Get Your Loan Pre-approved And Pre-qualified With These Simple Steps

One of the most important steps to home buying involves getting the right loan amount for your ideal  MN property. There are several ways you can get prequalified to purchase a home and preapproved for a home loan, and it's generally a good idea to check your credit report before approaching this step. A prospective lender will be reviewing your credit report and other financial details in great detail as you set the prequalification or preapproval process in motion, and you can obtain a free credit report from any of the three major credit bureaus to check it for errors.

Have your credit records immediately cleared if you notice any discrepancies in it and ensure that you keep intact all proof of communication with the credit institution. When all these have been settled, it's now easier to proceed with your homebuying experience; the following tips are important in the prequalification and preapproval of your loan:

1. Do a research on various mortgage program via the Internet. There are many online resources where you can actually see the lists of current interest rates for various loan packages such as LendingTree.com and Bankrate.com. An initial step would be to look at some options or better yet, submit your personal information for sample or preliminary review. In just a few days, a loan representative may communicate with you and guide you along the way.

2. Approach your area bank. Most people turn to a mortgage loan officer at their bank to obtain a prequalification letter or preapproval status in person. Ilyce Glink, author of '100 Questions Every First Time Home Buyer Should Ask' explains that this process can actually take longer than the online process. However, some people prefer the face-to-face communication and will be more comfortable going to the bank in order to get things started. However, you will be receiving the same type of service either way.

3. Dial the telephone. Another option you may try is transact your loan prequalification over the telephone, instead of online or bank methods. Some lenders offer this kind of service and all you have to do is ask the local bank for the number so you can give or submit your personal details through the phone.

4. Try a national lender. National lending companies such as Countrywide home loans and Bank of America also offer online services and over-the-phone prequalification and preapprovals, giving you more options for your future loan. Visit these lending companies' websites to learn more about current rates and send in your information to become prequalified for your loan.

5. Use an aggregator website. This is helpful especially when you need a website that has rates and services from different lending institutions yet requires you to send your info only once, or if you experience difficulty choosing between banks and financial institutions. You have the freedom to select from a number of packages once you have sent in your personal details.

Ultimately, homebuyers need to get prequalified and preapproved for a home loan first before the actual process is done. The abovementioned resources are helpful tools in finding the best deal for your mortgage and getting started.

About the Author: Alexandria P. Anderson is a Lake Minnetonka real estate agent that helps people to find and purchase Lake Minnetonka homes and properties for sale in the Twin Cities of Minnesota.

Things To Know About Working With A Seller's Agent

Buying a MN home for the first time involves collaborating with a seller's agent or subagent. It is crucial that you understand how things will work between you and the subagent because these people act as representatives to the seller and are therefore expected to bring you to the deal. As a seller's agent, they are entitled to a commission and have certain duties and obligations.

Regulations vary from state to state, but there are certain things they cannot do according to national law. The author of '100 Questions Every Home Buyer Should Ask' encourages all buyers to review the agent's forms and disclosures thoroughly to understand exactly what types of services they will be offering; if you do not understand anything, do not sign the form. It's also important to understand the key things that a seller's agent can and cannot do for you:

The seller's agent cannot disclose the list of comparable home's prices in the area. Often referred to as 'comps', a compilation of similar homes in the area will be given to you. Comps usually consist of listing information and list prices. This is necessary to ensure that an unreasonable price is avoided once negotiation takes place.

The seller's agent cannot tell you which home to choose when you are still deciding. Even though it's the seller's agent's job to sell you the home they are commissioned to sell, they do not have a right to 'push' their home over another in question. If you like two homes and the broker is working with both sellers, they cannot persuade you to purchase one over the other; the decision is ultimately yours to make.

The seller's agent cannot discuss the home's defects or flaws. In purchasing a property, the seller broker has no right to mention anything that would have a bearing on your choice or decision. Any material flaws or defects can be discussed but you will still need to find out for yourself if the property is really the best option.

The best offer for the home cannot be hashed out in detail. Most first time homebuyers would normally ask for the actual price to be paid in getting the property. However, this information cannot be legally offered since the seller broker has duties to the seller and any such act can affect the partnership.

The seller's agent can ask you for referrals. Many seller's agents are independent business owners and always looking for new clients. They do have the right to ask you to refer them to friends or family members, and will do everything they can to make your home buying experience a good one.

When you are working with a seller's agent as a first time home buyer, it's important to remember that they are in the business to make the home buying process as easy as possible. This doesn't always mean that they have your best interests in mind, so it's important to do your own research about the property and work with a professional real estate agent in addition to the seller's agent.

About the Author: Alexandria P. Anderson is a St. Louis Park real estate agent that helps people to find and purchase St. Louis Park Homes and properties in the Twin Cities of Minnesota.

Protect Your Money With Real Estate

Do you have jitters about putting your money towards MN real estate? After-all, the media LOVES to talk about what tumultuous times we're in right now. Home prices falling! Buyers beware! Protect yourself!

Never believe anyone that tells you an investment is 100% safe and smart. EVERYTHING that you do with your money has a certain amount of risk involved with it, even if it's just putting bills under your mattress; speaking of which, let's talk about what happens if you do NOTHING with the money you save (e.g., putting it under your mattress). That wouldn't be very smart--fire, flood, theft, etc. could make your money disappear very quickly with no hope for return.

What if you are the type who'd rather keep your hard-earned money in a safety deposit bank? Well, consider the fact that inflation reduces your money's buying power. More concretely, this means that your bills are only worth the currency's present value. Over time, you will find out that you have wasted an opportunity to expand its value.

In the US, the annual rate of inflation is about 3 percent that translates to commodities increasing by almost 3 percent every year. In other words, your money is worth 3 percent less if it is being kept inside a safety box. Would you still perceive of it as "saving" when obviously your money's purchasing power is gradually vanishing?

Let us also look into savings account. Those with this mode of saving are lucky because the FDIC or the Federal Deposit Insurance Corporation protects them. The risk involved is minimal as far as losing money is concerned. However, there is such a thing called inflation that even the best savings account in the world will have a hard time counteracting. Inflation can also negatively affect your savings account interest earnings.

How about stocks? I like to think of investing in stocks as investing in an "idea". You don't hold claim to any tangible item. You only "own" the fact that you have contributed funds to the "idea" that the entity you contributed your money to will somehow add value to itself and subsequently add a gain to the money you started out with.

How much control do you have over this "idea"? ALMOST NONE! The only thing you can do is research the track record of the entity and the people close to it (e.g., the CEO, CFO, etc.) to guess whether or not the "idea" will work out in the way you hope it will, but it's very difficult to know ALL the factors that will come into play. My opinion is that unless you invest in the stock market as a profession or spend a great deal of your time researching companies, investing in stocks is very distant from your personal interests and can be of great risk. That is why I, and many others, have chosen the last option we'll talk about: real estate.

What primarily distinguishes real estate from the ones mentioned above is its being "tangible" (this presupposes that you can experience it with all your senses: you can see it, touch it, and even improve it.) Likewise, the risk involved as far as losing the physical asset is concerned seemed distant. If it does, there's a wonderful thing called insurance! Can you apply the same in the case of stocks? Your property's value also grows with inflation unlike paper currency so you do not have to worry about your investment losing its purchasing power every year.

The bottom line: real estate gives you surprising benefits in numerous ways that includes huge tax breaks, gained equity through renter-paid deduction, equity gained through improvements, and appreciation. As I have mentioned previously in this article, any investment is not 100 percent safe. But it is in real estate where I am sure that with some forethought, you will find the most satisfaction, security, and enjoyment with your money!

First Home Buyers' Guide To Choosing The Right Mortgage

Selecting the right mortgage package as a Minnesota first time home buyer can be a confusing process, and working with a mortgage loan officer isn't always the best way to get the mortgage loan that you can afford. One of the biggest mistakes that first time is to sign on the loan that they qualify for, instead of taking a smaller loan that they can actually afford.

How does this happen? Loan officers will qualify you for a loan based on your income ratio and not necessarily how much you're prepaid to pay in housing payments each month. If you borrow the entire loan amount that you "qualify" for, it's likely that your monthly payment will be pushing your monthly budget to the max.

Setting your own limits for the loan will help you resist the temptation to just borrow up to the limit that your loan officers offer s and help you stay within a comfortable housing expense range based on your income level. Here are some more tips for selecting the mortgage for your new home purchase:

1. Consider the tax benefits. Some mortgages are 'interest only' loans which means you can deduct the entire payment on your taxes for that year. However, loans that are designed with a negative amortization scale won't allow you to deduct interest from your monthly payment.

2. Evaluate the long-term advantages. Whether you're planning to live in your home for 30 years and more or not, it is still advisable to know the pros and cons of your mortgage package. A fixed interest rate loan is somewhat higher in amount but unlike ARM and other loan products, it can safeguard you from changing market conditions. But a fixed interest loan also has its limitations. Smart Consumer's Guide to Home Buying's author, Barron, proposes that the fixed interest rate may increase your payments because of the demands of the escrow account linked with it.

3. Inquire about flexible payment options. Some home mortgage loans allow you to make extra payments towards the principal balance without paying a penalty, which means you can start paying down your mortgage when you have extra funds at your disposal. Find out if your loan products offer this type of flexibility so you can start paying down and be free of debt sooner than later.

4. Look for ways to keep payments low. Even when the lender offers you a large loan, consider cutting back on the loan amount so that you can keep the payments within an affordable range. A low interest rate, long loan term, and the ability to make interest-only payments are a few ways to keep payments as low as possible and within your budget range.

5. Apply for mortgage insurance. Most first time home buyers do not have a lot of money available for the down payment, which can make a big difference to the loan amount and monthly payments. Mortgage insurance can provide for your down payment, or in some cases, allow you to apply for an attractive loan product without having to make any type of down payment.

Cashflow Versus Appreciation

You want to invest in Minnesota real estate. What's the best way to use your money? The use of leverage and OPM (other people's money) is what makes real estate such a powerful investment tool. Different people have distinct viewpoints regarding how much leverage and OPM is good.

First of all, always make a qualified mortgage professional part of your team of experts; the examples that follow may not be appropriate or even possible for your particular situation. Some people have the goal of receiving cashflow every month to supplement their incomes while others want long-term financial success through investment appreciation.

To vitalize your financial goal, look closely into your options. What's amazing in the real estate market is the assurance that you are in control. For instance, you have $20,000 to start with. With this amount, you can have either a 10 percent down payment on a $20,000 worth of property or a 20 percent down payment on a $10,000 property. Of course, you will be the one to decide which is better.

There is no right or wrong answer; again, it depends on your goals, but let's look at the differences. Whenever you make a large down payment it is more likely that you will be able to get cashflow because your mortgage payments will be lower and at the 20% mark you do not need mortgage insurance. So if cashflow is what you desire, larger down payments help you achieve that.

Assuming that for the $100,000 and $200,000 properties, the appreciation is set at 6 percent (Please note that the appreciation rate actually varies depending on their locations, type of property, etc..but for this article, you can well disregard these differences). That translates to these figures: the $100,000 will be worth $106,000 after a year of appreciation and the $200,000 becomes $212,000.

You will have made double the amount of appreciation with the 10% down payment on $200K option, but you didn't have to spend one penny more! This effect will compound year after year and after awhile the difference will staggering.

Greater appreciation values mean a shorter time until you have enough to pull out some equity and use it to buy ANOTHER property and then have two properties working for you, again compounding the effects of appreciation. What are you sacrificing? Since you paid a lower percentage down payment, the cashflow might not be there on the $200K home, and maybe there are even months where you have to pay some maintenance expenses out of pocket, but look at the long term gain advantages.

Moreover, you get more advantage since debt payments and maintenance costs are tax deductions (using leverage or OPM and getting less monthly cashflow) unlike cashflow that is taxable. In the case of some people who needed monthly cashflow - the solution is simple, your approach can be modified to get what you really wanted. Besides, most people would agree that extra payment every month realizes wealth building benefits in the future!

Your choice to effectively use your money is important. Start now by building your team of experts and hit your mark!

In Today's Economy Is It Better To Rent Or Buy A Home?

Again we find ourselves facing another financial dilemma: should I rent or should I buy? And just like many other financial quandaries, we have seen the example of our parents and perhaps friends but have little true professional knowledge to base our decisions on. We get a lot of advice from those around us, which is VERY tempting to listen to, but should we? For me the answer is "Don't ask a butcher how to bake a loaf of bread!" It's a good idea to listen to everyone you meet in your life, but it's an even better idea to consider who is giving the advice when you're faced with a decision.

A good adviser takes into account several factors to help you come up with sound financial decision. One, he must consider your individual situation; and two, he must be experienced enough to back his claims with solid evidence. Since no two people have exactly the same predicament and your case is unique from the others - it is crucial to weigh the costs and benefits of buying versus renting. As the co - author of the book Equity Happens (Russell Gray) puts it, "Do the math!"

With that being said, I'm not going to try and tell you which option to choose. I cannot possibly do that because I don't know your particular situation. I will tell you some numbers to think about and I will say that for many people, right now is an amazing time to purchase a home. You can start with monthly expenses. In the case of renting, add up your rent plus any additional fees and the utilities you must pay.

For ownership expenses it's a little trickier. You must add together more items and might need the help of professionals to determine what the expenses will be. The main expenses are commonly abbreviated with the acronym PITI. This stands for Principal (the amount of money you pay toward the principal of your loan), Interest (the amount you pay toward the interest of the loan), Taxes (property taxes you must pay), and Insurance (both property insurance and mortgage insurance, if applicable).

Owning a home also covers utility expenses plus other maintenance outlay aside from the PITI. In the case of renting, while it is compelling that you only pay the same amount on a monthly basis; you can go back and determine what your previous payments could buy you a home for. Monthly monetary costs are important aspects in deciding what to choose between owning and renting but it is also equally significant to look at the long-term benefits.

The majority of these long-term benefits often lie on the side of ownership. After many years of renting you will still have title to nothing and you will continually be paying higher rents. After owning for many years your payments will remain basically the same as when you first purchased the home (except some costs like utilities, insurance, etc. that rise with inflation, your main costs will not change). And, what's even better, you will have the wonderful thing called equity from all the payments you've made towards owning the home. If you choose wisely in an appreciating market (not hard to do!) you will also gain the value of appreciation of your home....it's like free equity!

There is a good chance your choice shifts according to your personal feelings and opinion. Simply put, making the best decision towards renting or owning a home involves your subjective feeling. What can be more fun than having a house you can call your own, and enjoying the independence in creating changes with it however you like it! On one hand, you might favor the side of renting if you will give emphasis on other concerns such as having no lawn to mow, or other maintenance issues.

Often, financial consideration plays a big role but also brings into mind subjective feelings over the argument: to buy or to rent a house? To be more specific, purchasing expensive appliances no longer bothers you when you have huge savings from renting instead of owning. Or maybe, the freedom to do whatever you want with your own house appears inconsequential if you will note the massive expenses you shed off just to purchase your home. Either way, the dictum "numbers do not lie" proves that the former is still weightier than the other.

Concisely, this article wants to present two major points: always consult a professional in weighing out your options and calculating your expenses; and look beyond the immediate gains of ownership or renting. The benefits from both sides will not be evident unless we set our eyes on the long range that will not be apparent on a monthly cost comparison. In a buyers market that we are in, ownership is favored over renting.

Alexandria P. Anderson is a licensed Minnesota Realtor that helps people to find and purchase Plymouth Townhomes as well as Plymouth Lofts in the Twin Cities of Minnesota.

The Easy Path To Property Investing Success

Many people think that real estate investment is beyond them. It has such a mysterious sound. Surely, successful Minnesota real estate investors like Donald Trump were born with a tip sheet in their hand and prospects in the back pocket of their baby jumpers. But the fact is, even those who were born into families of real estate moguls had to start from scratch to learn the family business. They just got an early start.

You can start now.

Willingness to learn is the other key to success when it comes to real estate investing. In truth, it's just like any other specialized task you must become familiar with in order to perform well at, but that anybody who is ready to devote time and mental energy can become proficient at. A good example is that of piloting an airplane; the process seems complex, but as long as your eyesight is decent and you don't have an insurmountable fear of heights, you could learn to pilot an aircraft, and, given time, you could probably develop the skills necessary to work for a commercial airline.

Just like all the flashing lights and mysterious devices in an airplane's cockpit seem absolutely mystifying to the beginner, most have absolutely no idea where to start when it comes to learning the real estate business. Just like a pilot, a prospective property investor must start out by sitting down at the metaphorical cockpit and become familiar with what each little switch and lever does.

If you start investing in properties, and do it wisely (by learning as you go and by getting advice from the experts) you will soon find yourself making a little bit of money at it. Then you will find yourself making more money at it. Eventually you will make a lot of money from it and wonder when exactly you stopped being a novice and started being an expert. It is a gradual process, like anything else.

The Rich Dad, Poor Dad books by Robert Kiyosaki are a great starting point for those who want to learn more about just how easy it can be to break into the business of investing. In addition, 'The ABCs of Real Estate Investing,' by Ken McElroy do a great job of laying the process out in a logical, easy-to-understand manner.

At the end of the day, becoming a successful real estate investor is only difficult if you're unwilling to try, or if you insist on throwing your money at wild guesses (that's gambling, not investing). The one critical fact that you must remember about investing is that in order to succeed, you must constantly be learning; if one becomes complacent, or acts as if he or she is a born investor, a rude awakening is sure to come.

After all, you wouldn't want to climb into the cockpit of an airplane, fire it up and hope for the best, would you? Of course not. That would be suicide. On the other hand, you would expect to become a good pilot if you went through a prescribed program and logged enough hours behind the wheel. Approach real estate investing in the same way and the sky's the limit.