Looking for a new home can be excited and stressful at the same time, to make the experience less daunting. We like to start with a meet and greet to simply listen to your needs & wants to better educate us on how we can best assist you with your home search.  Next, we will connect you with an experienced lender to help dial in the home loan best for your needs, an get you pre-approved.

What does it mean to be “pre-approved”? 

A mortgage pre-approval is a statement from a lender that says you are qualified to borrow up to a certain amount. Lenders take into consideration the same factors they would consider for a traditional mortgage approval, including your debt-to-income ratio and your credit score. The better your financial situation looks, the more you’ll be pre-approved to borrow. Ideally lenders would like to have a few days at minimum to gather your information and to consult with you regarding loan types, interest rates, payments, and closing costs. 

Why is this piece of paper so key?

Let’s start with saving time and possibly even saving money! When you know how much you can qualify to borrow it translates into how much you can spend, giving you a price range for shopping for a home.  As a result, you won't waste time (and endure unnecessary heartbreak) by shopping in the wrong price range. 

It Makes You a More Attractive Buyer to a seller, as the pre-approval letter is typically required in our area when submitting an offer on a property.  It lets the sellers know you are a serious buyer, as sellers are attracted to an offer with less risk of falling through.  Which in the event of a home inspection that results in requesting repairs or improvement, sellers are more comfortable spending money to address items needing to be repaired. 

Multiple Offers- We continue to experience multiple offer situation on desirable properties, having the Pre-Approval letter is a must and your lender will need a few days to gather and process information. Without the letter it is unlikely your bid would be on the top of the list for a seller.

The Pre-Approval letter lets you know whom you are working with and gives you a handle on the not only the monthly payment based on your offer but also closing costs expense that you can expect. It’s a great comfort to have an experience Realtor and lender to guide you through the home buying process and personalizing the service to meet your needs.  

There is so much to consider when you’re looking to purchase a new home, from location,  to need & wants, to end up with the best home for you and your family. When making one of the most important decisions in your life, we are here to get you off on the right path to homeownership. 

 Roxanne Johnson, Broker, ABR, CRS, GRI

When making an offer on a property Buyers may have contingencies that need to be considered when making a purchase. These contingencies are conditions that need to be addressed to not only meet lending requirements but also to give the Buyer a sense of safety nets while taking each step in the process of purchasing.

Here are the four common contingencies that every Buyer typically addresses when making an offer to purchase a home and what protection they provide to Buyers.

Home inspection contingency – This is a Buyers Continency and provides the opportunity for the Buyer to bring in a home inspector of their selection to provide an in depth look at the property overall condition including mechanicals, radon, moisture testing and more.

1. This is at the buyer’s expense, and a buyer’s contingency.
2. Has a stated time frame to perform all inspections and to accept, negotiate, or cancel.
3. If accepting or amending the purchase agreement by mutual agreement the buyer and seller will move forward with the purchase agreement.
4. IF the buyer elects to cancel within the stated time, earnest money is refunded to the buyer.
5. A home inspection does not provide or imply a home warranty by the seller or the home inspector for future condition. It is simply an inspection on that given day providing an overall property condition report.
6. The sellers may leave their home on the market for back up offers only subject to the first offer being cancelled and not miss marketing time.
7. Allowing the Buyers to inspect the property to their satisfaction also provides an additional record to the Sellers Property Disclosure as to the condition of the property.

Financing contingency -This is a Buyer Continency that states the purchase is subject to loan approval by the Buyers lender for the loan type and conditions stated in the purchase agreement.  This information is provided by the lender with a pre-approval letter and an estimate of monthly payments and cash needed to close, if any.

1. The Lender typically requires an application with information from the buyer regarding credit, employment, and current payments  and information regarding the property  such as an appraisal, clear title, and  plat drawing are typical.
2. A pre-approval letter should be provided to your realtor when writing an offer to purchase.
3. If the loan does not get approved, earnest money will be refunded to the buyer when specified in the purchase agreement.  

Appraisal contingency – An appraisal is typically required by the lender when financing the purchase of the property and is not typically wrote in as it is by default falls under the Financing Contingency. However, IF you have financial capabilities to purchase regardless of the appraisal you may want this clause added to your offer.  I recommend you talk to both your lender and realtor about the appraisal continency.

1. This is the Buyers expense as part of your lender fees
2. It provides the lender and buyer with confirmation the property’s value is supported   by the sale of other like kind properties
3. If the property does not appraise at value the Buyer has the option to pay the difference in value, negotiate with the seller for the lower value, or cancel the offer and receive a full refund of earnest money paid

Home sale contingency – This contingency gives the option for a Buyer to make an offer to purchase a home subject to their current home selling within a given time frame. This acts a safety net for the Buyer not to get caught owning two homes with two mortgage payments.

1. This contingency requires the buyer to list their home within a specified time frame.
2. There is also a time frame implied for a Buyer to sell their current home and perform by the date of closing on the purchase agreement.
3. This contingency will allow the Seller to continue to market their home and the option of accepting an offer as a backup offers and at any time may request you to remove the home sale contingency or cancel with in the specified time frame that is stated in your accepted offer.
4. IF you are unable to sell your home during  in the time period stated the  earnest money will be refunded to you and you will sign a Cancellation with the seller, which will allow the seller to move forward with the backup offer.
5. This contingency allows the seller to accept an offer and not miss marketing time.

Well & Septic Inspection Contingencies – This contingency is added to a purchase agreement when the seller is waiting on the inspections for their well and septic tests.   Most buyers are wanting to ensure the well water test meet the Minnesota Drinking Water standards and the septic complies with the County and State requirements for selling a property.   IF the well or septic do not meet the requirements the buyer and seller may come to a mutual agreement or cancel if they do not come to a mutual agreement.  

Home Purchase Contingency- This is a sellers contingency that may be used when a seller knows they need to find a home where they are moving to. There is not a specific form for this continency in the state of Minnesota but a clause maybe added to the purchase agreement much like the contingency to sell a home.  This provides the seller the opportunity to offer their home for sale subject to finding suitable housing of their choice within a time frame. When accepting an offer and moving forwards a seller must be mindful of the buyers’ contingencies in the offer. IF they do not find a home typically the earnest money paid by the buyer would be refunded to the buyer.

Other Contingencies – Other conditions may be a concern to a buyer that need to happen to make their move.  For example, subject to accepting a new position of employment, identifying property boundaries, property survey, shared well agreements, and easements are some of the additional conditions that maybe applicable.  These contingencies be added and personalized to your situation, keep in mind the contingencies should be reasonable to both parties, have a deadline, and outline what the buyer and seller can expect and who gets the earnest money if it doesn’t work out.

Contingencies offer a sort of “safety net”. Contingencies are conditions that need to be met to satisfy a concern by one or both parties.  We offer free consultation for buyer and sellers, if you are considering making a move, reach out and let us know what questions you may have specific to your situation.

Roxanne Johnson, Broker, ABR, CRS, GRI

Do you want or need to move but you are struggling with the prices in today’s market? We understand there may be a bit of sticker shock for some, especially if you are comparing to certain years in the past. The real estate market is ever changing.

If you have sticker shock, we want to remind you of the historically low interest rates. If you currently own a home, buying a move up home can still be within your budget because of the low rates. Before you fixate on the asking price, look at the monthly payment. How does the payment with the low interest rate compare to the payment you have now?

For example...

Give us a call today to schedule a free buyers consultation, virtually or in person!

Roxanne & Kelsey

RE/MAX Select Properties            

507-458-6110

roxannejohnson@remax.net

These calculations were made using a mortgage calculator on SEMNrealestate.com, the information is not guaranteed, specific individual situations and lenders will vary.

These calculations were made using a mortgage calculator on SEMNrealestate.com, the information is not guaranteed, specific individual situations and lenders will vary.

Deciding to make a move begins with why you are moving and identifying what you truly want in your next home. The following steps will get you off to a good start and give you experienced professionals to guide you along the way.

1. Make a list of things you are needing in your next home, such as the number of bedrooms, bathrooms, garage, living space, and outdoor space.  
2. Outline the perimeter of the geographic area you are willing to consider living in, giving consideration to commute time for work, shopping, and community attributes you may enjoy.
3. Identify your budget and how much you feel comfortable paying monthly for a home payment. 
4. Start saving. Most loans require a down payment plus there are moving expenses, utility deposits and home inspections that will need to be paid. 
5. Check your credit score, there are a few free ways to check without affecting your credit score.
6. DO NOT open new credit cards or make large purchases, If you do need to trade vehicles make sure you run it by your lender first.
7. Online mortgage calculators are easy to use as a quick reference when starting your home search but they do not replace an experienced lender. 
8. Get pre-approved for a loan, if you do not have a lender, we can recommend an experience professional.
9. Give us a call and schedule a free Home Buyers Consultation. Start out right with a personalized home buying plan designed for your needs. 
10.  We will schedule home showings that work for your busy schedule and guide you with experience and professional care every step of the way. 

For many buyers making a move is based on a change in lifestyle whether you are buying your first home, making a move to your dream home, buying a second home, or retiring, this move is important.  We are honored to have the opportunity to guide you are you venture ahead!

Roxanne Johnson, Broker, ABR, CRS, GRI

Your home mortgage is a monthly payment based typically on principal and interest.  When you pay less than 20 % down on the purchase price of your new home, you are required to have the real estate taxes and homeowners’ insurance included in your monthly payment.

The amount for the real estate taxes and homeowners’ insurance is put in a separate account with your lender called an escrow account.  Therefore, we refer to your taxes and insurance being escrowed. 

The lender maintains the account and is required to pay your real estate taxes and homeowners’ insurance as it comes due. Your monthly payment may be adjusted annually based on your property tax and homeowners’ insurance rate change.  

When you payoff your mortgage or sell the property, the lender is required to credit you for unused portions and typically the credit is reflected in your payoff amount.

Many homeowners elect to escrow the property taxes and insurance including it in their monthly payment as it eliminates large expenditures every six months and is easier to work into a monthly budget.

Roxanne Johnson

Broker, ABR, CRS, GRI

Many times, searching for a home starts out exciting and fun, then turns confusing and stressful as things get complicated quickly with so many big decisions to make when making one of the most important investments of your lifetime.  

Over the past 28 years, our team has helped hundreds of people find the right home based on their needs and interests.   In our free no obligation Buyer Consultation we work with you to start off on the right path with your home search.  The following are 4 basic steps included in the Buyer Consultation.

1. The Home Search: You will develop your home search checklist (the “must haves”), and any items that are on your wish list, articulating your preferences up-front will save time and money in the long run. Once we have defined your search criteria, we’ll use the latest digital technology to bring properties to your attention as soon as they hit the market, coming soon, and for sale by owners. Plus give you tips on how to best search for homes online saving you from receiving uninvited solicitations.
2. Letter of Credit/ Pre-Approval:  Being comfortable with your financial options before beginning your search will not only establish a price range for your home search, but it will also give you a comfort zoning when offering on a home. We work with some of the best lenders in the industry and can refer you to a seasoned professional.  Lenders will provide loan options best suited for you along with estimates of  monthly payments and cash needed for closing cost.  
3. Best Practices for Our Clients. We keep our fingers on the pulse of the market by monitoring recent sales activity and provide you with an educated view of the market. We will keep you informed as new listings become available, gather information and historic data for the properties, plus schedule times to view properties with you.  We will advise you as we draft an inviting offer to the seller and advise you on all negotiation on your behalf. We will put our years of experience to work for you from searching, looking, and offering on properties.
4. Identifying A Timeline:   Before we visit properties together, we’ll listen to your requirements, discuss the type of home, community, price range, and the timeline for your search. Its important for us to know what your goals are for making your move.

Whether you’re just starting to think about buying or are ready to actively search for a home, a Buyer Consultation will provide the knowledge you need to take the next steps and educate us on how best to meet your needs. After meeting, you will have a better understanding of the home purchase process and the actions you’ll need to take. Starting out on the right step will help relieve stress and make your home buying process more enjoyable

PUT OUR EXPERIENCE TO WORK FOR YOU! 

As a team of locally focused Realtors and marketing professionals we are committed to making the process seamless, stress-free, and enjoyable for our clients!

Roxanne Johnson

Broker, ABR, CRS, GRI

When considering buying a home and making a move an important part of the move is connecting with lender and getting pre-approved. So, what is the best type of loan for you? Loans are not one size fits all.   The best loan for you is the one that fits your personal financial need. The following is a brief snapshot of the different loan types.

Conventional Mortgages

1. Conventional mortgages are the most common type of mortgage.
2. Down payment requirements start at 3% to down.
3. Down payments at 20% down or more do not require private mortgage insurance (PMI)
4. Minimum credit score of at least 620 to qualify.
5. The overall borrowing cost after fees and interest tends to be lower than other loan types.
6. Appraisal guidelines are typically more forgiving on repair items.
7. Interest rate options of Fixed-Rate or Adjustable-Rate are offered on Conventional Mortgages

Government-Backed Loans

The Government Backed Loans are simply loan programs insured by government agencies and offered by lenders that offer an option to the buyers with less down payment requirements. three types of loans: FHA, VA and USDA loans.  The government insures these loans reducing the risk for the lender.   You may qualify for a government-backed loan if you can’t get a conventional loan. Buyers who don’t qualify for conventional loans or have limited cash savings may benefit from FHA, USDA, or VA loan

FHA Loans

1. Down payment of 3.5%, you may pay more down.
2. Credit score as low as 580, mor forgiving for buyers with credit issues from such life events as

Divorce, bankruptcy and medical expenses.

1. Are insured by the Federal Housing Administration for the lender.
2. Appraisal guidelines will require the home and property to be in good repair.

USDA Loans

1. Allow you to buy a home with no money down
2. USDA loans have lower mortgage insurance requirements than FHA loans.
3. You must meet income requirements and have relatively good credit.
4. Home must be in a suburban or rural area to qualify for a USDA loan.
5. Are insured by the United States Department of Agriculture.
6. Appraisal guidelines will require the home to be in good repair.

VA Loans

1. Allow you to buy a home with $0 down.
2. Lower interest rates than most other types
3. Are insured by the Department of Veterans Affairs loans for the lender.
4. Appraisal guidelines are not as restrictive as FHA or USDA loan types.
5. You must meet service requirements in the Armed Forces or National Guard to qualify for a VA loan. 

First step is to schedule a  Buyers Consultation with the Realtor that you would to guide you through the home buying process.  We will listen to your needs, answer your questions, and define a checklist for your new home.  This will be extremely helpful when meeting with a mortgage lender.  IF you do not have a lender, we have a list of professionals for you to select from.  

Our goal is to help you define the best home option for you and surround you with trusted professionals for a seamless experience as you make your move to your new home! We welcome the opportunity to be your Realtors for all your real estate needs!

Roxanne Johnson

Broker, ABR, CRS, GRI