First Time Buyer Class | Scott County Downpayment Assistance

First Time Buyer Class and Scott County Downpayment Assistance Programs and Help

Now is an incredible time to purchase a home in Scott County. Interest rates are at all time lows and home prices have dipped. I think we will see a lot more foreclosure activity in the next few months as the market has remain oddly low with inventory. More banks will start to release inventory and many deals on Scott County homes will

There are still spaces available in the upcoming Scott County Community Development Agency’s Homebuyers Clubs!

Upcoming club dates are:

December 2011 Homebuyers Club Schedule

Class 1: December 5, 2011, 4:00 p.m. – 8:00 p.m.

Class 2: December 7, 2011, 4:00 p.m. – 8:00 p.m.

Class 3: December 19, 2011, 4:00 p.m. – 8:00 p.m.

Class 4: December 21, 2011, 4:00 p.m. – 8:00 p.m.

 

January/February 2012 Homebuyers Club Schedule Class 1:
January 12, 2012, 2:00 p.m. – 4:00 p.m.

Class 2: January 19, 2012, 2:00 p.m. – 4:00 p.m.

Class 3: January 26, 2012, 2:00 p.m. – 4:00 p.m.

Class 4: February 2, 2012, 2:00 p.m. – 4:00 p.m.

Class 5: February 9, 2012, 2:00 p.m. – 4:00 p.m.

Class 6: February 16, 2012, 2:00 p.m. – 5:00 p.m.*

* Please note, the last class is three hours long.

Successful graduates of the Homebuyers Club that purchase in Scott County after January 1, 2012, may be eligible for a down payment assistance grant  of up to $3000. Grants are secured on a first-come, first-serve basis, and registration to the Homebuyers Club is limited.

Potential homebuyers are encouraged to participate in the Homebuyers Club early in the process.

The SCCDA’s Homebuyers Club uses the Home Stretch curriculum, meeting first-time homebuyer education requirements.

For more information on the Homebuyers Club or the down payment assistance, visit the Scott County CDA website  or call 612-384-2178.

Email Tom Scott of Remax Advantage Plus for a list of eligibility requirements

Please share this information with your colleagues and friends.

FHA Loan Limit Lowered for Shakopee MN Homes

What does this mean for the average first time buyer? Simply you won’t be able to buy Shakopee homes or other MN homes for sale over the new $318,550 loan limit and only put down the minimum 3.5% downpayment. This leads those who purchase Shakopee homes and want to contribute as little as possible their max purchase price with an FHA loan limit will be $318,550.

If your loan is not cleared for closing by underwriting by September 30th, 2011, you will be subject to the new loan limits going into place.

New Federal Program available for Homeowners on the Brink of Foreclosure

                On the brink of foreclosure?  The federal government has issued a new program that would give up to $50,000 dollars in “interest-free, forgivable loans” secured by liens against the existing home.  The loans would only be available to those in danger of foreclosure due to unemployment, underemployment or medical issues.  For all that apply, only 1,405 Minnesotan homeowners will be chosen from the pool of eligible applicants.  Applications will only be accepted through July 22, 2011.

                This program is supposed to reduce the number of foreclosures in the state by 5% or more, which is a step in the right direction considering the 25,673 foreclosures last year in Minnesota.  This will help current Minnesotans in foreclosure, but it is too late for people who have had difficulties from 2007-2010.  The program was created by HUD, which allocated over $50 million to use in Minnesota over the next two years.

                The main purpose of this new program is to help homeowners weather the downturn in the economy, but the program does reserve the right to cut off funding if a recipient’s income returns to original levels made two years prior.  Loans given to property owners will be forgiven by 20% every year, making the loans completely curable in five years.  However, government has set forth certain qualifiers to become eligible.  These qualifiers include:

  • Being unable to make mortgage payments for the past three months or longer.
  • Living in the house.
  • Have faced an income decline of at least 15% because of unemployment, underemployment, or medical issues.
  • Households of four within the Twin Cities must make less than $100,800 annually.

Once the July 22 application deadline is reached, applicants will undergo a more thorough screening process to become eligible for one of the 1,405 chances to receive a loan.  Given the unique nature of this program, many believe it is a one-time opportunity, so make sure to apply if you are an eligible homeowner!

If you would like to discuss your options, Tom Scott of Remax Advantage Plus and the Twin City Real Estate Team work with local attornys that would offer a free consultation and legal advice. Depending on your situation, the attorney may choose to work with you at no additional cost as they are also compensated by the bank during a short sale if you elect that as an option.

You can reach us at 612-384-2178 or TomScott@Remax.net

Purchase a Shakopee home for only 2% downpayment!

A good quality Shakopee loan officer I work with , Chris Aloisio, just wanted to send out a refresher email for a loan program she and Wells Fargo in Shakopee have to offer. The program is called the CDMP program if you want to mention it to her when calling.  This program that is unique to Wells Fargo is great for first time buyers. CDMP stands for Community Development Mortgage Program. Here are the highlights and information on the program:

Conventional loan–in house (not Fannie or Freddie), Not an FHA program either

2% down–NO MORTGAGE INSURANCE!!!

Income limit of $67,200 for a family of 4–income limits waived if buying within the city limits of Mpls or St. Paul

Down payment can be a gift

Owner occupied only

Homebuyer education is required UNLESS they have owned a home in the last 3 years and made their last 12 payments on time so do not have to be first timers

One debt ratio of 42% & can have a co-signer

Must be employed for one year

Self employment for 1 year with tax returns is acceptable (2 year requirement waived on this program)

Credit score of 620 with 3 tradelines

No cash reserve requirement

Home must be in decent shape, but cosmetic repairs are fine

One year rental history required

Todays rate, 6/3/11,  for this loan is 4.875% for a 30 year fixed.

This loan program is truely a great program. Although there are income limits to apply for the program your downpayment can be gifted which helps and credit scores can be as low as 620.  The biggest advantage to this program in my opinion outside of the obviously only 2% downpayment program is NOT HAVING MORTGAGE INSURANCE.  That portion can save you $100+ per month!

If you want more information about this program feel free to contact, Tom Scott of Remax Advantage Plus and the Twin City Real Estate Team at 612-384-2178

When purchasing a home, make sure to have your own representation. The person selling the home has their own representation

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Conventional or FHA Loans, Which is Best For You?

If you are thinking of purchaing a home with the next twelve months, consider talking with a loan officer prior to your home search to make sure you know how much you can afford and where you are comfortable with monthly payments. Craig Anderson of Rivercity Mortagage provided me with this helpful insight on loan programs and comparing FHA and Conventional loans.

FHA is increasing it’s monthly mortgage insurance premiums in April so it is time to compare both mortgages to see what works for your own situation.

Determining factors

Credit.  If you have a good credit score (ideally over 740), a conventional loan may make more sense than an FHA loan due to the fact that the monthly mortgage insurance premium will probably be lower than FHAs.  If your credit score is under 700, especially under 660, it will probably make more sense to go with an FHA loan as both the mortgage rate and availability of mortgage insurance for the conventional option will make the FHA option more affordable. 

Income. For a conventional loan, the limit on debt to income ratios is 45% and ideally 41%.  For an FHA loan, you can have higher debt to income ratios – usually a maximum of 50%.  Both options are going to require that the income be deemed stable and likely to continue.

Down payment and reserves. A conventionally insured loan will allow for a slightly smaller down payment, but is going to typically require that the borrower have at least two months worth of housing payments in reserves after closing.  An FHA loan will allow for a higher percentage of contribution from the seller to help pay the borrower’s closing costs and pre-paid items which may come into play on a smaller purchase price.

Interest Rate. The interest rate on FHA loans tends to be lower than that of a conventional loan, however FHA requires that the borrower pay a 1% funding fee that can be financed into the mortgage.  Often this addition to the loan amount will offset the monthly savings that the lower interest rate produces. 

If you know you have good credit and you have the ability to make a down payment of at least 5%, you may want to ask your loan officer about using a conventional mortgage instead of FHA. 

To contact Craig Anderson you can reach him at the office 952-908-3420 or on his cell phone 612-964-6620. Otherwise you can email him with questions or to get preapproved canderson@RiverCityMortgage.com

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