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Buying a Home in Minnesota: Define Your Property Search Criteria

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Mortgage and Lending with Guaranteed Rate NMLS #2611 NMLS ID # 389212

If you have already been through the first step of getting preapproved for mortgage financing to buy your first home in step 2Minnesota, the next step will be to define your property search criteria based on the types of financing you will be using.

Buying a Home in Minnesota

Step 2: Define Your Property Search Criteria

 

During the preapproval application we will have discussed what type of financing you will be qualified for. If you are buying your first home you might be using FHA, and/or funds from Minnesota Housing Finance Agency. If you have a larger down payment you might be using conventional financing. If you are eligible you might be using VA or USDA funding. Each of the programs will define the types of housing you might want to look for.buying a home in minnesota

When searching for homes on the internet you will be asked for search criteria. It is important to spend some time thinking about how you want to spend your time in terms of looking for houses.

Most of the housing stock in Minnesota will fall into four general categories:

1) Single-family houses

2) Multiple-family housing such as duplexes, triplexes, or four-plexes

3) Townhomes

4) Condominiums

You will need to decide what your goal is in terms of buying a home. If you prefer to own a home and minimize apply now the amount of work you will need to do to maintain it, you might be interested in townhomes or condos. If you want to earn income from the home to offset housing payments you might be looking for a multi-family home.

The type of home you want to buy will impact your qualifying power. For example, if you are looking for a townhome or condo, we will need to account for the association dues required in your debt ratio. Generally speaking you will qualify for a smaller mortgage when looking for this type of property as a result, but at the same time, these properties tend to be less expensive.

During the preapproval application I will have worked with you in terms of price ranges. If you are searching at the upper end of the price range, you will definitely want to check with me prior to making any offer to make sure that the tax and insurance payments fit within your qualifying.

You will want to define the area in which you are going to search. If your search area is too broad you might waste time looking at homes that are too far away from the location you ultimately want to end up in.

Be realistic in your setting your search criteria. If you are looking or features like 4 bedrooms and a swimming pool, be prepared that you might be outstretching your budget based on the available inventory.

For first time home buyers I like to note that a first home is often more modest than the house you grew up in! This is why they call your first home a starter home. I encourage you to be realistic when defining the search criteria when looking for homes.

When you are looking at the lower price ranges beware of fixer-upper types of homes. Mortgage financing will have requirements for the house itself that it needs to meet. A house that is in disrepair might not qualify for mortgage financing.

Search Criteria: Traditional, Foreclosure, or Short Sale

find homesIn today’s market you will have three main types of listings to pursue: Traditional sales, foreclosure sales, and short sales. Before you start looking at homes decide what your goal is as to when you want to move into a home.

Traditional sales and foreclosure sales in Minnesota will normally be a relatively quick closing. It is most common to make an agreement on a property and close on it within 30 to 45 days. The benefit to this is that you can take advantage of current interest rates and have plenty of market supply to search.

Short sales represent an opportunity for buyers who are okay with waiting several months to buy a home or for whom locking into current interest rates simply is not critical. Many buyers find short sales on the market, make an offer, only to wait for months while market opportunities pass them by and interest rates change.

Define what you want then go after it. If you want to be a homeowner and to get in to your home soon, choose a traditional sale or foreclosure sale. 

In my next post I will discuss what to look for when searching for your dream home.

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step 1 getting preapproved     step 2 define property search critieria   step 3 house hunting   step 4 purchase offer   step 5 the loan application    step 6 between application and closing    step 7 loan closing    step 8 monthly payments

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