We have all been there and been frustrated with this situation. What we recommend is before you finally purchase your dream home, shop around diligently for a lender that you will connect well with.

It is ok to get different quotes from different lenders, just be careful as to how many lenders you apply with. Each lender that you give your loan application to will pull your credit to see what your score is and how much you qualify for. You do not want too many lenders pulling your credit as it could lower your credit score.

What most people don’t know is that there are down payment assistance programs for every part of Minnesota. Most lenders are able to get you pre-approved for every type of assistance you may qualify for, but there are many lenders that are unable to offer any programs that may benefit a first time home buyer.

Do you qualify for these programs? Which programs do you qualify for?

There are a many factors that lenders look at to see if you qualify for down payment assistance. Some of these factors are income, minimum credit score, and whether or not you have owned a home within the last 3 years. It is impossible to see what you qualify for without these factors availabe for a lender review.

If you want to see exactly which programs are available and which ones you may qualify for, please call or e-mail us today and we can get you set up with a free consultation with one of our mortgage bankers.

A USDA guaranteed Loan is government-insured 100% purchase loan. These loans are only offered in non-urban areas and serviced by direct lenders that meet federal guidelines.

USDA Loans – They’re NOT for Farmers!

A USDA home loan has nothing to do with agriculture. USDA Loans used to be considered “farmers loans” but that is simply not the case anymore. Just about anyone looking to purchase a home outside a major metropolitan area can qualify for a USDA Loan.

Some of the eligibility standards that determine if you qualify for a USDA loan for your home include what county and zip code the home resides in, your current income and credit history, as well as the number of dependents you can claim. Because these guidelines are very specific, Waterstone Mortgage can help you to determine your eligibility.

It’s simply a government insured loan program directed to families in qualifying rural areas of the U.S. – which generally include:

Communities outside of city limits
Communities with less than 20,000 people
You may be surprised to learn just how many areas of the United States qualify for these no money down, no mortgage insurance home loans.
The goal of the USDA loan program is to help our nation’s smaller, rural communities thrive by making land and property more affordable.

USDA Loan is the only loan program offered to the general that allows you to finance 100% of your home’s value. That means no down payment of any kind.
In addition, there is no monthly mortgage insurance payment with a USDA guarantee loan, which means more money can go to paying off the mortgage each month. USDA loans are made even more affordable through very competitive fixed interest rates, ensuring your payments will not increase every month.

NO down payment – Finance 100% of your home
NO monthly mortgage insurance
NO maximum loan amount
NO assets needed to qualify
Flexible credit guidelines
Competitive, fixed interest rates so payments do not increase
USDA Loans are for new and existing properties

Call us today to see if you qualify for USDA financing.

FHA loan programs are designed primarily for first-time home buyers and others with moderate incomes that have not yet been able to save the cash needed for down payment amounts. A program insurance charge is rolled into the monthly payment amount to support this program and typically ends as the loan is paid down over time. A variety of loans are offered through FHA programs, including fixed rate and adjustable rate mortgages for single-family homes, multi-family homes, condominiums and other home types.

• Low down payments programs
• Seller can pay your closing costs
• 100% of down payment can be gifts from relatives
• Ability to finance home rehabilitation and energy efficiency
  improvements
• No prepayment penalties
• Refinance programs with streamlined documentation

Your credit score needs to be a minimum of 640 in order to qualify.  If you have had a previous Bankruptcy, the discharge must be at least 2 years.  A Prior Foreclosure or Short Sale needs to be at 3 years ago.

Employment History:

We look at your previous 2 years of employment to be sure it’s in the same line of work.  If you are self-employed, we need a 2 year history of owning the business and showing income on your tax returns. 

Down Payment:

You can purchase a home with as little as 3.5% down of your purchase price on a Government Insured FHA loan. This money can come as a gift from a relative as well.

Give us a call to review your unique situation.

• Ask your bank or credit union about a secured credit card. You can make a deposit to your account and have a credit limit in the amount of your deposit. The bank takes little risk and you build credit slowly.
• Use a co-signer on your first few credit accounts. Lenders will consider the co-signer’s existing credit. The co-signer essentially ‘vouches’ for you while you build credit. Note that this is a big responsibility – you can cause major headaches for the co-signer if you don’t pay as agreed.
• Use retailer programs for modestly large purchases like furniture. For example, you may buy a television on the “$40/Month Payment Plan”. Gas station cards may work as well. These programs can be easier to qualify for and they certainly help you build credit. Be sure that the retailer will report your loan to the major credit reporting companies.
• Get a credit card with any reputable institution that will give you one. Again, you have to make sure they’ll report your timely payments to the credit reporting companies. Of course, you have to always pay at least the minimum before the due date.

Risks of Building Credit 

Remember that credit can be a useful tool, but it can also get you in trouble. After you build credit, you may be inundated with offers. Banks, credit card companies, and others will want to loan you money because they’ll know you’re a good borrower. Don’t take them up on every offer — only borrow money when it truly benefits you.

Give us a call to be sure you are on the Path to Buy.

First, look at your monthly gross income, before taxes and contributions. This is how much you make per month, not how much you take home. What you take home is net income.
• Front-End Ratios
Lenders use what is called a front-end ratio, which is reflected as a percentage of your gross monthly income. The front-end ratio signifies the payment a buyer can reasonably afford, from a lender’s point of view. You may prefer a lower payment.
The front-end ratio for a FHA loan is 31%. For a conforming conventional loan, the front-end ratio is 33%. This means if your monthly gross income is $4,000, to qualify for the maximum FHA loan, your monthly principal, interest, taxes and insurance (PITI) payment can not exceed $1,240. For a conventional loan, it is $1,320.

Back-End Ratios

The back-end ratio reflects your new mortgage payment, plus all recurring debt. It, too, is computed on your gross monthly income. The back-end is higher than the front-end. For an FHA loan, the back-end ratio is 43%. For a conforming conventional loan, it is 45%
This means if your car payment is $300, and you pay $100 a month between two credit cards, your total monthly recurring debt is $400. On the FHA loan payment above of $1,240 PITI, plus $400 recurring debt, your total is $1,640. The back-end ratio number is $1,720 ($4,000 x 43% = $1,720). Your total debt is less than $1,720, so you qualify.
For a conventional loan, $4,000 x 45% (back-end ratio), equals $1,800. The total debt of $400, plus your new mortgage payment of $1,320 for a conventional loan equals $1,720. Your total debt is less than $1,800, so you would qualify for a conventional loan.

Call me today to calculate your debt to income ratios and determine how much home you can afford!

HUD homes are sold as is, so if there are any repairs needed, it is at your expense.  The repairs can not be financed into the loan, so the funds will need to be out of your pocket at closing.

To view HUD homes go to http://www.hudhomestore.com/Home/Index.aspx, if you find a home you are interested in, tell a participating real estate agent that you want to place a bid and they can submit your offer for you.  An agent must submit your offer. You should hear back within 48 hours if your bid won.

Contact me today to get pre-approved prior to making an offer to see how much house you can afford.

The rate is usually lower than market rates and offer down payment assistance up to $4500.  The minimum credit score is currently 620.

The chart below shows the income limits for the Minnesota Housing Finance Program. 

Call today to see if a First Time Homebuyer Program fits your needs!

FHA loans waiting period is 3 years after a Foreclosure.  You only need 3.5% down payment and a 640 credit score to qualify.

Call me today to discuss your unique situation and we can put you on the path to homeownership!