Stated Income mortgages have been virtually eliminated. In Minnesoa, between Dodd Frank and MN DOC, ther is little or no room for this kind of loan at any level of downpayment. There may be a few rag tag, non conforming Brokers out there that will underwrite such a loan, but I hate to think what the interest rate would be. Being self employed for nearly 30 years, I know what you may be thinking about conforming loans and how hard the rules are on us, but as long as there is at least a credit score of 680, I have several reputable, conforming lenders to refer you to.... more
Its probably not what you want to hear, but I would highly suggest in your waiting period working to improve your credit score. There are free credit services out there that will help you understand your credit reports and give advice how to improve your number. The higher your score, the better rate you will eventually receive. Lower rates equal real money when you eventually get your next mortgage. The most important components are that you pay your bills on time and that you do not have any additional unpaid debts. Good luck to you!... more
I just read a statistic that 20% of local sales (Twin Cities) are cash deals. That signals to me that investors are out in force. My investor clients see huge bargains right now and are trying to take advantage of current low pricing before values go up. A very popular investment strategy right now is to buy a solid home at a good value and turn it into a rental. There are still many consumers out there who went through foreclosure and need a nice rental property until there credit clears and they can buy again in the future. These investors attempt to earn a nice return on investment with rental income. They also anticipate that when they do sell in a few years that home values will be higher and they will make a profit on their investment.
This scenario is not only possible, however, for the uber wealthy. With mortgage rates at record lows, if you have good credit you too can reap the benefits of this buyers' market. Personally, I am in the market to buy rental property as a way to save for my children's future. And I know many other real estate agents who are doing the same. When you see so many professionals gobbling up real estate, I think that is a pretty good sign its a great time to buy.
Good luck to you all and if anyone wants some help navigating this exciting and everchanging market in the Twin Cities, just give me a call. I'd be delighted to help! Tammy Maddrey 952-738-1331... more
I agree with everyone else that you ought to start the pre-approval sooner rather than later. As far as actually looking, it takes most people 3-6 months to be in the home after they start the process. Traditional sales are at the quick side, bank owned homes are in the middle and short sales can take up to 6 months to close! If you are looking at foreclosed homes be aware they will most likely be winterized in the colder months, so dewinterizing can add more time and a higher cost to you. I'd say March? Prices will spike a lot in May, so start early and remember as spring turns into summer prices go up. As summer goes into fall prices go down. When winter hits, prices are at rock bottom. Good luck!... more
â€¢ FHA & USDA require 3 years from the foreclosure sale date/when the home is no longer legally in your name (only 1 year if it was due to extenuating circumstances)
â€¢ VA requires 2 years from the foreclosure sale date/when the home is no longer legally in your name (only 1 year for extenuating circumstances)
â€¢ Fannie Mae & Freddie Mac require 7 years from the foreclosure sale date/when the home is no longer legally in your name (4 years if it was due to extenuating circumstances)
In all situations you need at least 12 months of re-established credit and 3 traditional trade lines, some lenders want 3 trade lines of 12 months each. Other than medical collections that can be properly explained, if there are any late payments or delinquent accounts (collections, charge-offs, judgments, tax liens) after the foreclosure then the time seasoning often starts over again from the latest late payment/delinquent mark (underwriter's discretion).
Having a verifiable on time housing payment history goes a long way to making an underwriter feel comfortable, as well as taking a pre-purchase housing counseling class with a budgeting/financial module. Practically anything you can do to prove that you have made & kept a vow to make all payments on time will be helpful.
Like Elliott said, local banks and credit unions may have special financing programs that do not conform to Fannie, Freddie, FHA, VA or USDA guidelines.... more
Most loans (all, except VA loans) contain what is known as a Due on Sale Clause that gives the lender an OPTIION to call the loan due if any interest in the property is transferred. This is also referred to as "accelerating" the loan. Contracts for Deed, Lease Options and Land Trusts could all trigger the due-on-sale clause. There is no magic way to avoid the Due on Sale Clause. There is a possibility the lender may discover the transaction and call the note due. If that happend, the Buyer must refinance at current interest rates and terms. If the Buyer can not qualify for a new loan, foreclosure could result.
"If all or any part of the property herein is transferred without the lender's prior written consent, the lender may require all sums secured hereby immediately due and payable."
Your mortgage might have different lanuage but the idea will be the same. The are no due on sale cops and if payments are made on time they probably won't call the note but they could.... more