Minnesota First Time Home Buyer Real Estate Blog

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.


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...

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...

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...

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.


Why Would You Need a Home Inspection?

Today, I have a tip for first-time homebuyers regarding home inspections.

A lot of buyers will consider doing a home inspection when they’re purchasing a home, and it’s crucial for those buying for the first time.

Home inspections are crucial for first-time homebuyers

You should have an independent third party come to evaluate the property to make sure that you’re aware of all of its flaws. Hopefully, that list isn’t going to be too long, but either way, it’s important to know about those items before you close on the house.

A home inspector is typically a professional who will spend between two and four hours taking photos and testing various systems and appliances, looking for red flags. Sometimes, the inspection will turn up details that require further inspection, such as a faulty furnace or an issue with the electrical or plumbing. These further evaluations will be done by an independent contractor.

Inspections typically take place within the first five to 10 days after you sign a purchase agreement. The costs are paid upfront, and can run anywhere from $200 to $700 depending on what you’re having done. Talk to your agent about what the typical cost of an inspection is for the home you’re purchasing....

FHA Home Loan Checklist: Your Guide to Getting Approved

FHA Loans - Minnesota Home BuyersBuying a Minnesota home for the first time can seem like a daunting task, but that doesn’t mean it should be viewed as an unobtainable goal. But staying organized throughout the entire home buying process is important and will ultimately make finding and securing your new home a whole lot less stressful along the way. 

So, before you start looking for homes or even apply for a FHA home loan in Minnesota, take note of the following FHA loan checklist we’ve devised to help get you going in the right direction: 

Check your credit score - If your credit score is below 580, don’t apply for a home loan just yet. FHA loans require a minimum score of 580, and checking your credit score also gives you an opportunity to make sure everything is in order. 

Begin saving for a down payment - Although FHA loans only require a low 3.5 percent down payment, that’s still quite a bit of money you’ll need to have at your disposal. So devise a plan that helps you save, or check out our short list of tips for how to save for a down payment


FHA Loan Eligibility Explained

FHA Loan Eligibility ExplainedWhile the list of mortgage products out there today is actually quite extensive, FHA loans remain one of the top ways for first time home buyers in Minnesota to secure financing. Specifically designed to attract would-be home buyers with lower incomes or buyers unable to afford a substantial down payment, loans backed by the Federal Housing Association continue to help keep the dream of home ownership alive and well all over the U.S. 

If you’re unsure whether or not a FHA loan is right for you, here’s a brief rundown of FHA loan requirements and eligibility standards: 

Minimum Credit Score 

Although FHA loans help buyers with lower credit secure financing for a home purchase, you'll likely still need a credit score of 580 or higher.

Minimum Down Payment 

Prospective borrowers won’t need a 20 percent down payment with a FHA loan. In fact, you don’t even need 10 percent down. However, FHA loans do require 3.5 percent of the purchase price. 

Minimum Income 

While FHA loans don’t have defined income requirements, you’ll of course still need to provide proof you can afford a monthly mortgage payment. One way this is done is by making sure you don’t exceed a 43 percent debt-to-income ratio, and most lenders will even prefer you’re...

What Can I Buy with FHA Financing?

Buying a Minnesota home with FHA financing So, you’ve improved your credit score to a satisfactory level, you’ve either eliminated most of your debt or reduced it to below the FHA requirement of a 43 percent DTI, and you’ve gathered all your income documents to prove you can afford to take on a mortgage payment. The next logical question—now what? 

Well, the simple answer is, let the home search begin! But before you start diving into what’s currently on the market, it’s first best to understand exactly what you’re able to buy under FHA guidelines.

First and foremost, home buyers must be purchasing their primary residence when opting for a FHA loan. Vacation homes, a second home, and rental properties won’t be covered under FHA requirements. 

It is worth noting, however, that FHA financing CAN be used to purchase a family member a primary residence, and you’re also allowed to buy a duplex home using a FHA loan, as long as you live in one of the units for a minimum of one year. 


What Is Debt-To-Income Ratio and How Can it Impact Me as a First-Time Home Buyer?

What is Debt-to-Income RatioIf you’re a first time home buyer in Minnesota and have already started researching financing, chances are you’ve come across the words ‘debt-to-income ratio.’ Regardless of whether you’re looking to take out a FHA loan or a traditional mortgage with 20% down, lenders still need to determine each borrower’s ability to repay the loan and manage a monthly payment. 

One such method in deciding affordability is comparing a prospective borrower’s overall debt with his or her overall income—a personal finance measure known as debt-to-income ratio. 

Debt-to-income ratio, or DTI for short, is calculated by dividing recurring monthly debt payments by gross monthly income, which is then expressed as a percentage that equals how much of your gross income is already committed to existing debt.

For example, if your total debt equals of a $200/month student loan payment, a $300/month car payment, and a $1,000/month mortgage payment, and your total monthly income is $4,500, you DTI would be $1,500 ÷ $4,5000 =0.33, or $33%. 

As a general rule, most lenders prefer a debt-to-income ratio to be lower than 36%, but...

Are FHA Loans a Good Idea For First-Time Home Buyers

FHA Loans Minnesota Home BuyersThe primary objective behind a typical FHA loan is to provide low to moderate-income home buyers a more affordable way to purchase a home. 

FHA loans also cater to prospective borrowers with lower credit scores or buyers that don’t have the means to put down 10 or 20% for a down payment, effectively making it the ideal mortgage product for first-time home buyers in Minnesota, and especially if you don’t qualify for a “traditional” home loan in today’s complex lending marketplace. 

If you’re somebody who may be looking to make the transition from renting to owning, a FHA loan may be worth looking into. In most instances, getting approved for a FHA loan means you have a credit score that is at least in the 600s, are still able to put down a three and a half percent down payment, and still have a relatively low debt-to-income ratio. 


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

Down Payment For a HouseWondering how much money you’ll need for a down payment on a house? Well, generally speaking, the higher the down payment, the lower your mortgage payment will be each month. But for many would-be home buyers out there, how much you’ll spend each month isn’t as big of an issue as how much money you’ll need upfront for the down payment.

In most instances, buyers will need to put down anywhere from 3 to 20% of the sale price, and that amount largely depends on the loan type. With a 30-year fixed-rate FHA mortgage, you’ll need a minimum of 3.5% down. Most conventional loans require a 20% down payment if you don’t want to pay for mortgage insurance, which typically costs between $30 and $70 per month for every $100,000 borrowed.

Certain federal programs, like VA Loans for example, don’t require any down payment, but you’ll need to meet various requirements in order to qualify for any government-assisted home loan program.


How Long Does it Take to Buy a House?

How Long Does It Take To Buy a House in Minnesota Wondering how long it will take to buy a Minnesota home? Well, that all depends on quite a few factors. While we’d all like the home buying process to be quick, easy, and relatively stress-free, sometimes that just isn’t the case.

The best way to determine how long it takes to buy a home is to break down the home buying process step-by-step:

How Long Does it Take to Get Pre-Approved?

The first thing you’ll want to do is get a pre-approval letter from a lender. But what does that entail? Well, again, this all depends. But you can reasonably expect about 18 days from the start of the process until all your financials are review and a commitment letter is issued.

How Long Will a Home Search Take?

Market conditions often dictate how long it takes to find a home. Are you in a sellers market, or is inventory strong and favoring home buyers? If options are plentiful, chances are you’ll find the right home faster. But realistically, expect your home search to take a minimum of 3 weeks; and that’s in a good market and only if you’re diligent about your search.

How Long Will Closing Take?

Believe it or not, one recent study found that it takes 50 days on average to close on a property. But between inspections, property title review, mortgage funding,...

How Can I Rent And Save For a House?

How to save for a down paymentIt’s safe to say that most people would rather buy a home or condo instead of continuing to rent and pad a property owner’s pockets, especially right now when rent prices all over the country continue to spike. But if you’re someone who is finally looking to make the long-awaited transition from renting to owning, the pressure of buying a home probably feels greater than ever.

For example, did you know that NerdWallet recently estimated that it would take most Millenials over six years just to save up for a 6% down payment? Furthermore, statistics also show that inflation-adjusted rents have skyrocketed 64% from 1960 to 2014, while wages have only jumped 18% during that same timeframe. So with the cost of living so high for renters right now, just how are first-time home buyers supposed to save for a down payment? Well, here are just a few suggestions we’ve come up with that you may want to consider.

  • Pay down credit card debt - While this may seem like an odd suggestion right off the bat when the objective is to save money, paying higher-interest credit card rates only makes it harder to save money over the long-haul, ultimately preventing you from reaching your goal. Furthermore, paying down your debt will also improve your credit score and also your chances of securing a home loan when you’re ready to apply, so it’s really a win-win.
  • ...

What is a Down Payment on a Home? We Break It Down Here

Down Payment Info While it’s safe to say most of us know what a down payment is at its core, many first-time home buyers still aren’t sure what a down payment entails, especially in today’s market. So let’s break it all down and start from the top:

Why do lenders require a down payment?

Simply put, when buyers fork over a significant amount of money upfront, there’s even greater incentive to make monthly payments moving forward so that money isn’t lost in a foreclosure.

What’s the minimum down payment you can make?

Most mortgage lenders require at least a 3% down payment, and FHA loans require 3.5% down. But depending on your credit history specifically, you could be forced to make a down payment of 3, 5, 10, or even 20 percent.

The downside of a smaller down payment

Any down payment made under 20% will require you to purchase mortgage insurance. Private mortgage insurance (PMI) will be one option, and FHA insurance is another. An FHA-insured mortgage is generally the most common mortgage insurance route to take, which means you’ll pay an upfront premium along with monthly premium payments.  In addition to mortgage insurance, making a smaller down payment might also mean you’ll likely pay a higher interest rate, or perhaps even higher fees at closing.


Buying a House For The First Time: Where to Start

Buying a Minnesota HomeBuying a home for the first time sounds like a great idea, until you dive deeper into the process and learn more about the ins and outs of what it all entails. It’s hard to argue that buying your first home seems like a daunting task on the surface, but just like riding a bike, driving a car, or the countless other things you’ve had to learn or do for the very first time, we promise you’ll survive and be better for it once you sign on the dotted line.

But to make life a little bit easier for you as you begin your first-time home buying journey, we’ve devised a checklist of sorts for you to follow along the way:

Review your financial situation thoroughly

First things first—figure out if you’re even in a position to buy before doing anything else. How much credit card debt do you have? Do you have a savings account with at least 3 months of living expenses built up? How much money do you have for a down payment? Are you also able to handle closing costs and other additional expenses related to buying a home?

Meet with a lender before searching homes

Meeting with a lender to determine how much you can afford certainly makes sense, but it’s also important to get fully pre-approved before looking for a home or making an offer. Most home sellers won’t even entertain an offer without a pre-approval, so don’t waste your...

Minnesota Vikings Parting Ways With Ragnar

For over two decades, Ragnar and the Minnesota Vikings have been synonymous with one another. The Vikings mascot has been on the sidelines, pumping up the crowds and dressing as a Viking at home games dating back to 1994. Now, with Ragnar and the Vikings unable to reach an agreement via contract negotiations, it appears Ragnar will have to watch the Vikings games from his home and not the TCF Bank Stadium sidelines.

According to a source close to the negotiations, Ragnar made $1,500 per game last season; he was seeking a new contract with the Vikings that would cover the next ten years. He also wanted $20,000 per game over that time span. That's quite a raise he's asking for, to say the least.

While the Vikings community is up in arms over the whole ordeal, even going as far to create an online petition with over 10,000 signatures to date, it seems like the Vikings have to stand their ground here. $20,000 per game is a lot of money to pay for someone to dress up as a Viking and dance around on the sidelines. As iconic as Ragnar has been within the Vikings community, it's hard to argue any mascot is worth that type of coin. With eight regular season home games each year, Ragnar would make an estimated $1.6 million over that ten year contract.

It remains to be seen how this will all play out, but at this moment, it appears the Vikings and their long-time mascot will be parting ways. The story is sad, but it makes sense to me. Even as rich as the Vikings owners are, and as much as the team is worth, a mascot shouldn't get $1.6 million to be a mascot for ten years.

The Vikings will play their next home game this Sunday versus the San Diego Chargers. Vikings fans may have to get used to seeing the sidelines without their favorite...

St. Paul Saints Old Home Getting Demolished

The St. Paul Saints have their new home in Lowertown, the beautiful CHS Field. While I myself think this new ballpark is truly spectacular with great sight lines throughout, I didn't really stop to think about the fate of the Saints old home, Midway Stadium. Some of my earliest baseball memories are from Midway Stadium; it pains me just a bit to hear this is the week the old stadium faces its last breath: demolition.

The demolition began yesterday, August 19, and will take a full week to complete. The grandstand along the third baseline was the first victim of the heavy machinery charged with leveling the stadium.

The old murals that covered the walls, something I always cherished about the unique ballpark, will soon be nothing but a memory. With the Minnesota State Fair so close, I was hoping to be able to see the ballpark one more time on my way to the fair. The space will be nothing but a flat piece of land with some piles of rubble by the Great Minnesota Get-Together.

The stadium, though dated in even its last days of service, doesn't look like it used to. Graffiti, litter and overgrown grass and shrubbery now dominate the once proud space. Because the stadium is mostly a ghost land, the demolition is completely necessary, though bittersweet. The baseball has left and moved to Lowertown, but for many Minnesotans, the memories of the Midway Stadium will never fade.


Como Conservatory Celebrates 100 Years

A celebration of 100 years is no small deal, and the Como Park Zoo and Conservatory will celebrate the 100th year of the Marjorie McNeely Conservatory this weekend. This beloved building is reason enough to visit the Como area, with the beauty of the building showing both during the day and at night.

The Como Park Zoo and Conservatory will be taking this weekend to celebrate the 100 years, beginning with a ribbon cutting ceremony at 9:30 AM on this Friday (June 19). This will take place at the recent addition, the Centennial Garden. This space is a stylized take on the traditional European landscape gardens which used to bring visitors to the gardens in the early 20th century.

The weekend will host gardener exhibitions and discussions, musicians, the illumination of the conservatory dome on Friday evening (a gorgeous sight) and much more.

To check out the full spread of activities, visit: comozooconservatory.org.

Photo courtesy of: Richard Yuan