Huge news today!!  FHA has published a Mortgagee letter stating that they will in the future allow the down payment to come from the tax credit.  This is huge news as many first time buyers would like to buy a home and can make a payment, but are unable to find the money for their down payment.  This will solve the problem.  Soon more details will be released.  In the meantime, take this time to make sure you are pre-approved for a loan.  There may be credit issues you need to fix.  Use this time to get your "financial house" in order so that when the credit becomes available, you will be ready for your purchase.

Minnesota first time buyers should go to our website and begin the online application at http://www.VentureLoanApp.com

To see a copy of the mortgagee letter-go to http://www.Slideshare.net/mnguru  There are a number of other reports available as well  Ventrure Developement is Minnesota's Premier mortgage broker.

10 Steps to Sell You Home Faster In A Slow Market

You probably already know that real estate across most of the country is not appreciating as fast as it was at one time. This isn't necessarily a bad thing, unless of course you purchased last year and are now selling. People who have owned a property for a few years are generally well ahead in the game. We can't predict what 2009 will bring, but so far, most markets have at least slowed, if not declined. For the majority of established home owners in the prevailing market, prior property appreciation will ensure at least some degree of profit, though today's sales might not be as prosperous as they would have been in 2006. But all homeowners want to get the highest possible profits. How do you go about this? There are 10 negotiating steps that a seller can follow to assure that a person's home gets the best price and is sold quickly.

Step 1: Use a broker from the local area. When the market is down, so is the number of buyers. That means that you need to expose your property to as many potential buyers as possible. Who do prospective buyers get in touch with when they are house hunting? Real estate brokers. National Association of Realtors statistics show that 85% of purchasers count on real estate brokers for their home selections, while the Internet accounts for 80%. Who creates all of those online real estate postings? Real estate brokers from the local area.

Step 2: Familiarize yourself with the entire sale agreement. Nearly all jurisdictions have standardized real estate contract that has become lengthy and complex over many years. If you use one of those, read it carefully and be aware that you are agreeing to every unmodified term and condition. Make sure there is nothing in the agreement that needs to be taken out, rewritten or added. The brokers should offer a copy of the sale agreement that they might use at listing presentations and the sale deed should be read to avoid misunderstandings. As these are agreements on forms, whatever is not stated as a requirement by the law can be changed by a cross-out or addenda. Consult your attorney or broker for further detailed information.

Step 3: Be completely familiar with the current real estate market. For the sake of negotiations, knowing what the recorded sale prices were isn't sufficient because often they don't give the complete picture. As an example, two houses might have both sold for $300,000. A person might have sold for $350,000 while the other for $300,000 but the owner gave the buyer a 6 percent seller credit for a new roof and appliances, which is $18,000. Local brokers who are familiar with the details of recent sales are able to provide the best negotiation advice.

Step 4: Understand all of the terms you are willing to offer. You are confident that your home is going to sell at some satisfactory price, but instead of starting out with an inflexible amount, consider the property sale as a combination of price and terms. For example, it might make more sense in a slow market to help reduce the buyer's closing costs by offering a "seller contribution "instead of lowering the price of the property. Often the seller contribution could be significantly less than a reduction in price, and buyers who require cash to close the sale could find it more attractive as well.

Step 5: Request a smaller deposit. In order to bind a legal contract, the buyer needs to make a deposit. In an ideal marketplace, a seller will receive a large deposit, but in a down or "off" market, a much smaller deposit may have to be accepted. The buyers prefer to make the lowest possible deposit because a huge deposit indicates a big financial and psychological commitment. You can ask for a lower deposit if the buyer has mortgage pre-approval or if the buyer shows a strong interest in the property and you have no other offers.

Step 6: Sweeten the pot. Are you really planning to take large items like a swing set or washing machine? In certain cases it may be better to leave such items if a buyer makes an offer.

Step 7: MLS photos have to be updated. If your MLS photo shows snow around your home in the middle of the summer, potential buyers will know your house has been on the market a while.  They may interpret this as meaning that you might be desperate to sell and will expect to lower your initial offer. Make sure your broker posts recent photographs.

Step 8: Fully understand the marketing plan. The broker's marketing plan should be reviewed quite often to see that it is being followed and is changed whenever it is needed.

Step 9: Check out open houses. Going to open houses, also known as your competition is a great idea. It isn't always easy to be objective.  However, do other owners have selling ideas that might work in regards to your home? Is there something you can use to bargain with? You could consider offering to do some painting or other cosmetic repairs.

Step 10: Keep everything in context. Don't worry about nickels and dimes when your main goal is to get the house sold.

As an example, just before closing the deal, we had a buyer request an extra $600 to resolve last minute concerns. That gesture seemed like nothing more than a case of buyer's remorse, so we agreed to it, received an otherwise ideal price, and closed the sale. It wasn't long before the prices softened in the local market. It was better to lose $600 than to find another buyer later when the market was harsher and the final sale price might have been less by several thousands of dollars. Would we have preferred to save that $600? Certainly. However, six hundred dollars was a small price to pay considering that the delays could have meant a big reduction in price.

Tremendous news this week about the FHA allowing the first time buyer tax credit to be used as a down payment.  In the past and (current) present, the credit was not allowed to be used for the down payment.  Instead, you had to apply for it after you purchased your home.  This is about to change.  The lenders and FHA are still figuring out how this will work.  For example, it is ver likely that the borrower will actually take our a bridge loan or temporary financing in an amount equal to the amount of credit they will receive.  Whether the credit will be assigned and transferred to the lender and other such particulars have not yet been finalized.  The GREAT news is that it is coming.  This will help the current housing crisis as more people will be able to buy homes.  NOW is the time to begin to get prequalified for your new Minnesota home.  When this becomes available, lenders will be swamped. 

FYI the credit can go up to $8000 and is set to expire on December 1st. 

The new "Making Home Affordable" plan has been created to allow those individuals who have a Fannie Mae or Freddie Mac serviced loan that is current, but no longer represents the original loan to value of 80% loan to value or LESS, can now refinance as long as the current first mortgage value doesn't exceed more than 105% of the total value.  Rates offered on this program are pretty good as well.  If you've thought you can't refinance in the past, now is the time!

If you have subprime or Jumbo loan-we may have other options.  If you have an FHA or VA loan in Minnesota, then a Streamline refinance may be possible.  You need to call us and discuss your options. 

Also, we have access to some of the BEST jumbo rates in MN.  Call us today 952-285-4319

I just ran across something that might be of interest to a buyer.  Unfortunately, they can't directly purchase it.  BUT, the seller of home that they are buying CAN buy it on their behalf.  The product is designed to pay up to 6 months of your mortgage payment (maximum of $1800 per month) if you are involuntarily undemployed.  There are rules, restrictions, and exclusions.  That being said, if you are worried about not making your payment because you MIGHT get laid off, then this might be the program that gives you the confidence to go forward and buy a home.

Visit http://www.SlideShare.net/mnguru and check out the PDF of the program.  If it looks good, ask your seller to purchase it for when you are making an offer.  NOT all agents have access to this program.  John Mazzara at RE/MAX Does!

We are still doing loans that other can't-Financing available throughtout most of Minnesota

2nd Mortgages!  Yes, they're still available!

• Loan amounts up to $350k!
• Interest ONLY Heloc pricing starts at Prime + 1.00 = 4.25% -depends on credit, loan size and LTV
• Helocs have a 15 yr draw period with an additional 10 yrs to repay
• Helocs have a "fixed rate" option available and a "low cost" option
• Refinance, Cash Out, Home Improvement, Purchase (Only fixed products available on purchases, no heloc)
• Stand Alone 2nds available!
• Our 2nds  can close behind a new 1st mortgage with this investor or another lender

JUMBOS!

• Purchase or Refinances
• Cashout with no hit to rate
• Loan amounts up to $900k
• Look at all these ARM choices... 1/1, 3/1, 3/1 IO, 5/1, 5/1 IO, 7/1 and 10/1
• Fixed Rate terms too...  15 yr, 20 yr and 30 yr fixed
• 1 day off MLS Refis (90 day off MLS needed for cashout)

Recently we have completed a special report that highlights ways to purchase a home for as little a Zero down. Other programs allow for $100 or even $500 utilizing FHA financing on cetain properties.  Are you a first time buyer or a buyer with little cash?  Why not read the report.  The report can be accessed online at http://www.Slideshare.net/mnguru in addition to other special housing, credit, and tax credit reports.  To receive the report as a PDF in your email and to be on our mailing list, vist us at http://www.MinneapolisStPaulHomes.biz

This information was just provided to us in an email from MyCommunityMortgage.  It is an excellent summary of the new law regarding home ownership and the distressed home situation we are facing as a nation.

Making Home Affordable Program (MHA)

On March 4 the Treasury issued Uniform Guidance for two distinct and different programs under President Obama's "Making Home Affordable" plan which is the Administration's strategy to get the housing market corrected: The two programs include:

1.      Home Affordable Modification - Details can be found at: http://www.ustreas.gov/press/releases/reports/modification_program_guidelines.pdf.

2.      Home Affordable Refinance - Details can be found at: https://www.efanniemae.com/sf/guides/ssg/annltrs/pdf/2009/0904.pdf

http://www.freddiemac.com/singlefamily/service/mha_modification.html

Home Affordable Modification Program:

Eligibility and Verification

·         Loans originated on or before January 1, 2009.

·         First-lien loans on owner-occupied properties with unpaid principal balance up to $729,750. Higher limits allowed for owner-occupied properties with 2-4 units.

·         All borrowers must fully document income, including signed IRS 4506-T, two most recent pay stubs, and most recent tax return, and must sign an affidavit of financial hardship..

·         Property owner occupancy status will be verified through borrower credit report and other documentation; no investor-owned, vacant, or condemned properties.

·         Incentives to lenders and servicers to modify at risk borrowers who have not yet missed payments when the servicer determines that the borrower is at imminent risk of default.

·         Modifications can start from now until December 31, 2012; loans can be modified only once under the program.

Loan Modification Terms and Procedures

·         Participating servicers are required to service all eligible loans under the rules of the program unless explicitly prohibited by contract; servicers are required to use reasonable efforts to obtain waivers of limits on participation.

·         Participating loan servicers will be required to use a net present value (NPV) test on each loan that is at risk of imminent default or at least 60 days delinquent. The NPV test will compare the net present value of cash flows with modification and without modification. If the test is positive - meaning that the net present value of expected cash flow is greater in the modification scenario - the servicer must modify absent fraud or a contract prohibition.

·         Parameters of the NPV test are spelled out in the guidelines, including acceptable discount rates, property valuation methodologies, home price appreciation assumptions, foreclosure costs and timelines, and borrower cure and redefault rate assumptions.

·         Servicers will follow a specified sequence of steps in order to reduce the monthly payment to no more than 31% of gross monthly income (DTI).

·         The modification sequence requires first reducing the interest rate (subject to a rate floor of 2%), then if necessary extending the term or amortization of the loan up to a maximum of 40 years, and then if necessary forbearing principal. Principal forgiveness or a Hope for Homeowners refinancing are acceptable alternatives.

·         The monthly payment includes principal, interest, taxes, insurance, flood insurance, homeowner's association and/or condominium fees. Monthly income includes wages, salary, overtime, fees, commissions, tips, social security, pensions, and all other income.

·         Servicers must enter into the program agreements with Treasury's financial agent on or before December 31, 2009.

Payments to Servicers, Lenders, and Responsible Borrowers

·         The program will share with the lender/investor the cost of reductions in monthly payments from 38% DTI to 31% DTI.

·         Servicers that modify loans according to the guidelines will receive an up-front fee of $1,000 for each modification, plus "pay for success" fees on still-performing loans of $1,000 per year.

·         Homeowners who make their payments on time are eligible for up to $1,000 of principal reduction payments each year for up to five years.

·         The program will provide one-time bonus incentive payments of $1,500 to lender/investors and $500 to servicers for modifications made while a borrower is still current on mortgage payments.

·         The program will include incentives for extinguishing second liens on loans modified under this program..

·         No payments will be made under the program to the lender/investor, servicer, or borrower unless and until the servicer has first entered into the program agreements with Treasury's financial agent.

                        Similar incentives will be paid for Hope for Homeowner refinances.

Transparency and Accountability

·         Measures to prevent and detect fraud, such as documentation and audit requirements, will be central to the program.

·         Servicers will be required to collect, maintain and transmit records for verification and compliance review, including borrower eligibility, underwriting, incentive payments, property verification, and other documentation.

·         Freddie Mac will audit compliance.

Home Affordable Refinance Program

Eligibility

• The refinancing option is only available for conforming loans owned or securitized by Fannie Mae and Freddie Mac.
• The property must be owner occupied.
• The borrower must have sufficient income to support the new mortgage debt
• The first mortgage may not exceed 105% of the current market value of the property. For example if the property is worth $200,000, the borrower must owe $210,000 or less.
• If a borrower has a second lien and the total debt on the property exceeds 105% the borrower may still be eligible for a refinance if the first lien does not exceed 105% of the value of the property and all junior lien holders agree to subordinate to the new first mortgage.
• Borrow cannot be delinquent on their mortgage (if they are delinquent use the Home Modification Program)
• Only transaction costs may be included in the refinanced amount.
• Both Fannie Mae and Freddie Mac have established toll-free numbers and web submission process to determine if a customer's loan is owned or securitized by Fannie Mae or Freddie Mac.

First Time Home Buyer Tax Credit as amended by the American Recovery and Reinvestment Act of 2009

Information about first time home buyer tax credits as amended by the American Recovery and Reinvestment Act of 2009 (HR 1).

The 3 changes to the first-time home buyers tax credit program include: 

Tax credit has been increased to $8,000.

Homes have to be purchased between January 1, 2009 and December 31, 2009

No repayment/recapture clause for homes sold after 36 months of occupancy and ownership.

The Tax Credit is for home buyers (either spouse if filing jointly) who have NOT owned a principle residence during the three-year period prior to the purchase.  Ownership of vacation property or rental property does not disqualify home buyers from this program.

The maximum credit is $8,000 or 10% of the home purchase, whichever is less.

The credit is available for homes purchased on or after January 1, 2009 and before December 31, 2009. 

To qualify for the full tax credit, married couples' modified adjusted gross income (MAGI) should be under $150,000 and single filers' MAGI should be less than $75,000. Partial tax credits may be available for married couples with MAGI incomes of over $150,000 but under $170,000 and single filers with incomes over $75,000 but under $95,000.  If married couples who qualify for the first-time tax credit file separately, they would both claim 5% of the home purchase or $4,000 each (whichever is less) on their tax returns.

Home buyers who qualify for this program, but who do not intend to purchase a home till the end of 2009, may elect to alter their tax withholdings (up to the amount of the of the tax credit) in order to save up money for a down payment.  However, if the purchase of the home does not occur, the taxes must be repaid to the IRS.

There is no recapture or repayment clause IF the home is owned for at least 36 months.

The effective date of purchase for new construction (even if buyer owns title to the lot) is the date the owner first occupies the house.  So even if construction began in 2008, as long as the home and buyers qualify for the tax credit, they will be eligible if they take possession any time during 2009.   However, new construction bought from the builder is only eligible if the settlement date (closing) takes place between January 1, 2009 and December 31, 2009.

The law allows taxpayers to elect to treat qualified 2009 purchases as a 2008 purchase so that they can receive the tax credit on their 2008 tax returns.

The full amount of the eligible tax credit is refunded to the buyer, regardless of whether the buyer has paid an equivalent amount in taxes. 

Call Venture Development to get pre-approved now for your home loan. We are your Minneapolis area mortgage broker serving the Twin Cities entire metro area.

CONSTRUCTION LOANS FOR MINNESOTA HOMES

We can usually provide the end mortgage financing when the home is completed.  For rehab or construction money, we have the FHA 203K.  We can offer you the 203K lite version as well as the full blown major 203K rehab.  We may have other options as well.  This is a product that changes rapidly.  Call us to see what we can offer you based on your specific situation. Our financing options for this product are almost exclusively for the owner occupant-not investors.  Our investor options are generally the "hard money" type of mortgage product.

As a Minnesota FHA mortgage broker, we can offer both FHA and conventional options. If you are looking at a house or real estate in MN and need a mortgage-call us at 952-285-4319.