estate one of the biggest things a lender takes into consideration is your debt-to-income ratio. Purchasing expensive items on credit can negatively impact your debt-to-income ratio. Wait until after you’ve closed on your condo or loft to buy new furniture or appliances.
Thinking of buying a loft? I can help you get financing and buy the loft or condo of your dreams. Give me a call today at 612.877.1676 or email me at ben@cityoflofts.com.
Buying REOs is a very popular method of buying Minneapolis real estate for investment. If you’re just getting started accumulating investment property, this is one way you can get very good deals and amass a great deal of property quickly.
REO stands for Real estate Owned and is the acronym banks place on properties they have taken back from mortgage defaults. REOs are considered non-performing assets meaning they have value but are not bringing in any money—bad for the bank, good for you.
Buy REOs at Foreclosure Auctions
Foreclosure auctions are a great way to get fantastic deals that you might not be able to convince a bank to go with prior to the event. Some savvy investors try to catch properties while they are in pre-foreclosure which avoids a property being bid up in an auction atmosphere. To do that, you often have to convince the holding bank to “short sale” a property and sell it for less than the note they were holding on it. At a foreclosure auction, the bank is usually desperate to unload the Minneapolis real estate and often settles for far less than the actual value without all of the short sale paperwork.
Do Your Homework
If you choose to buy properties at auction do your homework. Use foreclosure worksheets to determine the true value of a property and what your maximum bid should be in order to realize a profit from its eventual sale or use as a rental. Doing this prevents you from getting caught up in the moment and over-bidding on a piece of Minneapolis real estate that has a lot of competitors bidding on it.
If you would like more information on how to acquire REO properties in the Minneapolis loft or condo real estate market, I can help. Contact me at 612.877.1676 or email me at ben@cityoflofts.com.
When looking for property that will be a good investment either as a rental, resale, flip, or even a loft that will eventually be worth a great deal more than you originally paid, location is a paramount concern. For the very best in Minneapolis real estate investments, location means more than just being situated in a good neighborhood—it means a location with perks.
1. Gated Communities - Privacy and security are worth their weight in gold—or at least you’d think so considering what people are willing to pay for the peace of mind of knowing their loft or condo is secure.
2. Great Loft Communities in Major Metropolitan Areas - Big cities mean big bucks and lots of need for housing. People living in large cities typically have more disposable income and are willing to pay for the convenience of living in the middle of the action.
3. Rapidly Growing Communities - If you’re lucky enough to know when an area is in a growth spurt, buy investment property there.
Many people go through life one paycheck to the next and never bother to figure out where their money is going. It’s important to know where your money is going and what you can afford if you are thinking about buying a new Minneapolis loft.
Here’s how to start up a monthly budget that will keep you in the know about where your money is running off to each month.
• Find a program you’re comfortable using. Your computer probably came with a spreadsheet program. If you are not used to using one open it up and become familiar with the program. It’s a great tool to use to create a budget. If by chance your computer doesn’t have a spreadsheet program, you can use an online program like Budget Pulse, or other useful online budget systems such as Mvelopes.
• Enter your absolute monthly expenses such as car loans, utilities including cell phone bills, and credit card expenses.
• Enter your monthly bills that can vary such as food, gasoline, entertainment. These expenses can be changed to help improve your bottom line, but make sure you give them fair limits so you don’t cut yourself short on necessities such as food or transportation costs.
• Make sure you figure in some savings for vacations and other unexpected expenses that may pop up throughout the year. Trimming your budget so severely that you have no extra money to cover you when something breaks down, or an extra bill comes in is a sure method for disaster and will make you new life in a Minneapolis loft miserable instead of the happy time it should be.
Once you realize where your money is going, it’s easier to see if you are spending frivolously or strapped to your limits. It is the best way to determine if your dreams of a new Minneapolis loft are realistic or not.
If you have any questions about your ability to afford a new loft, I can help. Call me today at 612.877.1676 or email me at ben@cityoflofts.com.
With money worries on the rise the first place many turn to is the monthly budget. It seems to be unyielding and rigid. What else can you cut when you’ve eliminated everything you don’t absolutely need?
One of the best places to cut expenses can be your mortgage. Now with the new stimulus plan in effect it’s even more possible to refinance your Minneapolis real estate to get the most savings possible. Here are a few things to look for to decide if refinancing is right for you:
•Are you interested? The interest rates have dropped due to incentives by President Obama. If the current interest rate is lower than your existing rate, you might be able to save hundreds of dollars each month when you refinance. Check with your mortgage provider to determine if you can save money by refinancing.
•Give yourself credit. You’re entitled to a free credit report from all three major credit reporting companies each year. Use it to find out your credit score. If your score is above 650 on all three, you have a good chance of taking advantage of the new interest rates.
•Location, location, location. If you live in one of the major metropolitan areas of the U.S. and have a typically high mortgage over $417,000.00, you could benefit a great deal from refinancing immediately. Conversely, if you live in a declining market, you will need much higher equity and a better credit score than 650 to successfully refinance your existing loan.
•What’s your line? If you have at least 10% equity in your condo, you are in good shape to refinance.
Knowing where you stand is the first step in deciding if refinancing is right for your Minneapolis real estate. If you have any questions about refinancing, give me a call today at 612.877.1676 or email me at ben@cityoflofts.com. I’m happy to help.
Buyer’s remorse happens to most people. The fear of signing a long term deal with a mortgage company at the closing of a Minneapolis real estate deal, whether it is for a family condo or investment property, can be frightening. It’s important to not let that fear get the best of you for several reasons. Not only will you lose out on that perfect piece of property you’ve looked so long for, you can lose a lot more than that.
Walking away from a deal before signing can mean losing any earnest money you have put down when you bid on the property. Unless you made a bid with no money to back your offer, which is highly unusual, you will lose it by deciding not to go through with the closing.
There are a few contingencies that may allow you to get all or some of the earnest money back when you walk away but only if you have listed those possibilities in the offer such as:
·Not getting the financing you’d hoped for. If you don’t list that possibility as a contingency for buying a condo, even if you can’t get financed, you will lose your earnest money deposit.
·Not selling existing Minneapolis real estate.Again, this only works if you included the sale of your existing real estate before final closing on the new condo as a contingency.
·Appraisal, title, or inspection contingencies are also good clauses to have in your offer to protect you in case you want to back out of the deal. These allow you to change your mind if the appraisal value of the Minneapolis real estate doesn’t come back matching the price you are paying, inspections turn up problem areas, or the title has issues.
Don’t be fooled into thinking that you can back out of a signed contract bid because of those items if you do not list them as contingencies.
Let me help you prepare a proper real estate contract, including all contingencies.Contact me today at 612.338.3524 or email me at ben@cityoflofts.com.
With the current economy, it may seem like a better idea to rent a Minneapolis condo instead of buying one. Let’s explore some of reasons why it’s still better to buy rather than rent.
Throwing Money Away
When you rent that’s basically what you’re doing. You give your money away in exchange for a ‘perishable’ item—one month of living space. Once that month is over, the money is gone and you didn’t get anything of long term value in return.
When you buy a Minneapolis condo you still spend money for a month of living space, but in addition, you’re building long term equity. It may take longer and property may not increase in value as quickly as it did in the past, at least for now, but the money you spend becomes a back end asset instead of just disappearing.
Tax Breaks
When you buy a loft, you can deduct the interest and property taxes that you pay every year on your income taxes. That can be a sizeable amount of money. If you buy your first loft in 2009, you get an even bigger tax break of $8,000 as a result of President Obama’s stimulus plan.
Saving Money
Yes, you actually end up saving money in the long run if you buy a loft rather than rent. According to The New York Times, over a 16-year period you can save as much as $5,000.00 by owning your own loft. And, that number doesn’t include the $8,000 tax credit first-time loft buyers get when they purchase a principle residence in 2009.
The bottom line is that the housing market troubles have nothing to do with the ‘evils’ of loftownership. They have to do with bad lending practices, and people wanting more than they can afford.
Choose your Minneapolis condo wisely, only buy what you can afford to pay for each month, and pay attention to the loan you are being offered. If you need any advice on the best types of loans or condos available, I’d like to help. Call me today at 612-338-3524 or email me at ben@cityoflofts.com.
The new stimulus bill gives first-time home buyers a tax credit of $8,000! Whether the [city] real estate you purchase is new or a re-sale there are always things you can do to make improvements. Here are a few ideas on how you can use the tax break for your new home.
•Put in all new appliances. $8,000 will buy a nice set of kitchen and laundry appliances, and enough groceries to fill up that new refrigerator for several months on top of it.
•Furnish a room. Many times a new home means old furniture just won’t fit in or fill it up. $8,000 goes a long way to decorating a new room or two.
•Put on a porch. The stimulus money can be used to add value to your Minneapolis real estate by making additions like a patio or porch. It will make your new home even more enjoyable too. Construction jobs helps the economy and creates jobs in the community—a double bonus that you are making happen!
•Buy a car. Okay, maybe your new home is perfect as it is. That’s lovely. Use your stimulus tax incentive to put a big down payment on a new car. The huge down payment will keep your monthly payments low and affordable while helping out the other big industry failing in the current economy.
The key to the President’s stimulus plan is to spur the economy and give people money to spend—so go ahead and spend it. Buy those items you’d have trouble getting for your Minneapolis loft without the extra help. And, feel good about it.
Have questions about how the stimulus helps first-time buyers? Give me a call today at 612.338.3524 or email me at ben@cityoflofts.com. I’m happy to answer all your questions with no obligation whatsoever.
Many people go through life one paycheck to the next and never bother to figure out where their money is going. It’s important to know where your money is going and what you can afford if you are thinking about buying a new Minneapolis loft.
