Lynn Frantzen’s Blog

Deed in Liew of Foreclosure: Under certain circumstances, this option allows you to voluntarily deed your property back to your lender to payof your mortgage. Taking this action may not save your home, but it may help you ability to qualify for another mortgage in the future. If foreclosure is in your future you may want to discuss this with your lender and determine if it is an option. Read the fine print and make sure the lender is accepting this as “full” payment and will not be trying to collect the shortage in the future.

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I have really enjoyed using the Home Steps Program with my buyers. Unfornuately all good things do come to an end. Buyer’s must submitt an offer by January 31st, 2009 and close by March 14th, 2009 to use this program. Mainly these homes are advertised on the MLS with a price that already includes 3.5% of the selling price as seller paid buyer’s closing costs. The 3.5% is for owner occupied homes and is reduced to 1% if the buyer is a cash buyer and not using a mortgage. You will also see this advertised as the BCC Incentive short for Buyer’s Closing Costs.

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I have an amazing statement to make: Home Steps not only paid 3.5% of the buyer’s closing costs but they also agreed to install a new furnace. I had my clients include the furnace in the first offer we sent to the seller. The city truth n’ housing report stated that the current furnace was missing parts and the home needed a furnace for FHA financing. The first time we approached the seller with this we were told to not even bother submitting the offer. We waited 2 weeks and tried again, this time they were receptive to our request. It is really nice to see the bank owned homes helping the new buyer’s get in with a conforming loan. Thank you Home Steps!

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Today I showed a wonderful older farm home in Young America - west of the twin cities. The home could use some updates but the floors and walls are all straight and there is the most awesome porch overlooking nature. I pictured this porch as a main floor master bedroom. WOW! I am amazed at how much land and home a buyer can find right now with good interest rates and rural housing zero down money available. The brokerage I work for has 3 acreage properties that are all foreclosures currently listed and another on the way. These are all fantastic opportunities for the buyer.

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In the past couple of weeks I have shown several homes that were advertised as Homesteps Homes. I had to do some looking into this last week. It is a bank that is offering 3.5% seller paid closing costs if you purchase their property and an additional incentive to the realtor. It only applies to these specific properties and can be used with any mortgage lender and any realtor. When you see a listing that includes this the price is already figured with the 3.5% seller paid closing costs. It is just a way for the bank to clear their books of some of these foreclosures. They are only offering this amount for owner occupied homes and are giving preference to owner occupied vs investment buyers. The time frame that this offer is good thru is Oct 23, 2008 to Jan 31, 2009 for the purchase agreement and must close by March 14, 2009.
There websites www.homesteps.com

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Credit Scores are hard to understand and explain. Each Credit Scoring Company uses a slightly different formula for figuring the score. A general thought is that 35% of your score is based on your history, do you make your payments on time. 30% on the total amounts owed on each account, you do not want to have your credit cards maxed out. 15% on how long you have had a credit history. 10% on how many new credit inquiries, how much credit are you currently applying for. 10% on the type of credit, mortgage vs. visa.

Here are a couple of websites you can check your credit reports at www.annualcreditreport.com and www.myfico.com

On average 70% of all credit reports contain at least 1 error that should be corrected or removed. It is also possible to add a consumer comment to explain your case.

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If you needed more proof that now is the time to buy a house, we just got the word today. As a result we saw a swift drop in mortgage rates across the board today. The Fed has made a massive move to unlock the credit markets that so far have resisted all attempts to light the fire. In a surprising move this morning the Fed announced an $800B spending binge that may finally get mortgage rates down even more. The move is Bernanke’s attack on deflation and getting credit markets functioning again. “This action is being taken to reduce the cost and increase the availability of credit for the purchase of houses, which in turn should support housing markets and foster improved conditions in financial markets more generally,” the Fed said.

We are excited about this recent change in direction from the Fed to stimulate the housing market. Attend a Home Buyer’s Class to learn more

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I have been out showing homes under the $100,000 mark in both St. Paul and Minneapolis. Wow there are really alot to look at. I would guess that for every 10 homes that are junk we find a pretty decent one. I showed a nice ramber in Minneapolis this weekend end that was priced under $80K that was move in clean with a large garage and additional parking. This is really a buyer’s dream for the first time buyer and startup investors. I have had similiar luck with some areas in Anoka County also. If you even think you may want to own a home start checking out your financing options now. The clean good ones go quickly and don’t wait for you to be ready.

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Zero down financing could soon be a thing of the past. First time home buyers bought homes for many years before zero down was invented believe it or not, here are some ideas for rounding up some cash for closing. ·         GRANTS, we are seeing more grant type funding options coming available all the time.  Many funds are based on property location, most have income and sales price limits. To see what might work for you, give us a call.  ·         GIFT FUNDS, many programs allow the down payment and/or closing costs to come from a gift, normally from a relative, but other sources can work too. ·         SECURED LOAN, if you own a car that is underfinanced, or have a 401K or other liquid assets and are allowed to borrow against it, borrowing the down payment can work. ·         SELLER CONCESSIONS, asking the seller to pay closing costs is pretty normal these days.  

When you go out on showings dress warm. I swear that vacant homes are actually colder than standing outside. I want to Cabellas last week and bought my long underware - my husband laughed at me. Also as the evenings are dark so early remember to bring a flash light with. I carry 2-3 flash lights with me but everyone usually really wants their own.

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