5 Factors That Decide Your Credit Score

Credit scores range between 200 and 800. Scores above 620 are considered desirable for obtaining a mortgage. These factors will affect your score.

1. Your payment history. Whether you paid credit card obligations on time.

2. How much you owe. Owing a great deal of money on numerous accounts can indicate that you are overextended.

3. The length of your credit history. In general, the longer the better.

4. How much new credit you have. New credit, either installment payments or new credit cards, are considered more risky, even if you pay promptly.

5. The types of credit you use. Generally, it’s desirable to have more than one type of credit—installment loans, credit cards, and a mortgage, for example.

For more on evaluating and understanding your credit score, go to http://www.myfico.com.

8 Ways to Improve Your Credit

Credit scores, along with your overall income and debt, are a big factor in determining if you’ll qualify for a loan and what loan terms you’ll be able to qualify for.

1.      Check for and correct errors in your credit report. Mistakes happen, and you could be paying for someone else’s poor financial management.

2.      Pay down credit card bills. If possible, pay off the entire balance every month. However, transferring credit card debt from one card to another could lower your score.

3.      Don’t charge your credit cards to the maximum limit.

4.      Wait 12 months after credit difficulties to apply for a mortgage. You’re penalized less for problems after a year.

5.      Don’t purchase big-ticket items for your new home on credit cards until after the loan is approved. The amounts will add to your debt.

6.      Don’t open new credit card accounts before applying for a mortgage. Having too much available credit can lower your score.

7.      Shop for mortgage rates all at once. Too many credit applications can lower your score, but multiple inquiries from the same type of lender are counted as one inquiry if submitted over a short period of time.

8.      Avoid finance companies. Even if you pay the loan on time, the interest is high and it will probably be considered a sign of poor credit management.

This information is copyrighted by the Fannie Mae Foundation and is used with permission of the Fannie Mae Foundation. To obtain a complete copy of the publication, “Knowing and Understanding Your Credit,” visit http://www.homebuyingguide.org.

 8 Steps to Getting Your Finances in Order

1. Develop a family budget. Instead of budgeting what you’d like to spend, use receipts to create a budget for what you actually spent over the last six months. One advantage of this approach is that it factors in unexpected expenses, such as car repairs, illnesses, etc., as well as predictable costs such as rent.

2. Reduce your debt. Generally speaking, lenders look for a total debt load of no more than 36 percent of income. Since this figure includes your mortgage, which typically ranges between 25 percent and 28 percent of income, you need to get the rest of installment debt—car loans, student loans, revolving balances on credit cards—down to between 8 percent and 10 percent of your total income.

3. Get a handle on expenses. You probably know how much you spend on rent and utilities, but little expenses add up. Try writing down everything you spend for one month. You’ll probably see some great ways to save.

4. Increase your income. It may be necessary to take on a second, part-time job to get your income at a high-enough level to qualify for the home you want.

5. Save for a downpayment. Although it’s possible to get a mortgage with only 5 percent down—or even less in some cases—you can usually get a better rate and a lower overall cost if you put down more. Shoot for saving a 20 percent downpayment.

6. Create a house fund. Don’t just plan on saving whatever’s left toward a downpayment. Instead decide on a certain amount a month you want to save, then put it away as you pay your monthly bills.

7. Keep your job. While you don’t need to be in the same job forever to qualify, having a job for less than two years may mean you have to pay a higher interest rate.

8. Establish a good credit history. Get a credit card and make payments by the due date. Do the same for all your other bills. Pay off the entire balance promptly.

For many aspiring homeowners, saving for a down payment is one of the biggest hurdles to homeownership. Are you looking for Down Payment assistance or know someone who could benefit?

The good news? Down payment assistance (DPA) programs are available to help bridge the affordability gap. But how do you apply for DPA, and what steps should you take to qualify? Let’s walk through the process, so you can secure the financial help you need to achieve homeownership.

Step 1: Identify Available Down Payment Assistance Programs and Check Your Eligibility

There are over 2,400 homebuyer assistance programs across the country, including grants, low-interest loans, forgivable loans, tax credits, and matched savings programs.

Eligibility varies by program, but common factors include household income, location, first-time homebuyer status, and the type of property you’re purchasing.

To quickly check your eligibility for these programs, you can use our Free Down Payment Assistance Search. Simply answer a few questions to discover what programs may be available in your area.

Duplexes, Triplexes and Fourplexes

Great for both those seeking income property or as an owner occupied home with tenants that help make your payments!  Check out these great income properties with the link below!

Duplexes, Triplexes and Fourplexes for FOR SALE

View the newest listings in the Twin Cities Area

GETTING THE HOUSE READY TO SELL; "STAGING" YOUR HOME

Now that you’ve made the monumental decision to sell, it’s probably time to think about what might be done to put the house in its best possible light for potential buyers. This might involve getting rid of clutter and sprucing up a bit, both inside and out. Find out what’s important and what’s not worth the time or money.

So, you’ve made the decision to sell your property sometime in the relatively near future—what’s next? We suggest that you start thinking of your house as a marketable commodity, and, although it may be difficult to do, attempt to remove emotion from the selling equation. Your goal is to get others to see it as their potential home—to neutralize it, so to speak, for marketing purposes.

REMOVING CLUTTER, THOUGH YOU MAY NOT THINK OF IT AS CLUTTER

You would like buyers to see your home and not it’s contents; to be able to visualize their furniture and their belongings instead of yours. Try not to get hung up on showing off Grandpa’s collection of trains, the kids’ artwork or your favorite piece of furniture. Box up everything you do not use regularly and donate it, sell it, throw it, or store it. Removing clutter is the hardest thing for most people to do because they are emotionally attached to everything in the house. After years of living in the same home, clutter collects in such a way that may not even be evident to the homeowner. However, it does affect the way buyers see the home, even if you do not realize it. Clutter collects on shelves, counter tops, drawers, closets, attics, and basements.

Take a step back and pretend you are a buyer. Let a friend help point out areas of clutter, as long as you can accept their views without getting defensive. If you have already selected an agent, let him/her help you too.

FIXING UP THE HOUSE INTERIOR FIRST

Many real estate advice books tell you to work on the outside of the house first, but unless there is a major project involved, consider starting on the inside. There are two main reasons for this. First, the first steps in preparing the interior of the house are easier. They also help develop the proper mindset required for selling—beginning to think of your "home" as a marketable commodity. Second, most professionals will agree that the exterior is the most important. Once you have developed the proper mindset for selling by working indoors, the more important exterior work should come easier.

Whether you start fixing up the inside or the outside first, it might be wise at this point in time to consider having a pre-inspection by a licensed home inspector. A complete inspection of your property will include areas such as plumbing, electrical, heating systems, fireplaces, foundation, roof, exterior and interior wall surfaces, windows and appliances. This eliminates worries and offers you peace of mind about the condition of the home. In addition, the inspection report generated for you by the inspector will itemize in great detail just what items need to be addressed in this pre-list "fixing up" stage.

COSTS OF REPAIRS

It’s probably wise not to do anything too expensive, such as remodeling. The best idea is to first focus on the items that give you the best return for you money.  If possible use savings to pay for any repairs and improvements; remember that part of selling a house may be preparing to buy your next home and charging up credit cards or obtaining new loans may affect your credit scores or hurt your ability to qualify for your next mortgage.

IT’S A TEAM EFFORT!

Enlist the help of all household members to get the house ready—and keep it ready—for prospective buyers. A few minutes spent tidying up each morning can make the difference for a showing in the afternoon.

WHAT DOES A REALTOR DO?

It bears repeating that a home is most people’s largest single investment. With that in mind, the primary purpose of a Realtor is to provide you with PEACE-OF-MIND in the selling of your home. The most important quality you are looking for in a real estate agent is TRUST. You want to be able to TRUST your agent to work hard on your behalf, to be very knowledgeable about the market, to listen carefully to your needs, to provide you with information and creative alternatives, and to always keep their promises. You can rest assured we take this commitment seriously!  The following is our pledge to you:

HOW DOES THE REALTOR GET PAID

As a consumer in the real estate market, you will benefit from the services of an experienced Realtor throughout the selling process, and it’s important that you understand how real estate agents are paid. Basically, you, as the seller, will pay a commission to the listing broker, not the specific agent, based on a percentage of the selling price. The listing broker then splits this commission with both the buyer’s broker and their respective agents.

Did You Know……

The fiduciary duties mentioned above are listed below and have the following meanings:

Loyalty - broker/salesperson will act only in client(s)' best interest.

Obedience - broker/salesperson will carry out all client(s)' lawful instructions. 

Disclosure - broker/salesperson will disclose to client(s) all material facts of which broker/salesperson has knowledge which might reasonably affect the client's use and enjoyment of the property. 

Confidentiality - broker/salesperson will keep client(s)' confidences unless required by law to disclose specific information (such as disclosure of material facts to Buyers). 

Reasonable Care - broker/salesperson will use reasonable care in performing duties as an agent. 

Accounting - broker/salesperson will account to client(s) for all client(s)' money and property received as agent.

If Seller(s) decide(s) not to agree to a dual agency relationship, Seller(s) may give up the opportunity to sell the property to Buyers represented by the broker/salesperson. If Buyer(s) decide(s) not to agree to a dual agency relationship, Buyer(s) may give up the opportunity to purchase properties listed by the broker.

You should feel free to discuss these agency representation options with your agent since it is important that you have a thorough understanding of every aspect of the real estate transaction.

Getting Ready for Closing (Settlement) 

Lots to do and so little time!  Everything that you need to know but are afraid to ask about the title search and title insurance, utility connections, property insurance, the final walk-through, review of the settlement statement, and the actual transfer of title at closing.

You’re finally in the home stretch. Closing—also known as settlement--is the last step, the official transfer of the property from the seller to you. The time between final acceptance of the Purchase agreement by the buyer and seller and closing is limited, so it is very important that all participants---the agents, lender, closer, buyer, and seller have an organized approach to the process and stay on top of all the details. Additionally, communication with the parties is extremely important to keep them apprised of the progress.

TITLE SEARCH/TITLE INSURANCE

A title is the document that verifies your legal right to your new home. To make sure there are no past errors or legal entanglements that might affect your ownership rights, all properties are subjected to a title search before closing, which the seller usually pays for. Sometimes, however, a title problem will unexpectedly surface days or even years later:

If a problem does occur, you’ll be glad to have the protection of title insurance. There are two kinds of title insurance: one that protects the lender only (required by most lenders) and one that protects you (optional). Don’t underestimate the importance of this coverage—it will protect you, the buyer, against title defects, easements, judgments or liens and will pay the court costs and fees associated with any claims, plus any other losses. It will also cover you and your heirs forever—even after you sell the property.

MAKE UTILITY AND PROPERTY INSURANCE ARRANGEMENTS

As you get closer to the actual date of closing, it’s time to contact the utility companies and apply to have the various services put into your name as of the closing date. We can assist you with telephone numbers etc if you’re not familiar with the area. Utility services to consider are: Natural Gas, Fuel Oil, Propane, Water, Sewer, Electric, Telephone, Cable or Satellite, and Trash Removal.

Also, this is the time to make arrangements for property insurance on your new home. You will be expected to have a homeowner’s insurance binder, with proof of one year’s payment, at closing.

FINAL WALK-THROUGH

It is time to schedule a final walk-through of your new home as close to the closing date and time as possible. We will coordinate with the sellers to make sure that the time you have chosen is convenient for them. This is the time to address any last minute issues concerning the home that you might need to clarify and finalize at the closing table and to make sure that everything you thought was included in the purchase agreement remains on the property.

THE SETTLEMENT STATEMENT

The Settlement Statement (also called the Closing Statement or HUD-1) is a document that presents a final, detailed accounting for a real estate transaction, listing each party’s charges and credits and the amount each will receive or be required to pay at closing. Closing companies usually try to send us a copy to the respective agents ahead of time so that we may review and possibly request changes, additions, or omissions to help facilitate a smooth closing process. We will also wish to review the statement with you prior to closing even though it will be explained to you in detail by the closer before you sign it.

WHAT TO EXPECT AND WHAT TO BRING TO CLOSING

Contrary to terror stories you may have heard, the typical closing proceeds without complications and only lasts an hour or so. It usually takes place at the office of the title company and we there with you. Primarily, you’ll sign numerous papers and documents, all of which will be explained to you along the way. You’ll finalize your mortgage, pay what’s due and get the keys to your new home!

Your Settlement Statement outlines the various expenses you’ll incur at the closing and gives you the final amount needed to close. Basically, you’ll need a certified or cashier’s check, payable to the closing company, that covers:

In addition, bring your personal checkbook to cover any extra charges, if necessary, a photo ID, your new homeowner’s insurance binder with proof of payment, and a list of your addresses for the past 10 years.

Whether you’re a first-time buyer or a repeat buyer, remember that the papers you receive at settlement are extremely valuable, so hold on to them! In the short-term they can help establish tax deductions for the year in which the property was purchased. In the future, such papers will be important for tax purposes when the property is sold.

So, CONGRATULATIONS! With the keys to your new castle in your hands (and perhaps a garage door opener) you’re on your way to what’s most important about a real estate purchase, enjoyment of the property and pride in ownership!

Make an Offer 

Those weeks of searching are about to come to an end, found the home you want.  Now is the time to write up an offer and start negotiations with the seller on your behalf.  There sure are a lot of confusing forms to sign! Once your offer has been accepted, it’s time to arrange for the inspection, finalize your financing, and have your lender make arrangements for the appraisal.

FORMS, FORMS, AND MORE FORMS

Buying a piece of real estate is anything but simple. State and Federal governments have created a lot of rules to help document all of the particulars in real estate transactions so that the consumer is fully informed. However, these useful consumer protection efforts lead to a lot of forms in a transaction, most of which need to be signed to be valid. "Required" and "optional" forms may differ in each state, but they can be a headache for the average buyers unless they are utilizing the services of a professional. We know which forms are required by law in MN and which might be necessary to make your offer more appealing to a seller or to protect your best interests in the transaction. The most common ones that you will probably be using are:

MAKING AN OFFER

Once you have made the decision to offer on a property, we will assist you in putting it into the form of a Purchase Agreement which, once accepted by the seller, will be signed as a legal contract by all buyers and sellers in the transaction. The dollar amount of your offer is based on a value that is determined by many different factors. The real value of the property to you is how well it fits into your pre-set goals and that value may or may not coincide with the listing price of the property. We will us our knowledge of the current real estate market and access to market statistics via the local MLS to come up with a fair, realistic offer price. Offers can be "colored" or made more appealing to the seller in several ways, not the least of which, of course, is to offer full list price or more.  A few other items to consider:

Different sellers are motivated by different things. In addition to price, a seller will look at the other terms of the offer, as indicated above, and be more willing to negotiate or even accept, a "clean" offer from a pre-approved buyer, even if the price is slightly lower.

COUNTEROFFERS AND WIN-WIN NEGOTIATIONS

Once the offer is written, we will coordinate and set up the offer presentation with the listing agent as quickly as possible, but the offer itself may be presented by either the listing agent or by use depending on the situation. The sellers will either accept the offer as-is and sign as required to finalize the contract, or they will reject the offer, or they may counteroffer as a means of keeping the negotiations open. Any one item or a number of items on the purchase agreement may be subject to a counteroffer, whereupon the sellers will initial the changes they made and sign the original offer before it is returned to us. Buyers will then accept the changes (by initialing), reject the counteroffer as being unacceptable, or initiate negotiating strategies of their own.

We often think of negotiation as a process where the person with the most information or the most leverage wins and the other party loses. Is there always a winner and a loser, or is that the case only if we choose to think that way? Times seem to be changing and Win-Win negotiation techniques are being accepted in the real estate world, with happier clients on both sides of the table as a result. An attitude of Win-Win negotiations which include compromise throughout the entire process is the most positive way to achieve your buying goals and eliminate anxiety.

MULTIPLE OFFERS

Multiple offers are not uncommon, particularly on a new listing or a very desirable property. We notify the listing agent by phone that you are in the process of writing an offer on the property and will be told if yours is coming into a multiple offer situation.  Once they have all been presented, the seller can choose to accept one and reject the others, reject all of them hoping they will all rewrite better offers or counter one and reject the others.

IF YOUR OFFER IS ACCEPTED

Now it’s time to get everyone together. All issues agreed to in the purchase agreement need to addressed:

Arrange for Inspection--If you have included an Inspection Contingency Addendum with your accepted offer, you probably have a limited amount of time to arrange for a professional inspection to carefully evaluate the property’s systems and structure. A comprehensive written report of any problems is well worth the cost that ranges from $200 to $400. It should take two to three hours and you should make every effort to attend.  Check that the company has liability and errors and omissions insurance. Then, you have recourse if they miss something that ends up costing you money. They should be member of ASHI (American Society of Home Inspectors) that has membership standards and a code of ethics. A detailed report should be provided by the inspector and it should cover:

You should also be aware that there are several companies which offer home warranty programs which cover certain home components including appliances, heating, plumbing, electrical, roof and foundation for a period of time, usually a year from the date of closing. There is typically a deductible to be paid at the time of service and only authorized repair vendors may be called, but your peace of mind may well be worth the premium that is paid at closing.

Finalizing Your Financing--The financing addendum to your purchase agreement probably includes a time frame during which you must finalize your mortgage application. If you have already been pre-approved through a particular lender, this procedure will be relatively simple; the lender normally requires a copy of the earnest money check, a copy of the purchase agreement and all pertinent property information including the legal description. The lender in turn will provide to the buyer, a Good Faith Estimate of Closing Costs or GFE. If you have not been pre-approved, the mortgage consultant you choose will probably require the following in addition to copies of the purchase agreement and earnest money check:

Appraisal—The lender will order the appraisal or valuation of the property immediately. Normally, the appraiser will contact the listing company to arrange a time for the appraisal. Payment for the appraisal is usually paid to the lender prior to closing

Find a Home 

How much home can I afford?  What are my Needs, Wants, and Dreams?  Rural or City? Which neighborhoods? Here’s what the process involves, from drive-bys to finding the home that’s got “your name on it”!

Once you have contacted a lender and are ready to start your search in earnest, it’s time to get down to the exciting task of letting looking at homes that meet your criteria and are currently for sale on the market.  These are a few of the things we'll need to discuss to insure we are looking at the right properties for you: