Minnesota FHA203K

Down Payment Assistance Synopsis

Where there is a will, there is a way. There are many many programs today that are city specific. So, the attached synopsis is a multi county foreclosure down payment assistance pool. Basically, there is money available for purchasers of distressed homes. If you want to buy a home and are flexible in which area you make your purchase, we can try to find you some programs.

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Gifts and Grants can be considered towards borrowers funds on certain 3% down conventional loans

Yes, you read that right. I just got an email today from a leading mortgage insurance company that is willing to underwrite this loan. You will need at 740 or better score. But, what an opportunity. In many ways, this is like FHA, but with a little higher credit threshold. The KEY difference, besides credit score, is the lack of an upfront MI (mortgage insurance) premium and as well as a smaller required monthly premium. This product could be a game changer for the MI company and conventional loans.

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Purchase 80/10/10 and 80/5/15 STILL exists

As of this post, the 80/10/10 and 80/5/15 can still be done. While underwriting has allowed it, it has been very difficult to find a second mortgage product that would write a 5 or 10% second mortgage. Well, after many phone calls, we have sourced two lenders who at this time are willing to offer the second mortgage. One is a bank and the other is a credit union. As with EVERY program, the rules can and do change at any given moment. The key to both product is extremely high credit scores and a file that utilizes conservative ratios. If you don’t have at least a 700 score, this might not be something you can utilize at this time. For the 80/10/10, you will need a 740 or better score.

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What Is Your Home Worth Today?

I found a cool resource at http://www.FHFA.gov. If you go there, in the middle of the page you will find something called the Home Price Calculator. You input your home purchase information in terms of State, quarter in which you purchased and the quarter in which you’d like to get the valuation. Next, you hit calculate, and it will show you a chart. While it isn’t specific to YOUR exact home, it does give trends for your area. If you want specific information-specific to your home-within the Twin Cities metro-give me a call and we can discuss your situation. I can then give you guidance on what the value might be.

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Did you know-Current & Future Housing Data

Watch this video-then call me to help you buy or sell a new home or investment property.

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8 Tips For Finding Your New Home

A solid game plan can help you narrow your homebuying search to find the best home for you.

House hunting is just like any other shopping expedition. If you identify exactly what you want and do some research, you’ll zoom in on the home you want at the best price. These eight tips will guide you through a smart homebuying process.

1. Know thyself
Understand the type of home that suits your personality. Do you prefer a new or existing home? A ranch or a multistory home? If you’re leaning toward a fixer-upper, are you truly handy, or will you need to budget for contractors?

2. Research before you look
List the features you most want in a home and identify which are necessities and which are extras. Identify three to four neighborhoods you’d like to live in based on commute time, schools, recreation, crime, and price. Then hop onto REALTOR.com to get a feel for the homes available in your price range in your favorite neighborhoods. Use the results to prioritize your wants and needs so you can add in and weed out properties from the inventory you’d like to view.

3. Get your finances in order
Generally, lenders say you can afford a home priced two to three times your gross income. Create a budget so you know how much you’re comfortable spending each month on housing. Don’t wait until you’ve found a home and made an offer to investigate financing.

Gather your financial records and meet with a lender to get a prequalification letter spelling out how much you’re eligible to borrow. The lender won’t necessarily consider the extra fees you’ll pay when you purchase or your plans to begin a family or purchase a new car, so shop in a price range you’re comfortable with. Also, presenting an offer contingent on financing will make your bid less attractive to sellers.

4. Set a moving timeline
Do you have blemishes on your credit that will take time to clear up? If you already own, have you sold your current home? If not, you’ll need to factor in the time needed to sell. If you rent, when is your lease up? Do you expect interest rates to jump anytime soon? All these factors will affect your buying, closing, and moving timelines.

5. Think long term
Your future plans may dictate the type of home you’ll buy. Are you looking for a starter house with plans to move up in a few years, or do you hope to stay in the home for five to 10 years? With a starter, you may need to adjust your expectations. If you plan to nest, be sure your priority list helps you identify a home you’ll still love years from now.

6. Work with a REALTOR®
Ask people you trust for referrals to a real estate professional they trust. Interview agents to determine which have expertise in the neighborhoods and type of homes you’re interested in. Because homebuying triggers many emotions, consider whether an agent’s style meshes with your personality.

Also ask if the agent specializes in buyer representation. Unlike listing agents, whose first duty is to the seller, buyers’ reps work only for you even though they’re typically paid by the seller. Finally, check whether agents are REALTORS®, which means they’re members of the NATIONAL ASSOCIATION OF REALTORS®. NAR has been a champion of homeownership rights for more than a century.

7. Be realistic
It’s OK to be picky about the home and neighborhood you want, but don’t be close-minded, unrealistic, or blinded by minor imperfections. If you insist on living in a cul-de-sac, you may miss out on great homes on streets that are just as quiet and secluded.

On the flip side, don’t be so swayed by a “wow” feature that you forget about other issues—like noise levels—that can have a big impact on your quality of life. Use your priority list to evaluate each property, remembering there’s no such thing as the perfect home.

8. Limit the opinions you solicit
It’s natural to seek reassurance when making a big financial decision. But you know that saying about too many cooks in the kitchen. If you need a second opinion, select one or two people. But remain true to your list of wants and needs so the final decision is based on criteria you’ve identified as important.

G.M. Filisko is an attorney and award-winning writer who has found happiness in a brownstone in a historic Chicago neighborhood. A frequent contributor to many national publications including Bankrate.com, REALTOR® Magazine, and the American Bar Association Journal, she specializes in real estate, business, personal finance, and legal topics.

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4 Tips to Determine How Much Mortgage You Can Afford

By knowing how much mortgage you can handle, you can ensure that home ownership will fit in your budget.

Here are six surefire ways you can get your finances in order before you buy a home.

Homeownership should make you feel safe and secure, and that includes financially. Be sure you can afford your home by calculating how much of a mortgage you can safely fit into your budget.

Instead of just taking out the biggest mortgage a lender qualifies you to borrow, consider how much you want to pay each month for housing based on your financial and personal goals.

Think ahead to major life events and consider how those might influence your budget. Do you want to return to school for an advanced degree? Will a new child add day care to your monthly expenses? Does a relative plan to eventually live with you and contribute to the mortgage?

Still not sure how much you can afford? You can use the same formulas that most lenders use, or try another of these traditional methods for estimating the amount of mortgage you can afford.

1. The general rule of mortgage affordability
As a rule of thumb, you can typically afford a home priced two to three times your gross income. If you earn $100,000, you can typically afford a home between $200,000 and $300,000.

To understand how that rule applies to your particular financial situation, prepare a family budget and list all the costs of homeownership, like property taxes, insurance, maintenance, utilities, and community association fees, if applicable, as well as costs specific to your family, such as day care costs.

2. Factor in your downpayment
How much money do you have for a downpayment? The higher your downpayment, the lower your monthly payments will be. If you put down at least 20% of the home’s cost, you may not have to get private mortgage insurance, which costs hundreds each month. That leaves more money for your mortgage payment.
The lower your downpayment, the higher the loan amount you’ll need to qualify for and the higher your monthly mortgage payment.

3. Consider your overall debt
Lenders generally follow the 28/41 rule. Your monthly mortgage payments covering your home loan principal, interest, taxes, and insurance shouldn’t total more than 28% of your gross annual income. Your overall monthly payments for your mortgage plus all your other bills, like car loans, utilities, and credit cards, shouldn’t exceed 41% of your gross annual income.

Here’s how that works. If your gross annual income is $100,000, multiply by 28% and then divide by 12 months to arrive at a monthly mortgage payment of $2,333 or less. Next, check the total of all your monthly bills including your potential mortgage and make sure they don’t top 41%, or $3,416 in our example.

4. Use your rent as a mortgage guide
The tax benefits of homeownership generally allow you to afford a mortgage payment—including taxes and insurance—of about one-third more than your current rent payment without changing your lifestyle. So you can multiply your current rent by 1.33 to arrive at a rough estimate of a mortgage payment.

Here’s an example. If you currently pay $1,500 per month in rent, you should be able to comfortably afford a $2,000 monthly mortgage payment after factoring in the tax benefits of homeownership.

However, if you’re struggling to keep up with your rent, consider what amount would be comfortable and use that for the calcuation instead.

Also consider whether or not you’ll itemize your deductions. If you take the standard deduction, you can’t also deduct mortgage interest payments. Talking to a tax adviser, or using a tax software program to do a “what if” tax return, can help you see your tax situation more clearly.

G.M. Filisko is an attorney and award-winning writer who’s owned her own home for more than 20 years. A frequent contributor to many national publications including Bankrate.com, REALTOR® Magazine, and the American Bar Association Journal, she specializes in real estate, business, personal finance, and legal topics.

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Who Manages The HUD Homes?

The country is divided into different areas. Each area works with different companies. In addition, some areas have different rules. For example, the $100 down program is not available in all areas of the country. Like everything these days, you need to check on availability. To determine who is the manager, go to this map http://www.hud.gov/offices/hsg/sfh/reo/mm/mm3map.pdf

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Two Special Twin Cities Home Buying Programs

One program is called FPP-Foreclosure Partnership Program, and the other is NSP2 Homebuyer Assistance Program.  Both programs offer incentive money for a purchase.  I can use these financing programs with one of our mortgage investors.  Consider checking them out to see if they’d work for you.

HennipenCounty-Non-forclosedHomes-overview

HennipenCounty-Nsp2-overview

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FHA Extends Flipping Waiver-More Homes Can Be Rehabbed And Sold

This is great news. The waiver has been extended through the end of 2011. See the Mortgagee letter:

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You CAN do an FHA short sale

HUD recently issued guidance on this issue. IF you have an FHA loan, call me and we can work through the discussion of whether or not you may qualify for a short sale. See the HUD letter below.

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Rebuilding Credit To Get A Mortgage

Often, especially in this market due to the recession, we find potential home buyers who have had a life event or “bump in the road” that affects their ability to obtain a new loan. If you want to buy a home, you will have to have a certain number of reporting trade lines and for certain length of time. MOST mortgage programs require 3-5 trade lines and a minimum of two years of reporting. The other criteria is the actual credit score-which generally has to be 620, 640 or even 660 as it is all lender dependent. A manual underwriting where they use alternative credit such as rent payments, cell phone bill, utility bills, and the cable bill might be able to be used-but only with a few certain programs and lenders. So, the best bet is to re-establish credit as quickly as possible. HOW ABOUT NOW!! Don’t wait-it will only extend the time until you are going to be eligible. I have put together a list of resources that might be helpful. This list is only a starting place for your research. If you find another good resource please post it in the comments below so that the list can be expanded upon.

TOP IDEAS FOR CREDIT RE.doc

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Buying Rental Property In The Twin Cities

Have you ever wanted to own rental property, but were unsure where to start? I teach a class on the topic. I’ve decided to make the outline into a PPT. I cover the information in my class in much more depth and breadth, but this will give you a lot of useful information. If you are interested in discussing purchasing a rental property as an investment, just give me a call and we can set up a time to meet and review how I can help you become a “real estate mogul”.

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Mortgage Insurance May Still Be Deductible For Some Buyers

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Is There An Opportunity Right In Front Of YOU

I just watched an amazing video which I’ve posted below called the Money Tree. There are so many different interpretations. One that struck me was that people are oblivious to opportunity that is right in front of them. How many of us are looking for something that we already have or is within our reach? How many people are NOT buying real estate today when they could be looking at this as an incredible wealth building opportunity for what it is over the long term-assuming properties rise again in value? I was showing homes this past weekend. It was incredible to see townhomes in great communities selling for 40-60% less than they had sold for just as little as 5 years before. Luckily for my client, we are going to make an offer and ACT. Watch this video and don’t let the opportunities in your life pass you by. Don’t let life pass you by. Happy New Year and may 2011 be your best yet!

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December Is The Time To Reflect

Are each of us doing all we can to make the world a better place? Many of us have our favorite charity and organizations we support. RE/MAX is a very large sponsor of Children’s Miracle Network. Many people don’t realize how much has been given. Each time I sell a home, I automatically donate a portion of my commission to this organization. Other RE/MAX agents like myself contribute from their commission checks as well. Together, with RE/MAX we have collectively given over 100M. I would encourage everyone to consider finding an organization they believe in and make giving a part of their life. Just imagine what the world could look like?

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Getting Ready to Sell Your House

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HUD Has A YouTube Channel-Here Is There Vid On Buying A Home

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Google lets you create cool templated websites

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Can Home Ownership Contribute To Your Wealth?

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Minnesota Foreclosure And Distressed Home Fact Sheets PLUS Twin Cities First Time Buyer Special Programs

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Twin Cities Foreclosure Update

Here is our latest newsletter that has updates on foreclosures in the Twin Cities.

Also, watch the video below

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Minnesota First Time Home Buyer Tips

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Top Seven Tips For Home Buyers

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Underwater on your current NON FHA loan

What can you do if you are underwater on your current NON FHA loan, but are current on the loan (I DIDN”T say anything about having been late-just current), and would like to refinance.    There IS a new program–The FHA short refinance.  Before you get too excited, let me cover a couple of the “details’.  First, you must have a non FHA loan to start with.  Then, you can refinance into an FHA loan-up to 97.75% LTV (same as before) and up t0 115% CLTV.  The borrower is subject to maximum DTI-debt to income requirements (generally 31%)- as well as there must be a property valuation issue and current income impairment.

The key is that the first mortgage investor must write off at LEAST 10% of the existing mortgage debt and accept the payment as settlement in full.  The second investor must discount their position as well.  Is this likely???  If the borrower is “current” on the payments, why reduce the loan??  If the loan is insured with mortgage insurance, why take the loss?  If the second lien holder can sell their position to someone else or decides to look at pursuing a deficiency judgement, why would they want to do this.

Here is the HUD letter link

http://www.hud.gov/offices/adm/hudclips/letters/mortgagee/files/10-23ml.pdf

So, while I think the intentions are good, I think the actual application will be small.  What I’ve been seeing in the Twin Cities marketplace is that most lenders are refusing principal reductions and instead opting for foreclosure.

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FHA Mortgage Insurance Change-October 4th

For 30 year mortgages, the upfront is moving down from 2.25% to 1% and the monthly is moving from .55% to .9% for those putting less than 5% down and .85% for those putting more than 5% down payment.  Here is a link to an article discussing the changes:

http://www.washingtonpost.com/wp-dyn/content/article/2010/08/05/AR2010080506663.html

The question you might be asking is “is this a consumer benefit?” Here is one interpretation:

http://www.thinkbigworksmall.com/mypage/archive/1/52542/

On a separate note, doing a short refi with an FHA loan MAY be possible if the servicer agrees.  Here is the FHA rule:

http://www.hud.gov/offices/adm/hudclips/letters/mortgagee/files/10-23ml.pdf

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Data.gov – A Cool Site With Lots Of Great Info

http://www.Data.gov I just found this site and wanted to share it.  It has a ton of info and reports.  If you have a project or just an “inquiring mind”, this is sure to be a hit.  Check it out and get the data you need.

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FHA Loans, What and Why Are They?

By Tom Maneval

Federal Housing Administration (FHA) home loans are a great option for many homebuyers and homeowners looking to purchase or refinance. FHA home loans are specifically useful to borrowers who cannot make a big down payment, who want low monthly payments, whose credit is not great and qualifying for a conventional loan is difficult for them.

Congress created the FHA in 1934 and it became part of the Department of Housing and Urban Development (HUD) in 1965. The FHA is not a lender. The FHA is the largest insurer of mortgages in the world. Lenders are insured by the FHA against losses as a result of a homeowner defaulting on their mortgage loan. It insures single and multifamily homes including manufactured homes and hospitals. The FHA is the only government agency that does not cost the taxpayers anything operating entirely from the proceeds from its mortgage insurance which is initially part of the mortgage payment.

This program allows a first time home buyer, who might otherwise not qualify for a home loan to obtain one because the risk is removed from the lender by FHA who insures the loan. With the recent subprime lending collapse, the FHA home loans have become cool again, as mortgage lenders and brokers are flocking to the latest FHA loan programs. FHA has been around for decades, and there are many innovative programs to help different segments of the population to realize the dream of home ownership. A common misconception is that FHA home loans are for first time homebuyers. The fact is you can only have one FHA loan at a time whether it’s your second home or fifth. The mortgage limits for FHA home loans are set on an area-by-area or county-by-county basis.

This type of insurance is an attractive benefit for FHA approved and authorized lenders. If the homeowner defaults, the lender gets its money from the FHA. The lender or broker works with prospects to qualify their loan application to FHA guidelines for approval for this insurance for the loan.

FHA loan guidelines also provide attractive benefits to home buyers as qualification is usually less stringent than conventional loans. Plus, all FHA home loans are FULLY assumable, adding one more layer of protection for you and your family. Having an assumable loan at a good interest rate would be part of a good plan for selling your house in the future especially if the interest rates have gone up.

If refinancing a home, the current loan DOES NOT have to be an FHA loan. Refinancing an existing FHA home loan is actually called a streamline refinance. FHA loans are for all homeowners that are buying, or refinancing their home. FHA mortgage loans assist existing homeowners to convert their ARM to a reduced rate refinance loan that ensures a set fixed payment every month until the mortgage is paid off. With FHA refinancing, homeowners can count on market-low mortgage rates to pull cash out up to 85%, and in some cases 95% loan to value. FHA loans are for all homeowners that are buying, or refinancing their home.

Each type of FHA loan is unique and must be applied for individually. Attention is given to one’s ability to make payments and handle life’s expenses. Less attention is given to FICO scores when applying for an FHA loan than with a conventional loan. Qualifying for an FHA home loan is done by using a set of debt-to-income ratios that are a bit more in your favor than those used for conventional home loans.

The following two FHA loan requirements are important for qualifying: Housing expenses should not exceed 29% of your gross income; total indebtedness should not exceed 41% of your income. FHA home loans require a smaller down payment as well. Down payments for FHA home loans are low, generally 5% or even as low as 3.5%. The finance package in a nutshell is: FHA insurance + lender financing = FHA loan. Ask your lender for assistance in learning which FHA mortgage is right for you.

FHA home loans are available in rural and urban areas. FHA home loans are not loans granted by the government, but FHA home loans are mortgage loans that are guaranteed by the Federal Government. FHA home loans are generally offered at reasonable interest rates, and guarantee the mortgage company that the loan will be paid. So whether you are refinancing, buying your first home or your fifth, try out FHA.

Got more questions? Contact an FHA Loan Specialist today.

http://www.tmfinancialsolutions.com/?page=services

Article Source: http://EzineArticles.com/?expert=Tom_Maneval
http://EzineArticles.com/?FHA-Loans,-What-and-Why-Are-They?&id=2812903

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FHA Mortgage Loans are Back and Just in Time

By Aaron Gordon

When I first started in the mortgage business, at least one in four of all of my buyers got an FHA loan. The rates were fantastic, the down payment requirements minimal, and the credit requirements were close to meaningless. Most first – time home buyers got an FHA loan.

In the last three years, over 600 families have trusted me with their home loan needs. Of those 600, I did a total of two FHA loans over that time. One in 300.

I wasn’t alone. FHA guaranteed less than 5,000 loans in California last year. In 2003, they did over 100,000. A 95% decrease in demand. Nationally, FHA loans are down 50% from a few years ago.

FHA loans lost their popularity in the past few years for numerous reasons. Loan limits were too low for the fast-appreciating real estate market, income documentation guidelines were too strict, and appraisal restrictions were very difficult.

Subprime lenders, with looser guidelines, capitalized and met this demand.

Home values increased more than FHA lending limits did. The average home in Las Vegas was around $300,000. The FHA loan limit was around $270,000. Subprime lenders would go over $1 million.

FHA requires full documentation of your income and a 3% down payment. Subprime lenders were doing 100% loans with stated income with scores as low as 600.

Although sometimes flexible, FHA guidelines limit your debt-to-income ratio to 41%. Many subprime banks were letting borrowers go to 55%.

With rising sale prices, more borrowers went with stated income loans. FHA wouldn’t allow this. Subprime did.

The FHA appraisal requirements were much more strict and this also turned off many sellers. Subprime lenders had no additional requirements.

The FHA loan was, quite frankly, a last resort. Subprime had taken its place.

Today, that has changed. With all of the recent guideline changes, the subprime loan is nearly dead with anything less than 5-20% down. Many subprime banks have gone out of business. Many more will.

FHA is back!! Once again, borrowers are looking at this as a primary option, especially first time homebuyers.

There are two types of mortgage loans; government loans like FHA and VA, and then there are the rest, which are called conventional loans.

100% financing on conventional loans is not as readily available as it was, particularly for those with marginal credit. FHA has not changed. 97% financing was and is available regardless of credit score. In the last three months, I have closed five FHA loans.

FHA recognized their business was getting hurt by increasing home values so they dramatically increased their loan limits.

In Las Vegas today, the FHA loan limit is $304,000. This is right in line with our average sales price. The timing could not be better and, as a result, FHA loans are back as a very viable loan option.

If you have very little or no money available for a down payment, bad-to-fair credit and feel like you have way too many bills, FHA may be your key to homeownership today.

FHA does not loan money, they insure loans. You don’t go to the FHA to get a loan. You go to a mortgage company that has been approved with the FHA. These companies have special permission to underwrite and close the loan.

You can buy a single family home, a duplex, triplex, or 4-plex. FHA will even insure loans on manufactured/mobile homes.

As an approved FHA lender, when we do an FHA loan, it is insured by FHA. If the loan goes into default, they guarantee it. This means the loan has very little risk to the lender. As a result, the rates are nearly equal to that of a conventional loan, even though the credit scores may be way worse.

Rates on conventional loans are usually based on credit score. The better your score, the better your rate. This is not so with FHA. Everyone, regardless of score, gets a great rate.

FHA was started in the 1930′s to assist first-time homebuyers. The goal was to help families with lower and moderate income get home financing. The program was geared for minorities as well.

Many lenders in today’s subprime mess are pointing the fingers at each other. They believe that countless numbers of the homes going into default today are because of high subprime rates. They believe these homes would not be in jeopardy with an FHA loan with a much lower rate.

For example, last week I closed a borrower on an FHA loan. His credit score is 611 with limited trade lines and 3% down. His interest rate is 6.250% on a 30 year fixed, which he will never have to refinance if he doesn’t want to.

Last year, because of the loan amount, this loan would have probably gone subprime with an interest rate of closer to 8.000% on a 2 year fixed rate, that would have likely forced a refinance in 24 months.

And he doesn’t have a prepayment penalty!! FHA doesn’t have prepayment penalties. As you know, most subprime loans have prepayment penalties and if you want it waived plan on the rate going up by 1-2%.

The program works and provides incredible options for borrowers whose only choices in the last few years have mostly been awful.

There are many advantages to an FHA loan.

You are only required to put down a 3% down payment and the lender can help you get it. It can also be gifted from a close friend, a relative or a non-profit organization that provides financial assistance.

There are many private down payment assistance companies (DAPs) that can help you with the 3% down payment. The FHA allows this and works with these companies. You have likely heard of a Nehemiah. Nehemiah is a DAP. If you do a conventional loan, this is not allowed.

You can have less than perfect credit. In fact, your credit can be pretty bad. FHA is far less concerned about your credit score than they are your history over the last two years in paying your bills on time. They will often ignore previous financial troubles and other blemishes on your credit report.

There are no “set” guidelines about credit. There is much more flexibility at the underwriting level.

For example, I recently had an FHA loan where the borrower was putting down his own 3% and not using a DAP, he was employed for over two years, and he has no late payments for the past two years. He also had four months reserves. His credit score was under 550, his debt to income ratio was 47%, and he only had one current trade line. The loan was approved. The FHA rate at the time was 6.125%.

As opposed to most conventional lenders, which have strict guidelines, FHA underwriters have some discretion to look at the overall strength of the file and make a decision. For example, even though it is commonly thought your debt to income ratio must be 41% or less to qualify; I have seen FHA loans approved with debt to income ratios over 50%.

Some of the FHA guidelines are more strict. You do have to be two years out of bankruptcy from the date of discharge and you must have some good re-established credit to get an FHA loan.

If you had a foreclosure you likely need to wait at least three years for an FHA loan and your credit should be pretty clean after that date.

If you can prove the foreclosure occurred because of extenuating circumstances like the death of a spouse or a serious illness that prevented you from working, they will sometimes make an exception to this as well.

The FHA has many different choices of loan programs like 30-year fixed, 15-year fixed, 1, 3, 5, 7, and 10 year ARM’s too. Interest only is not available.

The rates are excellent as I discussed above. The fees are controlled by FHA so you usually pay less for the mortgage too.

In today’s market, there is a lot of bank-owned on the properties that are in need of pretty substantial repair. The FHA has a program that allows owner-occupied borrowers to finance up to $35,000 in the mortgage to make these repairs.

In a conventional loan, these repairs need to be made before the close of escrow. In many cases, the seller doesn’t want to make these repairs and offers the property “as is.” The buyer can’t afford to make the repairs and certainly doesn’t want to make them before they own the house. This usually kills the deal after the home inspection or appraisal.

The FHA has a plan for this. The program is called a 203(K) and it allows for the appraiser to consider the value of the home after all of the repairs and renovation is made. You get to buy the home, fix it up to be livable, and then you get to include all these costs in one easy loan. And you still only have to put 3% down. No other loan program allows for this.

When the loan is closed, the repair/renovation money is withheld in escrow, as well as additional reserve funds of 10-20%, to pay for these improvements and any overages that may occur that weren’t factored at the time.

The contractors go in, fix the house, and then they get paid through the withhold account and reserves. The biggest catch here is, once again, the home has to be owner-occupied. This program is not available for investors or second home buyers.

In today’s market, the only negatives to an FHA are loan are loan limits, which are $304,000 and that unless you put down 20%, which most people don’t, your FHA loan will require mortgage insurance.

Mortgage insurance (MI) is handled a little differently than you are used to with a conventional loan. For one, it’s usually a bit cheaper. FHA mortgage insurance is not based on credit score like conventional loan MI is. It runs 0.5% of the loan amount and is broken down over your monthly payments.

FHA also has an upfront insurance premium that is 1.5% of the loan amount. That premium is due at the close of escrow and can either be paid in full at close or added to the loan amount. As most FHA borrowers have very little money to put down, this premium is usually financed into the loan.

The good news here is that mortgage insurance, as of January 1, 2007, was made tax-deductible, so that helps as well.

And how about this? FHA loans are assumable!! If you want to sell your home, you can simply transfer it over to your buyer and he doesn’t have to go out and get a new loan. The buyer does have to meet the FHA credit standards, but as I have already touched on, those are very reasonable.

The bottom line is if you are a first-time homebuyer or you are a bit more credit-challenged and your lender suggests a subprime loan you should ask for FHA as an option.

In addition, if you are being quoted more than the “going rate” for a loan, you believe you can support your income with paycheck stubs and W-2′s, and the loan amount is $304,000 or under in Las Vegas, you will also want to ask about an FHA option.

If your preferred lender says FHA is not for you for any other reason other than loan amount or income documentation, and suggests a subprime loan, you may want to get information from a different lender. Not all lenders are permitted to do FHA loans. You want to make sure the reason why you are being steered away is not simply because they can’t do the loan.

Aaron Gordon is a top-producing Senior Mortgage Consultant with Maverick Residential Mortgage in Las Vegas, NV. His monthly newsletter currently goes out to over 10,000 real estate agents and other professionals in the Las Vegas area. He helps over 200 families each year who trust him in their mortgage needs in many states. He can be reached by email at aarongordon@maverickmortgage.com or you can see more newsletters at aarongordon.net

Article Source: http://EzineArticles.com/?expert=Aaron_Gordon
http://EzineArticles.com/?FHA-Mortgage-Loans-are-Back-and-Just-in-Time&id=578900

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Check Out Energy Rebates

EnergyStar.gov –  Check Out Energy Rebates

This is a government site that offers lots of energy saving tips as well as explains what energy saving grants or credits might be available.

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Foreclosure Trends Newsletter

Here is the latest issue of my foreclosure trends newsletter.  As you can see, the trend is not our friend, in the sense that the housing market has not recovered.  Until jobs come back and people are employed and feel safe in their employment, they will tend to avoid making a committment.

ForeclosureTrends.pdf

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Twin Cities Foreclosure Trends-From our MLS & Realty Trac

Besides the board of realtor sites:  http://theThing.mplsrealtor.com and market data posted elsewhere at http://www.MplsRealtor.com I have a subscription to Realty Trac.  My subscription gives me additional data about foreclosures and trends within certain zip codes.  This is in addition to my daily subscription to Finance & Commerce (a business newspaper that prints all the foreclosure information as well as very timely articles regarding the business community).  If you are looking for someone who has experience and access to information about distressed sales, we need to be working together.  Whether buyer or seller-I can help you understand the market we are in and the options and opportunities available to you.  Give me call today.

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Real Estate Information

These are a couple of my newsletters that have a ton of valuable information. Go check them out.

Foreclosure Market Trends Newsletter
http://www.realtytrac.com/MarketTrends/NewsLetter.aspx?guid=131bd355-1b69-4bd1-99cd-2f0c9a936810

Real Estate Cyber Space Tips
http://www.REcyber.com/cybertips/r11627

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Outstanding Video-An Inspiration To All-Be The Best You Can Be!

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Twin Cities Home buyer book

Thinking about buying a home but don’t know where to start? Why not start by reading the home buyer hand book that we have provided below. It is a great place to start to get the information you need. When you’re ready, we would love to help you find and finance a new home.

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Reverse Mortgage Purchase For MN Seniors

Yes IT IS being done!!  A reverse mortgage purchase using the FHA HECM loan.  We’re doing them at Venture Development.  We put together a power point on it for your review.  http://www.slideshare.net/mnguru/reverse-mortgage-purchase-senior-mortgage This is another interesting way that homes can be sold and buyers can achieve a housing payment that works for them.

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FHA 203K–For Remodel or purchase

As a Minnesota mortgage broker, we have investors who will fund the FHA 203k program.  Not every lender will allow for a 203K, as they require more paperwork and have more responsibility associated with them.  That being said, you will want to explore the 203K loan if you want to make some updates or remodel to an existing or new purchase.  I have run across a very knowledgeable 203K consultant.  You will definitely want to check out his site as well at: http://203kloanmn.com/about-203k-loan-minnesota When you are ready, call us and let’s begin your mortgage paperwork (we broker loans throughout Minnesota).

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FHA Short Sales-ALLOWED

Many people mistakenly think short sales can’t or won’t be done on FHA insured loans.  THIS IS NOT TRUE
Here is the link to the HUD pdf which outlines their current program guidelines:  http://www.hud.gov/offices/hsg/sfh/nsc/rep/pfsfact.pdf If you are in Minnesota and your home is within the 7 county metro area around the Twin Cities, we can help you list your home and do a short sale.

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FHA Credit Score Changes

FHA is thinking about changing their minimum credit score requirements for loans. In the meantime, lenders are adding their overlay on top of FHA. So, what this means is that although a loan will eligible for FHA insurance with a score of 580, they may impose a minimum of 640. MOST lenders today are 620. Many are moving to 640 and even 680!! This is why it is important to work with a broker that has a number of outlets. Otherwise, you may be told “NO” by your favorite lender on the street corner, when you could have been told “YES” and taken advantage of the low interest rates, tax credits and other incentives.

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FHA ARM’s are AVAILABLE

Many lenders/brokers are not offering the FHA ARM. WE DO!!!. FHA ARM’s adjust 1 percent per year, once per year, with a lifetime maximum adjustment of 5% over the start rate. Let’s look at a WORST case example. Lets start a 4% year 1. Upon adjustment with worst case, we’re looking at yr 2- 5%, yr 3- 6%, yr 4-7%, yr 5-8%, yr 6-9%. As with all ARM’s there is a formula to make the adjustment based on adding a margin to an index. The conventional ARMS usually have higher annual and lifetime caps, as well as a larger down payment requirement.

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FHA Upfront MIP Increasing to 2.25%

Due to an increase in foreclosures, FHA finds itself needing to increase the cost of mortgage insurance. The upfront MIP is increasing from 1.75% to 2.25%. FHA allows borrowers to purchase a home with 3.5% down. The borrowers using FHA often don’t have a lot of reserves or ability to put more down. The lack of financial resources coupled with a shaky economy has led to an increase in foreclosures. The insurance premiums are used to cover the mortgage losses. The monthly insurance cost of .55% of the loan will remain the same.

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When It Pays to Do It Yourself

Article From HouseLogic.com

By: Oliver Marks
Published: September 01, 2009

Doing home-improvement jobs yourself can be a smart way to save money, but choose the right DIY projects or you’ll end up paying dearly.

Why pay someone big bucks to do something you can just as easily do yourself? That’s the thinking that has gotten more Americans than ever swinging their own hammers. In a recent Time magazine poll, nearly a quarter of people said they were taking on more home-improvement projects themselves-understandably so, when you consider that it usually means a 50% to 75% discount, since all you pay for is materials.

But sometimes doing it yourself costs more than it saves, like when you decide to replace the toilet, end up flooding the basement, and have to pay a pro to fix your mistakes. Or, worse, if you become one of the more than 100,000 people injured each year doing home-improvement jobs. Here are some guidelines for deciding when DIY can save you money and when it could cost you.

Stick to routine maintenance for savings and safety

Seasonal home maintenance (http://www.houselogic.com/categories/maintain-structures-systems/) is ideal work for the DIY weekend warrior, since you can plan tasks in advance and get to them when your schedule allows. Because these are repeat projects, your savings will add up to big bucks over the years. Just by mowing your own lawn, for example, you can save $55 to $65 a week for a half-acre lawn during the growing season. The bigger the lot, the bigger the savings: with two acres, you’ll pocket around $150 per week.

When It Pays: Look for maintenance jobs that are relatively easy and need to be done regularly, so you can hone your skills over time. In addition to mowing, other good ones are snow removal, pruning shrubs, washing windows, sealing the deck, painting fences, fertilizing the lawn, and replacing air conditioner filters.
When It Doesn’t: Unless you have skill and experience on your side, stay off of any ladder taller than six feet; according to the U.S. Consumer Product Safety Commission (http://www.cpsc.gov), more than 164,000 people end up in emergency rooms every year because of ladder injuries. The same goes for operating power saws or attempting any major electrical work-it’s simply too risky if you don’t have the experience.

Act as your own GC on small jobs

If you’re more comfortable operating an iPhone than a circular saw, you may be able to act as your own general contractor on a home-improvement project and hire the carpenters, plumbers, and other tradesmen yourself. You’ll save 10% to 20% of the job cost, which is the contractor’s typical fee.

When it Pays: If it’s a small job that requires only two or three different tradesmen, and you have good existing relationships with top-quality professionals in those fields, consider DIY contracting.

When It Doesn’t: Unless you have an established network of contacts who will show up as promised, the time to spend on oversight, enough construction experience to spot potential problems, and the skill to negotiate disputes between the various subcontractors, trying to manage your own project can quickly send the schedule and budget off the rails.

Pitch in with sweat equity on big jobs

Contributing your own labor on a big job being handled by a professional crew can cut hundreds or even thousands of dollars off the contractor’s bill. Tear the cabinets and appliances out of your old kitchen before the contractor gets started, say, and you might knock $800 off the cost of your remodel, says Dean Bennett, a design/build contractor in Castle Rock, Colorado.

When it Pays: Grunt work-jobs that are labor intensive but require relatively little skill-makes the best homeowner contribution. Offer to do minor interior demolition like removing cabinets and pulling up old flooring, daily jobsite cleanup, product assembly, and simple landscaping like planting foundation shrubs and grass seed around your new addition.

When It Doesn’t: If you get in the crew’s way, you may slow them down far more than you help. Make your contributions when the workers aren’t around, such as in the morning before they arrive, or on nights and weekends after they’ve left.

Put on some of the finishing touches

Unlike the early phases of a construction job, which require skilled labor to frame walls, install plumbing pipes, and run wiring, many of the finishing touches on a project are comparatively simple and DIY-friendly. If you do the painting yourself for a new basement rec room, for instance, you can easily save $1,800, Bennett says.

When it Pays: If you have the skill-or a patient temperament and an experienced friend to teach you-finish work like setting tile, laying flooring, painting walls, and installing trim are all good DIY jobs.

When It Doesn’t: The downside to attempting your own finish work is that the results are very visible. Hammer dents in woodwork, for example, or sander ruts in your hardwood floors may cause you aggravation every time you see them. So unless you have a sure eye and a steady hand, it may not pay to embark on these tasks.

A former carpenter and newspaper reporter, Oliver Marks has been writing about home improvements for 16 years. He’s currently restoring his second fixer-upper with a mix of big hired projects and small do-it-himself jobs.

Reprinted from HouseLogic (houselogic.com) with permission of the NATIONAL ASSOCIATION OF REALTORS®
Copyright 2009. All rights reserved.
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What Your Remodeling Contract Should Say

Article From HouseLogic.com

By: Oliver Marks
Published: September 30, 2009

Review your remodeling contract carefully and adjust it to make sure it protects you in terms of payments, work schedules, and project specifications.

Even if you never intend to pick up a hammer for your remodeling project, there’s one tool that’s absolutely essential-a solid contract. But just having one often isn’t enough. That’s because the document a contractor gives you is designed to protect him. It’s up to you to add in some basic protections for yourself. Here’s what you need to know to make sure the remodeling contract you sign includes solid legal protection for you and your home.

Hiring a lawyer to review and make changes to a contract is a safe bet, especially since each state has its own construction-contract statutes. But not many homeowners are willing to shell out $500 for an attorney review, plus $1,000 to $1,500 additional fees to make wholesale revisions to a flawed contract. However, you can hand-write changes and additions in plain English and make sure both you and the contractor initial each change to the document, says Tampa, Fla., attorney George Meyer, who is chair-elect of the American Bar Association’s Forum on the Construction Industry. Here’s what you want to add (and subtract).

Project specs

Start by reviewing your contract, a process that should take several hours. The most important element of a contract is a thorough and complete description of the project, and the materials and the products that will be used. “It should say that the contractor will secure all necessary permits and approvals as well as what walls are being moved where, what type of countertops are going in, what type of sink, what type of faucet, and so forth,” says Meyer. “You can’t rely on everyone’s memory because if there’s a problem later, people may remember different things.” The contract needn’t contain these specs on its pages, it can simply refer to the contractor’s attached itemized bid. Avoid allowances (http://www.houselogic.com/articles/getting-best-work-contractor/), which are pools of money set aside for work to be determined later, and which often lead to cost overruns.

Payment schedule

The contract (http://www.houselogic.com/articles/getting-best-work-contractor/) should also state the total price for the job, and that it’s a fixed price-not an estimate. It should provide a schedule of how the payments will be made by linking them to milestones in the work-such as when the foundation, rough plumbing, and electricity will be completed-so you’re paying for work only after it’s done. “You should always have enough money left to hire someone else to finish the work if need be,” says Meyer. In general, the first payment should be no more than 10% of the total job and the final payment should be at least a few thousand dollars to ensure that it’s a big enough incentive to get the contractor back for the final niggling details. If you’re unsure whether the payment schedule is proportional to the milestones your contractor suggests, ask a friend who’s familiar with construction process or consult a construction attorney.

Start and end dates

A contractor’s boilerplate contract rarely includes dates for when he will begin work and when he will complete the job, so make sure those details are included. It’s not that he’ll be penalized if it runs late, only that if you ever have a major problem and need to sue him-or defend yourself from a suit he brings-showing that the contractor is, say, two months behind schedule will help you make your case. The dates needn’t be too exacting. If he says it’s a six to eight week job, eight or even nine weeks is fine for the contract, says Meyer.

Statement about change orders

Make sure the contract contains a line stating that any changes that will affect the cost of the job must be priced in writing and countersigned by both the contractor and homeowner before that work commences. That ensures that an offhand discussion about a possible change to the project won’t result in a huge unforeseen additional cost (http://www.houselogic.com/articles/getting-best-work-contractor/). It also helps you, as the homeowner, keep track of exactly how much you’ve added to the bottom line, so you can avoid the very common urge to keep expanding the job.

Binding arbitration

Many contractors include a line that says that rather than going through the courts, disputes will be resolved by an arbitrator. Some legal experts feel that this is a quicker and lower-cost solution to problems, so a binding arbitration clause isn’t necessarily a problem. What can be trouble is if the contract requires a specific arbitrator. “There are some big, national, well-respected arbitrators, like the American Arbitration Association (http://www.adr.org),” says Meyer. “And there are other questionable arbitrators that always side with the contractor. If a particular arbitrator is specified, I’d do some internet research about the agency to make sure it’s legit.”

Warranty

Having the contractor’s warranty in the contract seems like a good thing, right? Well including it is often actually a technique for limiting how much liability the contractor has. “It’s usually loaded up with exclusions and time limits,” says Meyer, “and you’re actually better off with no mention of warranty at all because then the only limits on his warranty are what’s in the state statutes.” In other words, keeping the contractor’s warranty language in the contract will likely mean you’re agreeing to less than what state law provides. For example, state law may specify a longer warranty term than what the contractor’s warranty offers. So, unless you’re having a lawyer review the contract, strike the warranty clause.

Technicalities

There are numerous state-by-state requirements for construction contracts. He may have to include his contractor’s license number, for example, and he may have to include a clause saying you have the right to rescind the contract within a certain time period after signing. And unless you and the contractor sign the document, it doesn’t matter what it says-it’s not a valid contract.

A former carpenter and newspaper reporter, Oliver Marks has been writing about home improvements for 16 years. He’s currently restoring his second fixer-upper with a mix of big hired projects and small do-it-himself jobs.

Reprinted from HouseLogic (houselogic.com) with permission of the NATIONAL ASSOCIATION OF REALTORS®
Copyright 2009. All rights reserved.

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Should You Move or Improve?

Article From HouseLogic.com

By: Oliver Marks
Published: August 28, 2009

Whether to move or improve is a harder question to answer than it was a few years ago, but a few cost-benefit calculations can help you make the right decision.

What do you do when your family outgrows your house, or when the quirks you once found charming about the place just aren’t livable anymore? A few years ago, the answers were easy. With house values climbing an average of 50% from 2001 to 2005 and lenders handing out big checks to nearly anyone who asked, you could quickly unload a too-small house and use the profits to help pay for a larger one. Or you could borrow against that growing equity to fund a big home-improvement project, with the full expectation of making your investment back someday when you sold. Flash forward a few years, and the rules of real estate have changed. In this marketplace, with home equity shrinking and banks reluctant to lend, is it smarter to move or improve? Here’s some advice to help you decide.

Moving has gotten harder

With median housing prices down 25% since their peak in 2006, some 15 million homeowners-almost one in four-owe more on their mortgages than they could get from a buyer, according to Celia Chen, senior director of Moody’s Economy.com (http://www.economy.com). And even folks who bought before the big run-up and can afford to sell at today’s lower prices still face steep odds trying to unload their homes with the glut of inventory on the market (36% more lawns wear For Sale signs now than a few years ago). There was an uptick in units sold in early 2009, leading some economists to predict that the market has begun to rebound, but selling a house is likely going to remain difficult for a while.

Still, there can be an advantage to trading up now: If your house has curb appeal and a good kitchen-and you price it right-offers will come. You may not turn a big profit, but once you sell, you become a buyer in this buyer’s market. That means you’ll find what you’re looking for and pay less for it than a few years ago.

To analyze your trade-up options, check local listings to ballpark the price you could realistically get for your home and what you’d have to pay for the next place. Then contact a bank to see if, based on those figures and your financial situation, you’re likely to qualify for the new mortgage. Or do your research online: Investigate home values at online real estate sites and how much of a mortgage you’d qualify for at bankrate.com (http://www.bankrate.com).

Improving has gotten easier

The economic slump has actually made renovating the home you already own a bit easier. The construction-industry slowdown has lowered the cost of some building materials: Plywood is down 46%, for example, framing lumber is down 42%, and drywall is down 25%, according to Bernard Markstein, senior economist for the National Association of Home Builders (http://www.nahb.org). Many contractors are also charging less for labor, to compete for the smaller pool of available jobs. What’s more, you won’t have to wait months for a contractor to show up-chances are he’ll be able to start in a matter of days.

Of course, you’ll still need to come up with cash to pay for the project. And the news is good there, too: As a general rule, improving costs less than trading up. Figure somewhere between $100 and $200 per square foot for new construction or a major remodel, depending on the scope of the project and labor costs in your area. (For help with budgeting and financing, see”Budgeting for a Remodel” (http://www.houselogic.com/articles/budget-for-remodel/) ) A two-story addition with a family room, bedroom, and bathroom costs an average of $156,309, according to Remodeling Magazine’s 2009-10 Cost vs. Value Report. (http://www.remodeling.hw.net/2008/costvsvalue/national.aspx)

Now more than ever, though, you need to make sure that you invest your money wisely. In other words, will your $75,000 kitchen remodel increase your home value by $75,000-or by anything close? For guidelines, check out the Cost vs. Value Report, which gives national average cost and payback figures for 30 popular remodeling projects.
To assess what’s right for your particular house, let your neighborhood be your guide. If there’s any chance that you’ll move within the next 10 years (and in this economy, who can be sure?) keep your improvements in line with those of other houses on your block, or you risk losing the money when you sell.

The most important considerations haven’t changed

Your house isn’t just your largest investment, of course, it’s also the place where your family lives. Financial considerations aside, the question of whether to move or improve should be decided by the things you cannot change about your current home: the school district, the amount of traffic on your street, the size and layout of your yard, your commute, the ease of access to markets and malls, and your neighborhood quality of life. If you love the spot, improving makes sense. But if a different location would be an improvement in its own right, then trading up could be the way to go.

A former carpenter and newspaper reporter, Oliver Marks has been writing about home improvements for 16 years. He’s currently restoring his second fixer-upper with a mix of big hired projects and small do-it-himself jobs.

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Reprinted from HouseLogic (houselogic.com) with permission of the NATIONAL ASSOCIATION OF REALTORS®
Copyright 2009. All rights reserved.

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5 Essential Questions to Ask Before Hiring a Contractor

Article From HouseLogic.com

By: Oliver Marks
Published: September 30, 2009

You’re ready to remodel but you want to make sure you get the best contractor for the job. Here’s what to ask the candidates before you decide.

For all of the excitement of choosing plumbing fixtures, cabinets, and tiles for a remodeling project, the most important decision you make won’t involve color swatches or glossy brochures. It’s the contractor you pick that makes or breaks the job. That choice will determine the quality of the craftsmanship, the timeliness of the work, and the amount of emotional and financial stress the process puts on you. To make sure you’re getting the best contractor for the job, here are five questions to ask the candidates.

1. Would you please itemize your bid?
Many contractors prefer to give you a single, bottom-line price for your project, but this puts you in the dark about what they’re charging for each aspect of the job. For example, let’s say the original plan calls for beadboard wainscot in your bathroom, but you decide not to install it after all. How much should you be credited for eliminating that work? With a single bottom-line price, you have no way to know.

On the other hand, if you get an itemized bid, it’ll show the costs for all of the various elements of the job-demolition, framing, plumbing, electrical, tile, fixtures, and so forth. That makes it easier to compare different contractors’ prices and see where the discrepancies are. If you need to cut the project costs, you can easily assess your options. Plus, an itemized bid becomes valuable documentation about the exact scope of the project, which may eliminate disputes later.

The contractor shouldn’t give you a hard time about itemizing his bid. He has to figure out his total price line by line anyway, so you’re not asking him to do more work, only to share the details. If he resists, it means he wants to withhold important information about his bid-a red flag for sure.

2. Is your bid an estimate or a fixed price?
Homeowners generally assume that the bid they’re seeing is a fixed price, but some contractors treat their proposals as estimates, meaning bills could wind up being higher in the end. If he calls it an estimate, request a fixed price bid instead. If he says he can’t offer a fixed price because there are too many unknowns about the job, then eliminate the unknowns.

“Have him open up a wall to check the structure he’s unsure about or go back to your architect and solidify the design plans,” says Tampa, Fla., attorney George Meyer, who is chair-elect of the American Bar
Association’s Forum on the Construction Industry. If you simply cannot resolve the unknowns he’s concerned about, have the project specs describe what he expects to do-and if he needs to do additional work later, you can do a change order (http://www.houselogic.com/articles/what-remodeling-contract-should-say/) (a written mini-bid for new work).

3. How long have you been doing business in this town?
A contractor who’s been plying his trade locally for 5 or 10 years has an established network of subcontractors and suppliers in the area and a local reputation to uphold. That makes him a safer bet than a contractor who’s either new to the business or new to the area-or who’s planning to commute to your job from 50 miles away.

You want to see a nearby address (not a PO box) on his business card-and should ask him to include one or two of his earliest clients on your list of references. This will help you verify that he hasn’t just recently hung his shingle-and will give you perspective from a homeowner who has lived with the contractor’s work for years. After all, the test of a quality job, whether it’s a bluestone patio or a family room addition, is how well it stands the test of time.

4. Who are your main suppliers?
You’ve found a few potential contractors, you’ve talked to the happy former clients on each of their reference lists, now it’s time for one additional bit of homework: talking to their primary suppliers. There’s no better reference for a tile setter, for example, than his preferred tile shop; for a general contractor than his favorite lumberyard or home center pro desk; for a plumber than the kitchen and bath showroom where he’s on a first name basis.

The proprietors of these shops know a contractor’s professional reputation, whether he has left a trail of unhappy customers in his wake, if he’s reliable about paying his bills-and whether he’s someone you’ll want to hire. The contractor should have absolutely no qualms about telling you where he gets his materials, as long as he’s an upstanding customer.

5. I’d like to meet the job foreman-can you take me to a project he’s running?
Many contractors don’t actually swing hammers. They spend their days bidding new work and managing their various jobs and workers. In some cases, the contractor you hire may not visit the jobsite every day-or may not even show himself again after you’ve signed the contract. So the job foreman-the one who’s working on your project every day-is actually the most important member of your team.

Meeting him in person and seeing a job that he’s running should give you a feel for whether he’s someone you want managing your project. Plus, it gives the general contractor an incentive to assign you one of his better crews since you’re more likely to hire him if you see his A Team. If the contractor says he’ll be running the job himself, ask whether he’ll be there every day. Again, he’ll want to give you a positive response-something you can hold him to later on.

It’s not only the answers to these questions that will help you judge potential contractors-it’s the way they answer them. Were they easy to talk to and forthcoming with details or did they hem and haw and make you ask more than once? Difficulty communicating now means difficulty communicating on the job later. But clear, timely and thoughtful responses-combined with terrific references, great completed work that you’ve seen, and a smart take on your project-may mean you’ve found the right pro for your job.

A former carpenter and newspaper reporter, Oliver Marks has been writing about home improvements for 16 years. He’s currently restoring his second fixer-upper with a mix of big hired projects and small do-it-himself jobs.

Reprinted from HouseLogic (houselogic.com) with permission of the NATIONAL ASSOCIATION OF REALTORS®
Copyright 2009. All rights reserved.

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Budget for a Remodel

Article From HouseLogic.com

By: Oliver Marks
Published: August 28, 2009

To calculate how much remodel you can afford, follow these four steps: Ballpark the cost, establish a spending limit, make a wish list, and set your priorities.

What’s on your remodeling wish list? Maybe you’re longing for a spa-like master bathroom, a new eat-in kitchen, or a garage with space enough to fit your cars and your outdoor gear. Well, when it comes to home improvements, knowing what you want is the easy part. The tougher question is figuring out how much you can afford. Follow this four-step plan to arrive at the answer.

Ballpark the costs

The first step is to get a handle on how much your remodeling dreams will cost. Remodeling Magazine’s 2009-10 Cost vs. Value Report (http://www.remodeling.hw.net/2008/costvsvalue/national.aspx) gives national averages for 30 common projects. Or you can use a per-square-foot estimate: In general, major upgrades, such as a bathroom remodel or a family-room addition, run $100 to $200 per square foot. Your local National Association of Home Builders (http://www.NAHB.ORG) affiliate can help with estimates. At this point, you’re not trying to nail down exact prices, but to get a rough sense of what your project might cost.

Figure out how much you have to spend

Once you have a ballpark cost estimate, the next question is whether you have the money. If you’re paying cash, that’s pretty easy to answer. But if you’re borrowing, you need to assess how much a bank will lend you (http://www.houselogic.com/articles/a-guide-to-equity-loan-options/) and what that loan will add to your monthly expenses.

For the vast majority of homeowners, the best way to borrow for a home improvement is a home equity line of credit (http://www.houselogic.com/articles/consider-home-equity-line-of-credit/). A HELOC (pronounced HEE-lock) is a loan that’s secured by your home equity, which means that it qualifies for a lower rate than other loan types, and you can deduct the interest on your taxes. Because a HELOC is a line of credit rather than a lump-sum loan, it comes with a checkbook that you use to withdraw money as needed, up to the maximum amount of the loan. For help shopping for a HELOC, download our free worksheet.

The catch is that the minimum payment on a HELOC is just that month’s interest; you’re not required to pay back any principal. Like only paying the minimum due on a credit card, that’s a recipe for getting stuck in debt. Instead, establish your own repayment schedule. You can do this simply by paying 1/60th of the principal (for a five-year paydown) or 1/120th (for 10 years) in addition to the monthly interest. If you can’t afford that much, then you should reconsider your project.

Get quotes from contractors

Once you have ballpark estimates of what your job might cost and how much you can spend, you know whether it’s feasible to move forward. Assuming the numbers are within shooting range of each other, it’s time to get a nuts-and-bolts assessment of project costs.

Don’t ask contractors for bids yet, though. First, you need to determine exactly what you want, right down to the kitchen countertop material and the type of faucet. By specifying these details up front, you ensure that contractors are all pricing the same things, rather than the countertop and faucet they assume you want. If you’re using an architect or designer, bring them in now to help with these choices. If not, consult magazines, go to showrooms, and visit friends’ houses for ideas.

Next, get recommendations for at least three contractors from friends, neighbors, and other tradesmen that you trust. Give each one your project description and specific product lists and request an itemized bid. To make a final decision, assess some of their previous work, their attitudes, and their references, and then choose the contractor who impresses you most.

Prioritize and phase

Reprinted from HouseLogic (houselogic.com) with permission of the NATIONAL ASSOCIATION OF REALTORS®
Copyright 2009. All rights reserved.

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Open Source Documents-Unbelievable Resources-Find YOUR topic of Interest

If you’ve never visited http://www.Archive.org, you are missing a wonderful site.  From this site, you will find many resources that are out of copyright and you can download and use them as you wish.  You will find all the classics and some fun things as well.  Just for fun, I have the download of a book called “Little Gardens” which is a book about setting up a garden on a city lot.  This is just one of the MANY fun things you’ll find.  You can download and watch old music, movies, and cartoons as well.  Plan to spend some time on the site should you decide to visit, as it is very cool.  Click here to download the book Little Gardens

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Sell Your Home Faster-Learn The Home Selling Secrets Of Successful Sellers

Here is a special report that outlines over 450 ideas on how to sell your home faster.  This report is just one of the many home buyer, home seller, and investor reports that I can make available to you.  Read this report and call me to arrange a time to see how I can help.  Download Now

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Extension And Expansion Of Home Buyer Credit-4/30/2010

A Big WOW!!  The credit has been expanded to include homeowners who have owned their home for the past 5 years. No longer do you need to be a first time buyer.  The dollar limit is $8000 for first time buyers and $6500 for move up buyers.  This GREAT news.  Combine this with 50 year lows in interest rates, and you’d be crazy not to consider making a move.  If you feel secure in your job, think hard about buying  home at this time.  We can help you make the right move. Visit this site-which is from the National Association Of Home Builders  http://www.federalhousingtaxcredit.com/faq2.php This site give you all the rules and regulations as they now apply.

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Why Foreclosure Is Often Preferred By The Loan Servicer Instead Of Offering A Loan Modification

Have you ever wondered why a foreclosure occurs when a better solution might have been a modification?  Would you like to read the facts and figures and see how mortgages are bundled, sold and serviced?  You will soon see it is isn’t pretty, we are in the midst of a crisis, and it is likely to get worse before it gets better.  That being said, you can probably guess why-it’s about the money.  It is a little more complex than that-the report is 60 pages-but is explains the incentive and disincentives that are at conflict within the mortgage market today.  Once you understand how all the pieces go together, you can see that something “different” needs to be done.  I am a strong free market believer, but in this case, the government needs to have a mandate and rule that is guided towards keeping people in their homes.  Left to current industry solutions, the mortgage mess will continue to play out and get worse.  If you click on the link below, you will find the free report from the National Consumer Law Center.

http://www.consumerlaw.org/issues/mortgage_servicing/content/Servicer-Report1009.pdf

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Minnesota Real Estate Newsletter Gives Access To Great Computer & Life Tips

I maintain a number of real estate sites, blogs, and newsletters. One newsletter that provides a number of computer tips to help you function better with a computer is http://www.REcyber.com/cybertips/r11627 The site is full of cyber space tricks and great places to visit. We have link to this site on the list of MN Real Estate links, but I wanted to highlight this particular newsletter because it different from what most agents provide. From this newsletter, you can also access all the back issues-from 2001 and beyond. It is really quite a useful resource-spend some time there if you have a chance.

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Make The Right Home Improvements & Increase Your MN Home Value

Are you ready to sell your Minnesota home for the highest dollar with the least amount of hassle? I have helped hundreds of MN homeowners get their home sold. Can I help you?

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Minnesota Home Seller Secrets

Are you ready to sell your Minnesota home for the highest dollar with the least amount of hassle? I have helped hundreds of MN homeowners get their home sold. Can I help you?

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Minnesota Home Buyer Secrets

First, read the guide and learn how to purchase a Minnesota home successfully. Then, call me to set up an appointment to begin the process.

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How Do I Pay for a Remodel or Addition?

One of the main concerns you may have if you are doing a remodel or addition in the Twin Cities area is how you are going to pay for it. Thankfully, you’ll find that there are a variety of different payment options that you can consider when you are trying to complete a remodeling project or you want to do a new addition on to your home. From home equity loans to using your savings, you have many options to choose from. Here is a closer look at the options for payment that you have to consider, as well as the pros and cons for each one.

Home Equity Loans

When it comes to paying for your addition or remodel, one of the best financing options that you have is a home equity loan. This is basically a loan against the equity that is in your home. No, this is not a new mortgage, but it allows you to get money back from the equity that is in your home. When it comes to the pros, you’ll find that this type of a loan is usually going to be deductible from your taxes. At the beginning when you get the loan, you can get the entire lump of money that you need. You can get a great deal by getting a variety of quotes. On the negative side, this gives you another loan that you have to pay for. You also have to make sure that you have enough equity in your home to do this.

Loans Against Your Retirement

Another option that you have for financing your addition or remodeling project is to take out loans against your retirement. On the pro side, you’ll find that you get to pay the interest to yourself on this loan that you take out. However, there are some disadvantages as well. The interested that it would be making if invested is lost. Also, if you happen to lose the job that you have, you may have to pay that loan back right away to the bank.

Construction Loans

Construction loans, otherwise known as a construction mortgage, is another option you have when trying to pay for a home addition. If you are going with a remodeling project of addition that is going to be fairly large, this is a great idea. Even if you do not have enough equity in your home to get a home equity loan, usually you can get a construction loan anyway. On the other hand, the interest rates are quite a bit higher than the home equity loans and they are not deductible on your taxes. In many cases you’ll find that these loans are only short term as well until the construction has been totally completed.

Home Equity Line of Credit

A home equity line of credit is yet another option to consider. This is a bit different than a home equity loan. With the line of credit, you don’t have to take all the money at once, which means that in the beginning, the finance charges that you will have to pay are quite a bit lower. You can also get quotes on these lines of credit to help you save money and get an excellent rate. It can be a negative option though because the repayment period is not as long as a mortgage and you have to pay on another loan other than your home mortgage.

Refinancing and Cashing Out

If you refinance your home for a higher amount and then take the extra cash, this can help you to get the money that is needed for your home addition. Usually when you go with just one loan that is larger, you can get a better interest rate. However, you do have to have enough equity in your home to get a higher amount on the refinance. The entire loan will be charged interest that you’ll have to pay as well.

Spending Your Savings

If you actually do have a savings account build up, then you may want to consider using it to help pay for a remodeling job or for a home addition. This is probably one of the best ways that you can pay for this. It is definitely going to be the option that is going to cost you the least. However, if you do decide to go this route, you should never use up everything that you have in your savings account. Some money should be saved in order to take care of an emergency if you happen to have one.

Getting a Loan from the Contractor

Contractors often offer loans as well and they are available to most people who own a home. Beware though, they usually have extremely high interest rates and the terms are not always the best. Also, you may have to work with a certain contractor if you take out this type of a loan, so it is usually not the best option for you.

Using Your Credit Cards

Using your credit cards is another option that you can use to pay for your additions or remodels. Many people who own a home do have a credit card and may be able to use them to pay for some of the costs related to remodeling or adding on to their homes. However, these options are in no way deductible from your taxes and the interest rates are very high as well. So, when you are doing a remodeling job in Minnesota, credit cards are not really the best way for you to go.

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Major Remodel and Home Additions – Concerns, Costs, and Issues

Whether you are planning to do a major remodel or you want to do a major home addition, there are going to be so many different things to keep in mind. After all, many people don’t realize what they are getting into when they start a room addition or a remodeling addition to their home. You’ll find that there is much to think about before you get started and as the addition or remodel occurs. There are quite a few concerns, you have the remodel or home addition cost to think about, and there are various issues that can crop up. So, it’s important that you know about these things before you get started. Here’s a closer look at the costs associated with a remodel or home addition, some of the top concerns when you are remodeling in your home, and a few remodeling and addition issues that you’ll need to keep in mind.

The Costs of a Major Remodel or Home Addition

First of all, when it comes to a home addition or even a major remodel on your home, you’ll find that there are a variety of different costs. It’s best to find out about them up front rather than to be shocked about them in the future. If you are going to have someone design the addition or remodel, then you’ll have to pay for the designing. Permits to do the house addition are also going to cost you once the project has been appraised. Site preparation, foundation work, plumbing, electrical work, and cooling and cooling are all going to cost as well. Don’t forget you’ll have to pay for sheet rock, shingles for the roof, siding, flooring, and more. Of course the windows, doors, appliances, fixtures, and the finish work is going to cost you too. So, as you can see, there are definitely some major costs that you’ll need to be aware of.

Top Concerns When Remodeling

When it comes to a remodel addition, there are many concerns that you should be keeping in mind as well. Here are some of the top concerns that you’ll need to have when you are going to add a new addition or a remodel to your home.

• The Cost -  Of course as mentioned, the cost of the home addition is definitely going to be a concern. In fact, many people find out that the addition they wanted ends up costing them so much more than they ever planned on. This is why it’s important to take care of this concern by coming up with a budget that you can stick to when you are doing this type of home project.

• Finding the Right Contractor – Another important concern to keep in mind is finding the right contractor for your needs. You need to insure that you get a quality remodeling or addition contractor that can help you complete your project. Of course there are many things to consider when it comes to picking out a great contractor. Insurance, license, experience, and price are all important things that you should be considering.

• Environmental Concerns – Environmental concerns should also be kept in mind when you are getting ready to do an addition to home. Whether it is a small addition or a large room addition, you want to consider how you are going to affect the environment of your home with the addition that you want for your home.

• Integrity of the Structure – The integrity of the structure should also be kept in mind when it comes to home additions as well. You want to ensure that nothing is done to the home that is going to cause a problem with the structure of the existing home.

Remodeling and Addition Issues

Whether you are doing a remodel or an addition in the Twin Cities, there are several different issues to keep in mind that you will definitely need to consider. Make sure that you consider these issues carefully no matter whether you are doing a small addition or a remodel on your home.

• Plenty of Storage Space -  Make sure that you have plenty of storage space. This can be a major issue whether doing a remodel or an addition. If you don’t have enough storage space, you are going to regret this in the future. So you should take careful measures to ensure that you have enough space to provide excellent storage for you.

• Adequate Floor Space - Adequate floor space is another issue that you should keep in mind when it comes to your home design. No doubt you want to make the best out of the floor space that you have if you are doing a remodeling project. However, if you are doing a home addition, you’ll want to make sure that you design in enough space for your needs.

• Having the Needed Permits – Last of all, the needed permits for building home addition is going to be imperative. Without the right permits, you could end up getting fined. So, do your research. Find out what kind of permits you are going to need to complete the project.

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Choosing a Contractor and Comparing Bids

Whether you are doing a remodeling project in St. Paul or Minneapolis, choosing a contractor is one of the most important things that you will do. Having a great contractor on your side is extremely important and will make the difference between a mediocre remodel or one that is excellent. Of course while you are on the lookout for a top notch contractor, you are going to want to compare bids that contractors offer you along the way. You’ll find that there is a lot of room for negotiation when it comes to the bids on the remodeling. So, when you do get a bit, you should learn to negotiate to make sure you get what you want. If you are ready to start comparing bids, here is a closer look at what to look for in bids, comparing them, the materials to consider, and the best tips for finding the best possible bid out there.

Things to Look for in a Bid

First of all, before you can really make a decision on contractor bids in Minnesota, you are going to have to know what you should be looking for in a bid. This is something that occurs before you sign a construction contract. So, here are the top things you need to look for in contractor bids on construction services for your home.

• Clear Definition of the Work – One thing that you should be looking for in a good bid is a clear definition of the work that you need to have done. The bid should be very specific about this. Having some plans included is a great idea, with the initials of the contractor at the bottom of the each page of the plans that have to do with their proposal.

• Dates of Starting and Completion – Another aspect to look for in a good bid is the dates when the contractor is going to state and when they propose to have the project completed.

• The Insurance Provisions – The insurance provisions should also be included in any bids from contractors. You will want to know what is covered and who is going to be providing that coverage.

• Price of the Bid – Of course the price of the bid should be included in the bid. Of course not just the price should be included. However, how the price will be paid should be included and when the money should be paid should also be a part of the bid. Here you should find how long the bid is going to hold as well.

• Responsibility of Cleanup – The responsibility of the cleanup is another thing that should be included in the bid that the contractors give to you. The last thing you want is to get left cleaning up everything on your own. So, make sure you see on the bid whether they will clean up after the work or if they are going leave it all up to you. This can definitely make a difference in the bid that you decide to choose, so read very carefully.

• Conditions that Can Lead to Withholding Payment – Any conditions that can lead to you withholding payment is something else that should definitely be included on the bid.

Comparing the Bids

Once you have several different bids from various contractors, that include the construction services that will be offered and more, then you will need to start actually comparing these bids so you can go on to have a construction contract drawn up and signed. Carefully compare these contractor bids. You want to make sure that you go with the best possible option for your needs. A great way to compare is to come up with a comparison sheet so you can easily compare these bids. This will allow you to more easily see how the bids compare to each other. Remember, the price is not the only thing that you are going to want to consider. The quality of materials and amount of work is going to matter as well. Go for the best value for your money, not just the lowest price.

Keep the Quality of Materials in Mind

Product  material quality is an important consideration when you are taking a look at the contractor bids that are offered to you. You  need to realize that the lowest price that is offered to you may not be the best deal for you. Make sure that you look at the materials that are going to be used. Make sure that the materials used are going to be quality. Why pay less only to have lower grade materials used on the remodel? So, ensure that you keep this in mind when you are looking at the bids.

Top Tips for Finding the Best Bid

So, you may be wondering how you can find the best possible contractor bid. Well, there are several ways to do this. First of all, you need to go through the bids line by line. This way you get a good idea of the comparison. Go with the more experienced and quality contractor as well, even if they don’t have the lower price. Consider trying to negotiate the price. Let them know you’d love to have them work with you, but you have a limited budget. They may be willing to come down a bit on the price quoted in the bid. If you never ask about a lower price, you’ll never know if they will come down a bit. So, make sure that you get out there and do some negotiating so you and the Minnesota contractor can come to a good agreement.

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Elements of a Remodeling Contract

Before letting any Minnesota contractor get started on your remodeling, one of the most important things you need to keep in mind is the remodeling contract. You should always make sure that there is a contract in place. In fact, you should never allow the contractor you choose to start any work until you have looked over the contract and then signed it. The contract should spell out every part of the project, from the time span to the cost of the entire project by the end. Don’t just take the word of the contractor. You should have the agreement that you come to in writing. Not sure what should be in a contract?  Well, let’s take a look at the elements of a remodeling contract and some safety tips for signing a contract as well.

Things the Remodeling Contract Should Definitely Include

There are a variety of different things that every remodeling contract should have. Here are top things to look for before you sign a contract.

• Contact Information – The remodeling contract should include the contact information of the contractor. This includes their address, a phone number, and their license number as well. This way you have all this information on hand. Ensure that their full name, not just their business name, is included too.

• Some Type of Visual – There should be a visual representation of what is going to be done. This can include things like sketches, floor plans, or even blueprints. This helps to show what your contractor is to do.

• Time Table – You should also ensure that the remodeling contract has a time table for completion. This should include the date when the construction is going to start and the date when it will be completed as well.

• Money Information – This should include the total price that you are going to have to pay for the job. The payment schedule should also be drawn out so you can see it.

• Materials and Products – Each type of materials and products should be described. On the contract they should easily be identified. Brand names, the number of the model, size, and even color should be included.

• Information on Insurance – Take a look closely. The insurance information of the contractor should be located on the remodeling contract too.

• Warranty on the Work – If the contractor is providing you with statuary warranties, insured warranties, or any other type of warranty, it should be included in the contract. This way you can refer to it and prove that there was a warranty on the work that was done.

• Cleanup Information - If you are expecting the contractor to take care of all the cleanup, then this should be included in the remodeling contract. Don’t take their word for it. If it’s not in the contract, they may not honor it, even though they may have said that it was included.

Safety Tips for Signing a Contract

You should never blindly be signing a contract with a contractor. Here are some top safety tips to keep in mind before you sign your name on the paper.

• Tip #1 – You should never sign your name to a contract that isn’t totally filled out. If you do, the contractor could add some things to the contract after they already have your name. This is a way that you can be taken advantage of. So, make sure that the contract is totally filled out before you sign it.

• Tip #2 - Ensure that you read all of the contract. Don’t skip any parts because you are in a hurry. You could miss something important. So, make sure to read it very carefully and if you don’t understand, don’t hesitate to ask for clarification.

• Tip #3 – Always make sure that you have a copy of the contract that you have signed. This way you can refer to it yourself if you need to and can make sure that nothing gets changed.

• Tip #4 – Never pay more than the down payment that you are required to pay before the work has started.

• Tip #5 – Last of all, make sure that you never pay off the rest of the work until all of the work has been done and all of the cleanup has taken place.

Before you sign the contract, it may even be a great idea to talk about the contract with your attorney. This way you can be very careful about what you sign. The last thing you want to do is to sign a binding contract that is not something you need. These are all important things that you need to remember when it comes to going over a remodeling contract and signing it. Never leave yourself in a position where you are taken advantage of and the best way to do this is to make sure that you carefully check out your contract before you ever sign it.

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Developing Remodeling Plans for Your Remodel Project

Whether you are planning on doing a bathroom remodel, remodeling your kitchen, or even some other room in your home, developing remodeling plans can be a huge help. There are so many things to be done, from finding a contractor to working with building codes. So, you have a whole lot to do when it comes to coming up with plans for the project that you want to accomplish. If you are trying to come up with the remodeling plans for your home remodeling project in the Twin Cities, here are some important things that you’ll want to keep in mind. These plans can help you make sure that the project goes very smoothly from start to finish.

Start Sketching Your Dreams

Even if you are going to be working with an architect later one, you can get started by sketching your dreams. Use your imagination to think about how you’d like the remodeled room to look. Think about how you want to make use of the room in the room. Also, consider how the new remodeling is going to affect the rest of your home. If you need some help with the sketching and visualization, consider using some home designs software at home that will help with this aspect of the remodeling planning process.

Learn From Other People First

One great way that you can make sure that you get some great inspiration for your remodeling product and avoid some of the most common mistakes is to learn from other people first. You can take the time to get online to read important articles and stories about the remodeling experiences of other people who were working on their houses. Often you can find message boards, chat rooms, and even forums where you can talk to others who have already gone through a home remodel. You can learn so much that you can use from others.

Take Time to Think Ahead

When you are working to develop your remodeling plans, you need to take the time to think ahead. Sure, you may want to add on to your home, but if you are going to sell your home and move in a year or too, it’s probably not really worth it to you. In some cases a remodel that is too luxurious may price your home far above the other homes around it, making it difficult to sell. Some remodeling projects can even take away from the value of your home. So, before you make all of your plans, make sure that you consider the future. Your needs may be changing soon too, so keep all of this in mind when making your plans for the remodel in Minnesota.

Take a Closer Look at Your Budget

Taking a closer look at your budget is a great idea as well when you want to come up with the best plans for your remodel. You want to make sure that you can do the entire project with the budget that you have. In many cases you will find that the costs of your remodel is going to be a lot more expensive than you think. Decide on the amount of money that you have to use for the remodel and then you’ll be able to figure out how to spend it. Work on planning your spending well too so that you don’t go over the amount of money that you have budgeted out. You’ll find that it is also helpful to plan on spending a bit more than you think, since many times there are last minute expenses that crop up along the way.

Choosing a Top Remodeling Team

As you develop your remodeling plans, you’ll need to choose a top remodeling team to help you out as well. While you may want to do some of the work, you may not be able to do everything for the remodel on your own. It’s important that you make sure that the team you decide to use is insured, licensed, and experienced as well.

Negotiating a Good Contract

Get bids from contractors and work on negotiating a good contract. Whether the job you need done is a simple one or one that is going to cost thousands, the last thing you want to deal with is misunderstandings along the way that will cost you. You should never allow a contractor to get started without having a good written contract in place. Everyone should agree on the work that will be done, the cost of the work, and the length of time the remodeling will take. Make sure that you make clear the materials that you don’t want used and the ones that you do want used.

Get the Permits that You’ll Need

Working with building codes is going to be part of making your remodeling plans. You’ll need to make sure that you get the permits that you need. Find out if the remodeling you will be doing is going to need some kind of building permit before you get started. It’s best to do your homework first so you avoid getting a fine.

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How to Pick a Remodeling Contractor

If you live in the state of Minnesota and you plan on having some remodeling done, you may need a good home remodeling contractor to help you out with your needs. No doubt you’ll find that there are many different contractors to choose from in the Twin Cities area, but you don’t want just any contractor working on your home. There are many different considerations that should be kept in mind when it comes to choose from all the remodeling contractors out there. So, here’s you simple checklist to keep in mind when you are trying to make sure that you get the best contractor possible for your remodeling needs.

Ask Family and Friends for Referrals

The first thing you’ll want to do is to make sure that you ask family and friends for referrals when you are trying to come up with a contractor. Getting contractor references from your friends and family members is a wonderful way that you can make sure you end up with an excellent contractor. This way you actually know someone that has had a great experience with the contractor. It helps you to be sure that you’ll get a great contractor.

Ensure They are Licensed by the State

When you are trying to pick out the best remodeling contractor, you’ll find that it is important to make sure that they are licensed by the state. They should have a state of MN contractors license that they can show you. You definitely don’t want to go with a contractor that has no license. Also, when you are looking at their license, you’ll want to make sure that there have been no complaints filed against them or any type of disciplinary actions taken against them in the past. This insures you get the best possible contractor for your remodeling project.

Check for Insurance Certificates

Make sure that you check for insurance certificates when you are trying to find the best remodel contractor. They should have General Liability as well as Workman’s Compensation. If they have no insurance, you’ll definitely want to avoid going with their services, although just having General Liability is okay.

Find Out About Their Business Longevity

Take the time to find out about their business longevity before you decide that you want to go with a particular contractor. The best option is to go with a contractor who has been in the same business with the same name for over 10 years. Five years is excellent as well. However, if they have only been in business for a year, you may want to be a bit wary of going with a brand new business when you need help with contracting. Experience is a definitely bonus when choosing remodeling contractors.

Make Sure the Business is Stable

You should also take a look at the business that the contractor is running. Is the business one that is both permanent and stable? If there is no office at all and you only get a cell phone number, this is a Minnesota contractor to reject. The best option is to find someone that has an office as well as an address. A working phone number is very important as well when it comes to making sure that the business is a stable one.

Check Out Their References

Ask for a list of client references when you are trying to find the best home remodeling contractor. If they cannot offer you any references at all, you probably will want to choose someone else. The same applies for if you call references and get negative comments. It’s best to make sure that you get at least several positive references from people who have used the same contractor in the past. This way you know what kind of a job that they are going to do.

Find Out About Their Experience

Experience is another important consideration when you are considering what type of contractor to go with. Going with a contractor that specializes in the work you need done is the best option. If the contractor doesn’t have any type of experience in the type of work that you will need to have done. Having the experience necessary is very important. You really don’t want a contractor with no experience at all working on your bathroom or kitchen. So, make sure that you choose carefully.

Take a Look at Their Bids on the Work You Need Done

Before you make your final decision on the best home remodeling contractor, you should take a look at their bids on the work you need done. Make sure that the bids have a good description of the work to be done and that they will guarantee the work that gets done. You’ll also want a contractor that only asks for about a ¼ of the money up front and then final payment when the remodeling work is finally complete.

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Establishing a Budget for Your Remodeling Costs

Today in Minnesota and elsewhere around the country, many people are beginning to give moving a second thought. Even if their homes are not quite meeting their needs, relocation at this point in time can be on the difficult side. So, because of the tight economy that you’ll find in the Twin Cities and in many other areas, more and more people are deciding that they should remodel instead of actually purchasing a new home. Whether you are planning on taking the time to design a kitchen or a new bathroom in your home, you’ll find that it’s important to make sure you come up with a good budget for the remodeling cost you are going to have to pay. The costs are remodeling are not so cheap either, so often you’ll find that a construction estimator can be of help. The following are some important tips that can help you make sure that you establish a budget for your remodeling costs that is realistic.

Decide Between What You Need and What You Want

The first thing you need to do when coming up with a good budget is to make sure that you decide between what you need and what you want in a remodel. Start out by making a couple different lists. The first list should be 10 things that you really need, and the other list should be 10 things that you really want to have. Make sure that you budget out enough money for the things that are on your “needs” list first. Then if you still have some money to work with, you can start working on purchasing things that are on the “wants” list as well. This is one of the best things that you can do to easily make sure that you keep your remodeling cost within the budget that you have for the project.

Consider Going with Alternative Materials that are Cheaper

If you are trying to stick with a budget and you want to remodel a bathroom, kitchen, or any other room in the home, then you may want to consider going with alternative materials that are cheaper. While you may have your eye on hardwood flooring or countertops made of granite, you may not be able to afford it. To cut down on spending, you can go with laminate flooring that looks just like hardwood flooring. You can also go with laminated stone countertops. They are made with bonded granite in thin slabs, yet they are much cheaper than traditional granite counter tops. You often can get the look you want by going with a cheaper material that will help you to save some money.

Do Some or All of the Work on Your Own

When it comes to remodeling costs, you can save a huge amount of money if you do some or all of the work on your own. You’ll find that there are many great sites all over the web that can provide you with the tips and step by step instructions needed to help you do the remodeling project on your own. Also, you will find that home improvement stores can help you figure out how to do some tasks by yourself. In some cases you will need a contractor, but save some money by doing some of the work.

Avoid Having to Do Any Changes to the Structure

Avoiding having to do any changes to the structure is another way that you can avoid going over your budget. When you are coming up with a budget plan, tray to make sure that you won’t have to make any changes to the structure, such as having to knock down any walls. If you have to do major changes, you may have to end up paying people like electricians or plumbers to do work that you cannot do. So, it’s a better idea to just avoid these drastic measures whenever possible. You’ll definitely be able to save a whole lot of money.

Come Up with a Plan

Come up with a plan for your budget before you get started on your remodeling project. If you have no plans to help you out, you’ll find that it is not as easy to stick with the budget that you have. When you have a good plan and you take your time, this can help you to avoid having to pay to have anything redone because of a mistake. So, make sure that you are organized and that you take your time and ensure that you have great plans.

Shop at Discount Stores for Great Deals

Shopping at discount stores for great deals is a wonderful way that you keep your remodeling costs under control as well. Many times you’ll find that you can purchase the remodeling materials that you need at discounted costs that will save you a huge amount of money. There are discount stores that can be found locally and many great discount stores to be found online as well. So, ensure you get a discount whenever you can to save the most money possible and stick to your budget.

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Bathroom Remodeling – Steps to the Perfect Bathroom Remodel

Are you considering doing some bathroom remodeling in your home? Bathrooms can get dingy and out of date quickly. Even if you want to do a bathroom remodel in the Twin Cities, you may have no idea where to begin. Well, although it will take some planning and work, coming up with bath remodeling in Minnesota, is not as difficult as you think it is. So, here are some simple steps that will help you make sure that you come up with the perfect bathroom remodel – one that everyone who sees it will admire.

Look Around for Inspiration for Your New Bathroom

If your bathroom looks like it was done a couple decades ago, then it may be time to remodel. However, you may have no idea where you should get started. So, you should spend some time looking around for some inspiration for your new bathroom. You should spend some time deciding what you want out of your bathroom, and then you will want to find inspiration from various pictures on the web or even in magazines that you use as well. Start making a style book of things that you love for your bathroom. This way you have some great ideas for what you want in the bathroom before you even get started.

Make Sure that You Carefully Plan Out Your Budget

The next thing that you’ll want to do in order to make sure you get the bathroom you want is to carefully plan out your budget. It’s very important that you take a look at your finances before you even get involved in the remodeling project. You’ll actually find that bathrooms can get really expensive, but consider the average costs as well as how long you’ll be using the bathroom. If you are going to be in the home awhile, it will be a good investment. Make sure that you know what you really need and what things you’ll have to cut out of the plans. Ensure you always consider labor costs and make sure that you over estimate so you have a cushion in your remodel budget. There are always going to be a few costs that crop up unexpectedly.

Find a Quality Contractor to Help

Usually you’ll find that you can’t do the entire bathroom remodel on your own. So, you’ll want to find a quality contractor to help you out with your bathroom remodeling project that you are wanting to get involved in. Take a look around St. Paul and Minneapolis to see what contractors are available. There are many contractors out there, but no doubt you want a quality one. So, find and then hire a great contractor that will help you get the job done for a price that is affordable to you.

Come Up with a Great Layout for Your Bathroom

Now it’s time to come up with a great layout for your bathroom. When you are trying to figure out the layout you want, remember that function is the most important thing. Sure, you want it to look great, but it’s important to think about the form. Consider where you can place things in the bathroom. Also, it’s imperative that you follow the code that is in the state of Minnesota as well to make sure that you don’t violate any part of it. Keep all of these things in mind and come up with the best possible layout for a bathroom that looks and performs in an excellent manner.

Ensure Your Bathroom Flooring is Quality

The flooring selection is going to be very important when you are remodeling your bathroom. You want to ensure that you go with bathroom flooring that is of high quality. There are many different types of flooring available to you. However, because of the uses of a bathroom, the floor choice is especially important. Bathrooms have a lot of humidity and they are also often wet as well, so you need to make sure that the flooring you choose is going to hold up under this. Some of the top options for your bathroom include tiling, laminate, special wood flooring, vinyl, and even bamboo or cork.

Go with Counter Choices that are Durable and Beautiful

When you are doing a bathroom remodel, the counter choices should be carefully made. You need to make sure that they are going to be both durable and beautiful. There are many different material options, such as marble, granite, and other types of natural stone as well. Ensure that you pick counters that are going to hold up well in a bathroom.

Pick Out a Quality Tub and Shower

Of course you’ll find that a quality tub and shower are both important as well. Today you’ll find that there are many great personalized choices to choose from. Remember that your shower and tub need to be functional, as well as beautiful.

Add Accessories and Fixtures

A variety of accessories and fixtures can be added to your bathroom to ensure that it looks great. In fact, sometimes by just adding a few new fixtures and some accessories, you can totally change the way that your bathroom looks. Many different styles of fixtures exist and you can take a look at options online or in home improvement stores. Make sure that you choose accessories that compliment the rest of the room.

Finish Up with Lighting in the Bathroom

Last of all, when you are doing your bathroom remodel in the Twin Cities suburbs, you’ll want to finish it all up with special lighting in the bathroom. Not only is the bathroom very important to the function of your bathroom, but it is also very important to how your bathroom is going to look as well. If you aren’t sure how to come up with the right lighting options for your bathroom, you may want to consider having a lighting designer help you out.

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Kitchens – Top Tips for Remodeling Your Kitchen

For those who live in the state of Minnesota, home improvement is an important topic, just like it is everywhere else in the country. Of course one of the rooms in homes that most often ends up needing a face lift is the kitchen. After all, in many homes, the living is all centered around the kitchen. If you are planning a kitchen remodel in your Twin Cities home, then you are probably interested in some kitchen remodeling ideas and tips. Here are some tops tips that will help you out when remodeling your kitchen.

Look for Some Inspiration for Your Kitchen Remodel

The first thing you’ll want to do when you are planning a kitchen renovation is to look for some inspiration for your kitchen remodel. This is one of the best and easiest ways that you can get a good start on this project. It’s extremely easy to find inspiration for your kitchen. Although it used to be that you had to spend time in home improvement stores or time collecting a variety of magazines and brochures, with the internet it’s much easier. You can easily and quickly browse through many different photos of kitchens on the web that will give you the inspiration that you need for your kitchen remodel.

Come Up with a Remodeling Plan

Making a plan is also important when it comes to remodeling a kitchen. You can choose the way you want your appliances, counters, and cabinets all laid out. It’s actually very easy to create your plans. There are even some programs, such as SmartDraw, that will help you to design your own kitchen.

Make Sure You Keep Your Budget in Mind

If you’re doing a kitchen remodel, it’s imperative that you keep your budget in mind. Make sure that you know how much money you have to work with before you begin your remodeling project. This way you can budget it out accordingly. Instead of spending 50% of your budget on cabinets that are brand new, consider refinishing the ones that you have. They’ll look great and you’ll spend a whole lot less money this way.

Use Some Paint for a New Look

In order to get a great new look, use some new paint. Believe it or not, changing the color of the kitchen walls can make a huge difference in your kitchen without you having to spend a huge amount of money. If you want a look that is cozy, reds and yellows are great choices. Light colors will help to make the room look like it is bigger, which is great for smaller spaces. Blues can make your kitchen look elegant and sophisticated as well. Of course when you are considering the right colors, make sure that you consider the rest of the elements in your kitchen as well as the general décor of your home.

Update the Kitchen Details for a New Look

To make your money go a long way while still giving your kitchen a great new look, consider updating the details in your kitchen. If you have an older kitchen, you can do a whole lot by purchasing new details, such as handles and door knobs for the kitchen that are actually updated. There are so many different options to choose from when it comes to fixtures and handles as well, which means you can get details that will go with just about any type of décor you have in mind for the remodeled kitchen.

Consider a Variety of Textures for the Counters

When it comes to kitchen designs, you should consider a variety of textures for the counters when doing a kitchen remodel in the Twin Cities suburbs. Colors and textures can both be used together to provide your kitchen with a great look. There are so many different types of textures that can be used for your counters, including marble, granite, and even wood.

Take the Lighting to a New Level

Take the lighting in your kitchen to a whole new level when you are remodeling it. Having a lot of lighting the kitchen is very important. You can used under the cabinet lights to make it easy to work in the kitchen. Recessed lighting is a great idea and you can add a few pendant lights that are task specific to make sure that you have great light in key areas as well. There are many excellent lighting choices that will allow you to have a very dramatic difference in your kitchen.

Organize and Schedule the Entire Project

When you are doing any remodeling project, such as a kitchen remodel, it’s important that you organize and schedule the entire project carefully. If you take the time to get organized and to come up with a schedule, you’ll find that the project is not near as stressful for you. Come up with a timetable for when you want certain parts of the project to be done. You can come up with tool lists, supply lists, and more to help you stay more organized throughout the entire project.

Always Keep the Big Picture in Mind

You are always going to want to keep the big picture in mind when you are doing kitchen remodeling in St. Paul or Minneapolis. When you come up with choices for the textures, colors, appliances, and more, then you can bring everything together in your mind. As you go through all the stages of a remodel, it will really help you out if you keep the entire picture in your mind.

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FHA 203K Mortgages-Light Rehab of Up to 35K in Repairs

The Federal Housing Authority or FHA also offers the 203k loan that is for light rehabilitation to a dwelling that requires $35,000 in repairs or less.  This is called the Streamline 203k loan. The Streamline 203k loan is great for buyers who may pass on a home because it needs minor repairs.  This loan is different from major rehab 203k loan and eliminates paperwork and simplifies the rehab fund process.

How it Works

The 203k Mortgage for light rehabilitation works for homes for sales as well as improvements to existing homes.  Its features include 30 year fixed or adjustable loans, 110% loan to value ratio, appraised value is given after the improvements are made to enhance the homes worth, and is great for minor rehabilitation repairs or revitalization.

You must occupy the home within 60 days after the repairs are completed and funds are disbursed to the contractor you pick in two stages.  First, a 50% materials draw is funded and when the completion of repairs is 100%, the remainder of the funds is released.

Quick Facts

The Streamline 203k minor rehab loan may be calculated into the original loan balance creating one loan.  It can be an adjustable or fixed rate and the mortgage balance can exceed the purchase price of the property.  Borrowers do not have to hire professional engineers or architects.  A home inspector or an appraiser will create a list of needed or recommended repairs or improvements and you can do the repairs yourself, or hire a contractor.

Eligible Rehab Repairs

The Streamline 203k loans is used mostly for light cosmetic repairs not exceeding $35,000 and includes roofs, gutters, and downspouts.  It may also be used for HVAC systems, electrical, plumbing, minor improvements to kitchens or bathrooms, flooring, interior and exterior painting as well as new windows and door and weather stripping and insulation.  The 203k light rehab loan encourages funds for handicap accessible improvements, energy efficient additions, removing lead paint, and the addition of decks, patios, porches, septic and well system.  A buyer may also purchase new kitchen appliances and a washer or dryer.

Ineligible Rehab Repairs

Items not eligible for the 203k Streamline light rehab loan are landscaping and yard work and major remodeling or rehabilitation to any dwelling.  It is also not for moving walls, adding rooms or fixing extensive structural damage.

What Are the Terms?

With the 203k light rehab loan, no minimum loan balance is required; however, buyers must intend to occupy the property once the light rehab repairs are complete.  The property may not be vacant for more than 30 days and all work must be completed within six months.  You do not have to hire a HUD approved contractor; however, a professional must complete your light rehab repairs.  All repairs must commence within 30 days after the closing.

Who Does the Work?

The 203k light rehab mortgage allows the buyer to select their licensed contractor and the lender will review the contractor’s experience.  The lender will get a firm estimate from the chosen contractor and buyers may even arrange to complete some of the work themselves.  If you go the do-it-yourself route, the lender will require documentation showing that you are qualified to complete the light rehab repairs.

Summary

The FHA 203k light rehab mortgage is great to make improvements to your owner-occupied home if the repairs are under $35,000.  If the repairs fall below $15,000, the lender is not usually required to perform an inspection and a letter from the borrower is sufficient along with contractor receipts as notice of completion of work.

Perspective homeowners now have the option of buying a home in need of light rehab repairs through the 203k loan, and it’s a lot less paperwork than the major rehab 203k mortgage.   The 203k Streamline line loan may also be used as a home improvement loan. If the home you are looking at needs minor rehab repairs, ask your lender about the 203k Streamline loan.

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FHA 203 K Mortgages-Full Rehab-Major Renovations

The Federal Housing Administration or FHA a division of HUD offers the 203k loan program.  This loans primary focus is the rehabilitation and repair of single-family properties or a home improvement loan.  The 203k full rehab, major renovation loan offers affordable ways to improve an existing residential home.

Quick Facts on the 203K Loan

The 203k mortgage full rehab, major renovation loan can be used for rehabilitation and/or improvement of any one-to-four unit dwelling.  It is designed to be utilized in one of three ways:
•    To purchase a dwelling and the land it sits on and revitalize or rehabilitate it.   For condos, only the interior repairs may be financed, no outside construction to the dwelling can be financed.

•    To purchase a dwelling on another site and move it onto a new foundation on the mortgage property and rehabilitate it.

•    For refinancing of existing dwelling and rehabilitating it.

To purchase a dwelling and land and to refinance indebtedness, the mortgage must be a first lien on the property and the loan proceeds must be available before the rehabilitation begins.  If moving a dwelling to another site and foundation and rehabilitating it, the mortgage must also be a first lien on the property but the loan proceeds for moving of the dwelling can’t be made available until the dwelling is attached to its new foundation.

How it all Works

With home foreclosures on the rise and lenders unwilling to finance repairs, the 203k loan allows repairs and improvements to be financed and the home may be appraised after the repairs enhancing value.

The borrow can finance all repairs, improvements and additions with the 203k rehabilitation loan and it acts as a regular loan, not a construction loan where you must find a conventional mortgage when the construction is complete.

Realtors also find the 203k rehabilitation loan effective as property listings become more attractive if the buyers are aware of the 203k loan and that it is an available option for them.

Dwellings not eligible are properties built less than a year from the time of the request for the 203k loan.  Income producing properties, non-residential, and cooperative homes are also not eligible with the exception of interior repairs or rehabilitation to a cooperative home.

The 203k rehabilitation loan is good for bathroom and kitchen remodels, removing lead paints or asbestos to meet building standards, eliminate the old or obsolescent look of the dwelling, plumbing and heating repairs, and connections to public utilities like water and sewer.  Additional eligible improvements are tile and carpeting, energy improvements, landscape, handicap accessible improvements, and roofing, gutters, downspouts, and new appliances.

Ineligible improvements for the 203k rehabilitation loan include barbeque pits, dumbwaiters, and exterior hot tubs as well as saunas, outdoor fireplaces, and swimming pools.  Satellite dishes and tennis courts are also considered to be ineligible repairs.

Where to Start

While HUD makes no loans it will work with your lender when you apply for a 203k full rehab, major renovation loan.  These loans are effective ways to revitalize a property to enhance its value or for owner-occupied homes.

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