Rates are currently at historic lows, and so are house prices!  The picture to the left is an example of a three bedroom home in St. Paul that could be bought for far less than rent.

Let’s analyze how mortgage financing and payments are calculated.  First of all, to find a foreclosed home for sale in St. Paul (say near the Maplewood border) that is in livable condition for around $120,000 is completely possible – and actually quite common.  Livable condition means no immediate safety hazards – could possibly use a fresh paint job or some carpet cleaning, but nothing more than that.

If you figure out a payment based on a 5% mortgage for a home purchased at $120K, the payment for principal and interest comes out to about $640.  Consider that property tax and homeowners insurance are also built into your payment; so let’s estimate your property tax at $1,500 per year – or $125 per month, and your homeowners insurance at about $700 per year – or about $58 per month.  Add those together and you have a payment of about $830 per month.  Considering that very house could rent out for somewhere between $1,150 and $1,250 per month – that’s a potential savings of $420 per month!

Mortgage companies look at several factors when qualifying purchasers, one of which is called a “Debt-to-Income Ratio.”  The Debt-to-Income Ratio is calculated by dividing the total amount of loan payments (car, home, student loans, credit cards) by the purchasers gross income (before taxes). Depending on the program and the borrowers credit, an acceptable ratio might be 45%.  That means that if a buyer didn’t have an auto loan, or any other debt, they could qualify for a $120,000 home with an income of about $1,850 per month before taxes.  That equates to a full time job with pay around $10.65 per hour.

Combine that with down payment assistance for first time homebuyers, and it makes the situation even better!

Contact me today to learn more.

Lately, I’ve come across a lot of people that are upside down on their homes but are looking to move.  They have great credit, and money in the bank.  Not necessarily enough to pay off the upside down portion of their current home and still have enough to make a down payment on a new home though.

My suggestion has been to think outside the box.  Myself and many of my clients have been investing in property – either to get residual rental income, or to make some cash on a quick flip.  Today let’s focus on the latter.  Most of the houses my investors and I have invested in have needed a fair amount of rehab work.  The amount of work needed versus the return however, is drastic.  For example, one of my investors bought a house in the Dayton’s Bluff area of St. Paul for about $20K, invested about $25K in rehab expenses (using a professional contractor) and turned around to sell it for $100K.  That’s a cool $50K gain for three months of work.

The perception is that you need a ton of money to do something like this.  The reality is that you need 25% down of the full project cost – in this case the project was roughly $50K so the down payment was $12,500.  Many banks will borrow you the  down payment money as an unsecured loan…  So essentially you can do it with no money down.

So now, the person that called me and is upside down – who had $15K in the bank – now has $65,000 in the bank! (Gain plus initial down payment that is paid back).  That person may have been upside down $20K on their house initially… Now they have enough to pay off their deficiency and sell their house, they have a healthy down payment, and they have some extra money in the bank for a rainy day.  Or to invest again

Call me today to talk about options!

Most first-time homebuyers that qualify for down payment assistance will utilize the MHFA CASA program which provides qualified buyers with down payment assistance of $3,000.  This program is available for homes anywhere in the 13-country metro area.  You must use an MHFA loan in conjunction with this program – according to the MHFA, their current 30 year rate is 4.5%!

There is another program with stricter guidelines called the Home-Help Fund – which provides additional down payment assistance on top of the CASA funds.  More on that later!

Contact me to apply now!

I am very active in the Twin Cities and am confident that I can find the perfect home for you. Regardless of how a seller is selling, whether it is privately, through my brokerage, or with another company, I have access to all of these homes. Instead of spending your spare time circling ads, let me do the work – we will decide together which homes to see and when you find the perfect one, I’ll negotiate the best agreement for you. Remember to ask me about my six-step buying process.

Did you know that most of the time, buyer representation is free?  That’s right, the seller’s broker pays the buyer’s agent.  Did you also know that whether you use your own agent or not, the seller typically pays the same commission? That’s right, instead of paying a portion of the commission with the buyer’s agent, the seller pays the whole amount to their listing agent.

Having an experienced professional working for you will give you an advantage. With my real estate experience and knowledge of real estate practice, you can be confident that you will be positioned at the forefront of the sophisticated real estate industry. I have relationships with many lenders as well, so if you choose, I can help you shop for the best home mortgage option for you. Contact me now to take control of your next home purchase.

I listen carefully to understand your goals and guide you through the entire process of selling your home from listing to sale and beyond.

Selling your home in today’s competitive Real Estate market requires effective marketing strategies and the resources to implement them. I offer an aggressive marketing plan to assure your property maximum exposure with full-color property brochures, effective advertising, Open Houses, a large referral network, listings on the most widely-visited real estate websites on the Internet, virtual tours, and more. I will identify low-cost home improvement opportunities that may add value to your home, as well as give you showing tips to make your home more appealing to potential buyers.

Contact me today for a free, no obligation, in home consultation.

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