Minnesota First Time Home Buyer Real Estate Blog

How to Find a Lender that Offers Down Payment Assistance

First-time homebuyers often approach us to ask whether they can use two separate lenders to finance their deal. Generally, this is so that they can make use of a down payment assistance program the lender they were pre-qualified with doesn’t offer. Unfortunately, this isn’t possible. Not every lender is approved to offer these programs, which is why it’s so important to research any professional you’re considering hiring before you begin working with them. Our team has a list of local vendors who we’d be happy to recommend to you, so please reach out if you have any questions.

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How Essential Is a Good Credit Score When Buying?

We’re often asked whether credit score plays a role in the type of financing that you can get, and the answer is: It really depends. For first-time homebuyers, a lot of you will depend on down payment assistance programs and it probably won’t have a huge impact on your interest rate. If you’re buying a second or third home, however, your credit score could have a much larger impact.

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Top Bike-Friendly Neighborhoods in Minneapolis

Bike Friendly Neighborhoods Minneapolis Did you know that Minneapolis is widely thought of to be one of the most bike-friendly cities in the country? In fact, according to Redfin and WalkScore, Minneapolis has more bicycle infrastructure than any other U.S. city, which is perhaps the biggest reason why it’s considered so bike-friendly. 

Perhaps now more than ever, access to public transportation and outdoor recreational amenities are highly important to prospective home buyers, especially young home buyers and those looking to buy for the first time. 

So with this in mind, just which Minneapolis neighborhoods are tops when it comes to bike-friendliness? We list several below: 

Lyn-Lake - Bike Score: 99

Almost acting as an extension of the Uptown district, there’s plenty to do all around Lyn-Lake, which includes hitting all the shops, restaurants, and boutiques along Lake Street and Lyndale Avenue. Just north of the neighborhood is also the Midtown Greenway bicycle and pedestrian path, helping make it one of the city’s bike-friendliest neighborhoods. 

Dinkytown - Bike Score: 99

Dinkytown is located right near the University of Minnesota campus, which means plenty of bike lanes and pathways for locals to use and access. Not surprisingly, it’s also one of the city’s more vibrant neighborhoods and there’s also no shortage of bike shops here as well. ...

Top Mortgage Lenders For First-Time Home Buyers in 2019

Best Lenders For First Time Home Buyers As a first-time home buyer, there’s no doubt you’ll have plenty of decisions to make along the way. Along with the daunting task of finding the right real estate agent and also the right home or condo, you’ll also need to choose the right lender that fits all your individual financial needs as well. 

For many, financing will be the biggest hurdle to clear when buying a home for the first time, which makes finding the right lender and the right mortgage product a crucial component to the home buyer process. 

Recently, Nerd Wallet unveiled a short list of which mortgage lenders are the best for first-time home buyers specifically, and here’s what they provided: 

Quicken Loans 

  • Minimum credit score required: 620 
  • Minimum down payment required: 3%
  • Summary: Quicken Loans has all kinds of tools that help educate first-time home buyers on the process and what’s required for a smooth and successful experience. And in addition to an easy online application process, Quicken also offers custom fixed-rate loan terms that range from 8 to 30 years.

Chase 

  • Minimum credit score required: 620 
  • ...

How To Get Rid of Mortgage Insurance

Many homeowners often ask me how to get rid of their mortgage insurance. Typically, you need about 20% equity in your home, whether that was from a 20% down payment or from paying enough of your mortgage balance. However, there are some types you can’t get rid of, such as FHA insurance or those with more stringent guidelines. You’ll often be given multiple options you’ll want to weigh out when purchasing a property. We’re happy to help you figure out the best plan and answer any other questions you have.

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What First-Time Homebuyers Need to Know About PMI

First-time homebuyers ask us all the time: “What is PMI?” PMI stands for private mortgage insurance, which you will have to pay if you put down less than 20% on a home. This added layer of insurance protects the lender’s investment in the property. If you put down 3.5%, for example, that means the lender owns 96.5% of the home, and PMI makes sure they’re covered for that full amount if you can’t repay that debt. Essentially, the more money you can put down, the less your PMI will be on a monthly basis. To hear our full message explaining what PMI is, watch my latest video.

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Explaining an Important Real Estate Term: DTI

If you’re like most first-time homebuyers, you’ve probably wondered what the term “DTI” means. This common abbreviation stands for debt-to-income ratio, but knowing this alone isn’t really enough to answer the original question. Debt-to-income ratios are especially important to the lending side of the real estate process, and today I’d like to go a little more in-depth into what this phrase refers to and why it matters to you. To learn more, watch this short video.

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How Much Do You Need to Save for a Down Payment?

People often ask us how much they should really save to buy a home. This will depend on a few factors. To give you a short answer, there are many favorable loan programs here in Minnesota that will allow you to secure a mortgage for as little as $1,000. However, the financing option you choose will depend on your circumstances. Not all down payments will look the same. We would be happy to help answer any additional questions you have on this subject, but, for now, you can hear today’s full message by watching this short video.

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4 Reasons Why Fall is a Great Time For First Time Home Buyers to Make a Move

Buying a House During FallThinking about buying a home this fall? As previously mentioned, fall can be a great time to save money on the purchase of a new home, but the advantages to buying during the autumn season don’t just stop there. Here’s a closer look at what other reasons suggest fall is a great time for first time home buyers to make their move.

  • Less buyer competition

Spring and summer are when buyers are usually most active, which means you’ll likely be dealing with less competition after Labor Day. And although you may have fewer options to choose from, there’s something to be said for reducing the risk of a multiple offer situation.

  • Sellers are motivated

If a home has been on the market all spring and summer, chances are the seller is beyond ready to make a deal. This is what we in the business call leverage. Remember, the longer a home sits on the market, the more motivated sellers become.

  • The holidays are approaching

Almost every home seller wants to get their home sold and get settled into their new place before the busy holiday season arrives. This can also put you in the drivers seat during a negotiation, and we’re sure you’d love to be settled into your new place before all the holiday parties and festivities...

5 Tips For Choosing the Right Real Estate Agent

Choosing the Right Real Estate Agent We’ve all heard it before—buying a home is one of the biggest financial decisions you’ll make in your lifetime. Whether or not you agree is one thing, but at the very least it’s fair to say that buying a home is always a pretty big decision, regardless of whether you’re a first timer or a seasoned home buyer with plenty of experience.

Given the magnitude of whatever decision you inevitably make, aligning yourself with the right real estate agent along the way is also choice that shouldn't be taken lightly. But just how do you  know who might be the right fit? Believe it or not, finding the answer to that question tends to be easier than you might think. We explain below by identifying 5 crucial tips for picking a great real estate agent..

  • Research agent reviews

With everything online nowadays, chances are any quality agent will have lots of reviews and testimonials from past and present clients. From here you can gauge how often he or she has worked with first time home buyers and also what the experience was like for them.

  • Gauge the agent’s knowledge of the area you’re searching

It’s a real estate agent’s job to know the market, so ask questions about recent comparable properties that have sold or what other comparable properties are on the market that might also be a good fit. If your prospective agent has all the answers you’re looking...

4 Reasons First Time Home Buyers in Minnesota Should Consider a Condo

Buying a Condo As a First Time Home BuyerIt’s certainly no secret that buying a home for the first time will require you to make a number of big decisions, like where to buy, what type of home you want, and of course what sort of financing options to consider just to name a few.

While location and financing are of course critical components to any home search, the question of what to buy is also quite intriguing, especially for first-time buyers. In many ways, buying a house is truly the ultimate goal, but it’s important to note that condos can also be a great fit for any first time home buyer in Minnesota, and here’s why…

Lower Down Payment / Purchase Price

It shouldn’t be all that surprising that condos can be a more affordable option than a detached single-family home. As a result, this also means you won’t have to put quite as much money down, perhaps allowing you to buy sooner rather than later.

No Upkeep / Maintenance

While condos and other attached properties usually mean monthly or quarterly HOA fees, the trade-off is that you won’t have to worry about upkeep, on-going maintenance, or major exterior repairs. And along with saving you time, there’s also a level of comfort that goes along with the maintenance-free lifestyle that’s certainly appealing for a number of reasons.

Amenities

Buying a home with a swimming pool or an extra exercise room...

When is the Best Time of Year to Find a Great Deal on a Home?

When should first time home buyers purchase a home?If you’re in the market for your first home, decisions like where to buy, what can you afford, and who to work with all need to be made sooner rather than later. But along with all that, deciding when the right time to buy is also an under-appreciated component to the home buying process that shouldn’t be overlooked.

As you might’ve already heard, common belief is that the best time to purchase a home is sometime during the spring or summer, when inventory tends to be at its strongest.

But believe it or not, the fall season can also be an optimal time to find and get a great deal, which might be surprising to some soon-to-be home buyers out there.

According to an analysis from RealtyTrac that considered 32 million home sales over 15 years, buyers, on average, paid 2.6 percent below estimated market value at the time for their homes. And while that may not seem like a big deal, 2.6 percent of a $200,000 or $300,000 home is literally thousands of dollars in savings.

So as you begin the to find that perfect new home, remember the fall season may just present you with the best deals out there.

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How to Find out How Much Mortgage You Can Afford

How much mortgage can you afford? To answer this, you have to think of the three variables that loan officers look at: Income, debts, and credit score. Lenders look at income and debts to find your debt-to-income ratio. After this, they can decide what you may be able to pay. To find out more about this, watch my short video.

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Why You Need to Hire a Buyer's Agent When Purchasing a Home

I’m often asked about how to go about buying a house without hiring an agent. Honestly, you really do not want to do this. Today I will explain why having a buyer's agent is a good thing for you. To start, you should realize that buyer's agents are paid by the seller. To learn more, watch my short video.

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Top Minneapolis Neighborhoods First-Time Home Buyers Should Consider Right Now

Best Minneapolis Neighborhoods For First Time Home BuyersSo what makes a great neighborhood? Well, most answers you get to this question will largely depend on who you ask. But many first time home buyers might say it’s that perfect combination of affordability and close proximity to nearby amenities and attractions that truly make for the ideal place to look for a new home. 

In Minneapolis, plenty of neighborhoods offer all sorts of desirable characteristics from top-notch curb appeal to walkability and easy access to shopping, dining, and entertainment. Some neighborhoods are even defined by a certain trait or two, which may or may not help determine whether it’s the right location for you. If you’re a first time home buyer in Minneapolis, however, some neighborhoods will undeniably be a better fit, starting with the few we’ve listed below…

Bottineau 

Named for legendary pioneer Pierre Bottineau, the Bottineau neighborhood should be considered a great choice for any first time home buyer. Most streets are tree-lined and quiet, and most homes for sale in Bottineau were built pre-1940 and have plenty of charm and character throughout. Larger homes tend to jump up into the $300,000s but look for the majority of houses to price somewhere between $200,000 and $250,000.

Holland 

Holland has definitely seen a rise in popularity in recent months,...

Down Payment Assistance Frequently Asked Questions

Down Payment For a Minnesota HomeMost home buyers need to borrow money in order to purchase a home, which means they’ll also need to come up with at least some money up front for a down payment. And while the concept of a down payment might seem fairly straight forward, questions and answers regarding a down payment are much more wide-ranging than you may thing. Let’s take a closer look at just some of the down payment FAQs we’ve seen over the years below….

Q: Why is a down payment required?

A: Above all, a down payment can be a strong indicator that borrowers have the financial discipline to purchase a home and keep up with monthly payments. But along with that, more money down also helps minimize risk to lenders as well. Simply put, the larger the down payment, the less likely borrowers will default on an unpaid loan balance and lose whatever money was put down.

Q: Can a seller contribute to a down payment?

A: No, however sellers can contribute to other home buying fees like closing costs and inspection fees, which enables buyers to put more money down initially.

Q: Can I use funds from retirement accounts to make a down payment?

A: Although withdrawing funds from a 401K or other retirement savings account is possible, it isn’t recommended. In most cases you’ll be hit with heavy taxes or early withdraw penalties, which could end up costing you more in the long run.

Q: Why should I make a larger down payment?...

What Is a Standard Down Payment?

Many first-time homebuyers don’t understand what constitutes a standard down payment. The short answer is that there isn’t one. There are many good down payment assistance programs in Minnesota that allow first-time homebuyers get into a home with as little as $1,000 down, but ultimately the best down payment solution is whatever works best for you. We’d be happy to give you information to figure out what the best scenario would be for you. To hear more, watch my latest video.

Additional Down Payment Resources

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Down Payment & Closing Cost Loans: A Quick Overview

Minnesota Down Payment LoansSaving up for a down payment and the closing costs associated with buying a home may seem like a challenging, or even impossible, task for some buyers. But with various programs and government-backed financing options available to buyers just like you, buying a home might just be an obtainable goal, even without all that money up front. 

If you’re someone who may not quality for zero down financing, exploring Minnesota’s down payment and closing costs assistance programs should be your next course of action. 

In Minnesota specifically, The Minnesota Housing Finance Agency offers first-time home buyer loans of up to $15,000, which can be used for a down payment, closing costs, or a combination of the two. 

To qualify, borrowers must not have owned a home within the last three years, and must also have a credit score 640 while meeting the required income limits. In addition, this Monthly Payment Loan will also have an interest rate equal to your first mortgage rate, and the loan term can stretch out for as long as 10 years. 

For additional information about down payment/closing cost loans in Minnesota, ...

What Is the Average Down Payment?

Today we will be addressing a question we hear all the time: What does the average down payment on a home look like? The answer is not as cut-and-dry as some might think. On a national level, the average buyer tends to put down about 20% of the total purchase price. But first-time homebuyers often submit a far lower amount. To learn more, watch this short video.

Additional Down Payment Resources

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3 Minneapolis Condo Buildings First Time Buyers Will Absolutely Love

Minnesota First Time Home BuyersFirst time home buyers in Minneapolis have lots of choices to make, which may range from where to buy to what type of home you’ll actually be buying. For some buyers, purchasing a condo might be the right fit, especially if affordability is high up on your list of needs or wants. In Minneapolis, there's hardly a shortage of desirable condo buildings first time home buyers should consider, but here's a closer look at three that specifically stand out heading into the busy fall season.

15 S. 1st Street

Although the River Towers in Minneapolis were built back in the mid 1960s, condo residences here are some of the more desirable you’ll find anywhere. Floor plans are open and surprisingly spacious, and you’ll also be positioned right near the Skyway and light rail. Building amenities are also top notch and include tennis courts, a quiet library/lounge, a fitness room, and a huge courtyard with a swimming pool and sauna.

20 2nd Street

As part of the Falls and Pinnacle complex, 20 2nd Street might offer some of the best skyline views of any high rise in town. Floor plans mostly include studio, one, two, and three bedroom layouts, and most units have been recently updated to include newer kitchen and bathroom finishes,...