Minnesota First Time Home Buyer Real Estate Blog

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,...

How Long the Home Buying Process Can Really Take

How long does it take to purchase a home? The truth is, there’s no cut-and-dry answer. Our team has helped some buyers purchase a home in just one week, while other buyers we work with may be looking at a process spanning several years. Things like your credit score, your financial situation, and the market’s current inventory levels will all be factors in the length of the home buying process. To learn more about this key subject, watch this short video.

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How Much Money Will You Need for a Down Payment on a House?


Many people, especially first-time homebuyers, often ask me how much money they need to save for a down payment. Well, according to studies conducted by the National Association of Realtors, the average down payment is around 6%. However, there are certain programs that allow for buyers to put even less money down. Some programs even allow buyers to forgo a down payment altogether. To learn more, watch this short video.

Additional Down Payment Resources

What Should Buyers Know About Closing Costs?

I’m back with another tip for first-time homebuyers. Today’s topic is closing costs. Most people will have some type of closing costs included when they close on a property. These costs can range anywhere from 1% or 2% of the purchase price all the way up to 5% or 6%. These costs include things like bank fees, funding fees, title fees, different state taxes, and other costs that get packaged together as “closing costs.”

Here’s the point I want to get across: You have a down payment to pay and closing costs to pay. You need to have all of those funds for closing. It’s really a good idea to talk to your agent and find a lender who really understands all the different first-time homebuyer programs out there. There is money out there for first-time homebuyers that will help alleviate some of the costs.

 

You have a down payment to

pay and closing costs to pay.

There is also an option of having the seller pay for your closing costs or wrap them into your purchase price. There are many different ways to do this...

What Is the Closing Process Like?

I’m here with the answer to a great question for first-time homebuyers today: How long does it take to close on a home?

Once you’ve found your dream home, how long do you have to wait until you get the keys? There are a lot of different things that happen during the process that you’ll have to get through first. The process starts with you signing a purchase agreement and ends with you getting the keys to your new home. The stuff that happens in between is the closing time frame.

The closing process typically
takes anywhere from 45 to 60 days.

During that time frame, there is an inspection that needs to be done. There are also loan documents that you'll have to get to your lender and an appraisal from the buyer’s lender to support the home’s value. There is also a title company who will do a search to make sure there are no liens or judgments on the property.

The closing process typically takes anywhere from 45 to 60 days. A lot of it depends on the type of financing the buyer has, but that’s a normal window. Getting a closing done in 30 days is tough these days.

If you have any questions for us about the closing process or anything else related to the real estate...

Home Equity And Net Worth: A Quick Overview For First Time Buyers

Home Equity Explained For First Time Home BuyersIn case you haven’t heard, home owners have a shockingly higher net worth over renters, and that gap only continues to get bigger as home values increase. But what’s even more surprising to those who haven’t yet taken the deep dive into home ownership is that this is still the case even as most “home owners” don’t actually own their home outright.

It’s safe to say that the majority of home buyers don’t have the means to pay cash for a home, and that’s especially true for first time home buyers. But taking out a mortgage doesn’t mean you can’t significantly boost your overall net worth, even if you only put down a minimal amount.

As each monthly mortgage payment is made, home owners continue to build more and more equity, which is essentially the difference between what your home or condo is worth and what you still own on it before the home loan is fully paid off. But just what does this mean for you as a soon-to-be home buyer and how can it help you down the road?

More Equity, More Options When It’s Time to Upgrade

The number one advantage to having equity in your home is that you’ll be able to use that money to help fund another purchase if or when it’s time to upgrade. This also means you might be able to borrow less, ultimately keeping...

The Shocking Difference in Net Worth Between Home Owners & Renters

Minnesota First Time Home BuyersChances are that by now, you’re well-aware of all the advantages being a home owner provides, which of course range from enjoying a variety of tax breaks to locking in a monthly mortgage that goes a long way in stabilizing your finances.

But did you also know that the net worth of home owners is well over 44 times greater than that of a renter? That’s right—according to the Federal Reserve’s most recent Survey of Consumer Finances, the median net worth of home owners spiked 15% to $231,400 since the previous report was unveiled back in 2013, while the median net worth of renters actually dropped by 5% to just $5,200.

While it’s true that saving for a down payment and ultimately buying a home for the first time can be a huge hit to your savings, the upside is that simply paying your mortgage each and every month continues to increase the equity in your home, which almost acts as a default savings account.  

So while deducting mortgage interest and property taxes from your annual income and locking in a long-term monthly payment are certainly great reasons to make the transition from renting to owning, home ownership is also one of the best ways to build family wealth, which may just be the greatest advantage of all.

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