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Sheryl Petrashek's Blog

By Sheryl Petrashek | Agent in Apple Valley, MN
  • 4 Reasons Financing Condos can be more expensive than Townhomes…

    Posted Under: Home Buying in Lakeville, Home Selling in Lakeville, Rent vs Buy in Lakeville  |  January 28, 2013 12:16 PM  |  170 views  |  No comments

    Buying a Condominium in today’s real estate market is more difficult and sometimes more expensive than buying a Townhouse. The reasons are related to financing and insurance.  Click here for a definition of the difference between Condos and Townhomes.

    1) Condominium Complexes must have prior approval by FHA, the Federal Housing Administration, before buyers can obtain an FHA loan. Buyers are currently using FHA loans because they have the lowest downpayment obligation of just 3.5%.

    2) Condominiums need an HO-6 insurance policy before lenders will agree to put a mortgage on the property.  An HO-6 is a special policy providing both some coverage for the contents of an individual unit and some personal liability coverage.

    3) Lenders require a special disclosure from the association for which a 200-400 fee is not unusual.  This fee is then paid by the buyer as part of their closing costs.

    4) On Conventional lending, those loans not guaranteed by the government, many lenders charge a higher interest rate on loans for Condominiums.

    When shopping for a property in Apple Valley, Eagan, Lakeville, Farmington, Rosemount, Burnsville,  Savage or Prior Lake be sure to pay attention to the legal description. It’s a misconception that  all Condos are in buildings with long hallways and elevators.

    If you wish to know the status of an individual property, or the value of your own home, just click here and send me the address along with your request.

    Read what Sheryl’s clients say about working with Sheryl and the Selling South of the River Team!

    Click here to Search for all homes listed in Rosemount!

    Click here to contact Sheryl if you would like her to ”Sell my Rosemount Home!”

  • 3 Reasons to Rent your Townhome and Buy a House Now….

    Posted Under: Rent vs Buy in Lakeville  |  October 4, 2012 11:15 AM  |  154 views  |  No comments
    All signs are pointing to a brighter housing market in Minnesota!
    If you have been waiting on the sidelines, hoping to jump into the market and buy a home before prices increase, Get Ready, Get Set, Go!
    “But, Sheryl, I can’t sell my current townhome because I owe more on the mortgage than the value of the property?”  If you can secure a new mortgage without selling your townhome consider renting it this upcoming year and buying now.
    There are 3 important reasons to act this year.
    1) Home prices will begin to rebound and strengthen sooner and faster than townhome values.  The reason for this is just simple market forces.   In Lakeville, Apple Valley, Eagan, Rosemount and Farmington we reached a point of over saturation in the number of he townhomes built by 2006.  It will take some extra time before the townhome demand catches up with the over abundance of property.
    2) The Interest Rates are so low, this is a ‘once in a lifetime opportunity’.  I don’t think interest rates are going to rise dramatically in the very near future.  It will really depend on what happens in the Economy.  The Fed recently announced they will continue QE-3 indefinitely.  However, make no mistake about it, there will be a point in the fairly near future when we will look back and say, “Wow, I should have gotten a house when interest rates were 3.5%.”
    (As a side note, I wonder how the market will adjust when, let’s say in 2016 the interest rates for mortgages are back to the 6-7% range? There will be many homeowners who decide to stay in their home longer to avoid having to buy a house at a higher interest rate.)
    3) The Rental market is Hot and you should be able to secure a good renter for the next two years.  There are so many people who have been displaced through foreclosure or short sales, they need to rent for 3 years before they can qualify for a mortgage.  Many renters in our area were once homeowners and wish to purchase again, they understand the importance of maintaining a home and keeping it in good condition.
    Qualifying for a mortgage while you own a property with a mortgage is not easy.  If you can qualify, seriously consider buying a home now, at one of the lowest prices possible, at the best interest rates ever, rent out your townhome and then sell it in two years when you can break even, or maybe even make a little money from it.
    One more benefit of buying now is that many mortgages are assumable with qualifying, including all FHA loans.  This means when rates are higher in a few years,  homeowners with low interest rates can offer an assumable mortagages of 3.5%, a real advantage for your re-sale value.
    Call me for a quick analysis of your situation, 612-889-6496.  We can likely just chat on the phone and determine if it’s worth scheduling an appointment with a mortgage officer.
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