Minnesota Landlord | MN landlord
May 2016

7 Out of 50 Could Save Money

May 29, 2016 by · Leave a Comment 

It is estimated that seven million out of 50 million homeowners could save money by refinancing their existing mortgages. Obviously, if the replacement mortgage has a lower rate than your existing one, you will save money.

If you bought a home before 2011 and are paying mortgage insurance, you should investigate refinancing to eliminate that requirement. Even if you don’t get a lower interest rate, the savings could amount to hundreds of dollars a month.

If a home you purchased since 2011 has appreciated enough, it could easily justify refinancing to eliminate the required mortgage insurance. Most loans don’t require mortgage insurance if the loan-to-value is 80% or less. There are some programs for 90% mortgages that don’t require mortgage insurance. It is certainly worth investigating with a trusted mortgage professional.

Continuing to pay mortgage insurance that could be eliminated is like having a broken cell phone and continuing to make the monthly payments for something you can’t use and don’t need.

If your current mortgage is several years old, instead of getting a new 30 year mortgage, you might consider a 15-year term. The money you save with a lower interest rate could help you to retire your loan in a shorter time so that your home would be paid for.



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Matching Downpayment Assistance Grants Available through NeighborhoodLIFT®

May 26, 2016 by · Leave a Comment 

Huge opportunity!! If you are contemplating purchasing a home, now may be one of the best times. The Neighborhood lift program is kicking off on June 10/11 2016 It will be held downtown Minneapolis at the convention center and you need to make a reservation to meet with a loan officer to review the program and get qualified. Contact me and I’ll tell you about this amazing program sponsored by Wells Fargo. They are giving away grants to qualified prospective homeowners. It can be stacked with other programs like MHFA or local community or foundations. Time is of the essence. When the money is gone, it’s gone.



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HARP Guideline Updates- a useful link

May 14, 2016 by · Leave a Comment 

Are you underwater on a loan and want to look at the possibilities of a refinance? Check out this link I found on the new HARP guidelines- HARP Loan Program : Eligibility & Guidelines for 2016

http://themortgagereports.com/259/harp-making-home-affordable-guidelines . Maybe refinancing is an option. Are you considering selling and would like to know the currently value of your home, let me know and I will generate an automated report.



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You may never stop paying for some improvements

May 12, 2016 by · Leave a Comment 

You’ve saved the money and are ready to pay cash to build a new pool for your home. However, that’s just the beginning of your soon to be increased expenses which will include maintenance, higher utilities and higher taxes.

Homeowners obviously benefit by a larger equity when their home increases in value due to appreciation. A not-so-obvious effect that will also more than likely take place is that their property taxes will increase. In most cases, a property’s assessed value is generally tied to market value to calculate the property taxes based on the tax rate for that year.

Similarly, a homeowner can affect the value of their home by making capital improvements. Some small items may never be recognized by the taxing authority but items that require a permit, certainly are brought to their attention. Items such as a fence, roof, remodeling, windows, new rooms or swimming pools can easily increase the assessed value of a property.

Most states have an established time frame in which to challenge the current tax assessment for that year. The process is relatively simple and doesn’t require professional representation. It generally involves showing that there is an error which has overstated the value or that current comparable sales indicate a lower value.

If you’d like more information or need the comparable sales data, please let us know. We would be happy to help you investigate the possibility of lowering your property taxes.



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Your Home May be Worth a lot More Than You Think

May 11, 2016 by · Leave a Comment 

Real estate lost a lot of value during the recession but most areas have rebounded considerably. In some cases, the homes are worth more than they were before the housing bubble burst.

The dynamics are classic for this type of market: inventories are low, mortgage rates are low and demand is high. All price ranges are on the rise with some at an even higher rate because the short supply is causing competition among buyers.

Another reason many homeowners’ may have more equity is simply not staying current with what is going on in the market. In a recent FNMA study, it indicates that 23% of owners believe they have negative equity in their home when actually, it is 9%. 37% believe they have greater than 20% equity in their home when actually 69% of homeowners do.

Even if you’re not planning to sell your home, knowing the value helps you understand your financial position better. Home equity debt up to a $100,000 limit is tax deductible and can be used for any purpose. Owner’s commonly refinance to eliminate mortgage insurance, consolidate mortgages, pay off higher interest rate debt like credit cards or student loans or to buy out an ex-spouse’s equity.

Be aware that an automated value model like Zillow Zestimates uses algorithms to determine a price and while it might be in the ballpark, AVM results may only be accurate about 20% of the time. A comparable marketing analysis or broker’s price opinion will be more accurate due the subjective approach that will be used by an agent with personal experience in the area. An agent will consider factors like condition, floorplan, marketability and demand.



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Temporary Buy Down

May 1, 2016 by · Leave a Comment 

There is an infrequently-used mortgage program available that could be the solution to a buyer’s or seller’s problem.

Temporary Buy Down

A temporary buydown is fixed rate mortgage that the seller has prepaid interest at closing to lower the payments for a number of years. The borrower must qualify at the note rate but gets the benefit of lower payments for the early years.

A 2/1 is a common buydown that the first year’s payment is calculated at 2% lower than the note rate and the second year’s payment is calculated at 1% lower than the note rate. The third through thirtieth years’ payments are the note rate.

Let’s set the scene. A buyer is using their available cash for down payment and closing costs to get into the home. They’d like to put their own touches on the home when they move in but may not be able to for a year or two since most of their cash was used.

In this example, a $250,000 home is purchased with a 3.5% down payment and a 4% mortgage for 30-years. Normally, the principal and interest payment would be $1,151.76 for the full 30-year term. If the seller will pay the lender $4,736 at closing, it can be applied to pre-pay part of the interest for the first two years.

Temporary Buy Down

The first year, the buyer’s P&I payment will be $891.71 for 12 months based on a 2% interest rate or 2% lower than the 4% note rate. It is $260.06 lower per month in the first year. The second year, the buyer’s P&I payment will be $1,017.12 for the next 12 months based on a 3% interest rate or 1% lower than the 4% note rate. It is $134.64 lower per month in the second year.

A bonus for the buyer will be that the cost of the buydown paid at closing by the seller becomes prepaid interest that is deductible by the buyer in the year of purchase. The buyer gets lower than normal payments for the first two years and a sizable tax deduction.

This type of program can be very beneficial to a seller who wants to offer terms to improve the marketability of their home rather than lower the price. The challenge will be explaining it to not only potential buyers but even agents who are not familiar with this program.



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Disclaimer: This communication is provided to you for informational purposes only and should not be relied upon by you. RE/MAX Results is not a mortgage lender and so you should contact a mortgage broker or lender directly to learn more about its mortgage products and your eligibility for such products. Regarding specific blog postings, external links and any other information found on this site, neither John Mazzara nor RE/MAX Results assumes any responsibility nor guarantees the accuracy of this information and is not engaged in the practice of law nor gives legal advice. It is strongly recommended that you seek appropriate professional counsel regarding your rights as a homeowner. John Mazzara and RE/MAX Results are not associated with the government, and our service is not approved by the government or your existing lender. Even if you accept this offer and use this site and/or our services, your lender may not agree to change your loan should you decide to pursue a short sale or any other change involving your loan or loan terms and conditions. If you should decide to engage our services in marketing your home as a short sale, there will be no up front cost to you and you may cancel our listing contract at any time. · Each Office Independently Owned and Operated

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