Top Six Reasons for Buying a Home During the Holidays

Buying a home at Christmas

The holidays are just around the corner. Chestnuts are roasting, and lords are leaping. It’s a busy time for most people as the events and gatherings fill up their days and evenings. In spite of how busy this time of year is, buying a home during the holidays is one commitment you may want to add to your calendar.

The holidays can be an excellent time to purchase a house. Seriously. That may come as a surprise, but buying a home at Christmas can be one of the best decisions you will make. With all the hustle and bustle of the season, it may feel like the worst time to attempt something as big as buying a home. But the savvy house hunter finds that crucial factors work in their favor over the holiday season.

Getting a home loan

If you are considering buying a home, don’t let the season stop you. The experts at TwinCity Lending have all the tools you need to get a home loan no matter the time of year. It is essential to understand the home buying process in general and make sure you set yourself up for success when buying a home during the holidays.

Home buying during this time of year creates some challenges. But it also offers fantastic benefits. You may be surprised by these six perks to house hunting in the offseason.

1. Not As Many Buyers Competing With You

Probably the most significant advantage of buying a home during the holidays is that most people don’t do it. Typically, the housing market is much brisker in the spring and summer months than it is November through January.

There are many reasons for the downturn in buyers during the winter:

  • inclement weather 
  • hectic schedules
  • travel plans
  • mid-year school changes

Whatever the reason, fewer people shop for homes during the holiday season. This slow down is great news for you if you are buying a home at Christmas. So as others busy themselves with silver bells and sleigh rides, you can take advantage of the lack of competition. You will have an excellent chance of getting into the home you want during the holidays.

2. Sellers Are Highly Motivated to Sell

Buy a home during the holidays

With fewer buyers in the market, sellers are looking to please you and woo you. Many people who put their homes up for sale during the holidays are eager for the process to happen quickly. They may want to be in a new home of their own before Christmas, making them quick to negotiate in your favor.

You are likely to get a more favorable deal on a property during the fall and winter. You would probably have to pay more if you were to buy the same home in May or June. Since these months are notoriously difficult for sellers, it may mean that they need to sell and move quickly for some reason.

While it may not be good timing for them, it could be excellent timing for you. Be sure you get preapproved for your home loan to help things move even more quickly. Your TwinCity team can help you prepare.

3. A Need for Speed

For various reasons, many people involved in real estate transactions like to finish everything before the new year begins. Sellers may need cash quickly or want to move before Christmas arrives. Buyers may want additional tax deductions for the calendar year. Real estate agents might be looking to meet a personal year-end goal.

This desire for speediness could mean a faster closing process for you. Sellers may not quibble over repairs and the sale price so that everything will move faster. 

When you work with TwinCity Lending, we can usually close within two weeks once we have your loan application and all of your documents in hand. The holiday season is a motivating time. Everyone is eager to get things done so they can move on to the festivities and family gatherings.

4. Lower prices

Isn’t everyone looking for good deals over the holidays? Black Friday, anyone? Winter months historically have the lowest property prices, so buying a home during the holidays is great for bargain hunters. And when you add motivated sellers to low home prices, you get a perfect market for eager buyers.

Save money buying a home at Christmas

In addition to lower home prices, you may find that related services are cheaper too. The holiday season is a slow time of year for painters, handymen, and movers. You may be able to find an amazing deal from someone who wants to fill their work calendar.

5. Eager Real Estate Agents

Realtors are just as eager to earn a living at Christmas as any other time of the year. Since it is a slower season for them, your agent may not have as many clients to juggle as they usually do. They will be able to give you a lot of time and attention. And they can move quickly to get you under contract on the home of your dreams.

6. Year-End Deals

Furniture, flooring, and so much more tend to go on sale at the end of the year. Stores need to clean out inventory, and they want to make you a deal. Buying a home during the holidays can mean that you can find end-of-the-year sales on everything you need for your new house.

TwinCity Is Your Lender for Buying a Home During the Holidays

Clearly, there are plenty of reasons for buying a home at Christmas. It is not always a simple decision, but the benefits of holiday home shopping are fantastic. You will have less competition and save money. It’s a great time to be a buyer.

So if your schedule allows and you don’t mind some winter weather, consider trying out the holiday real estate market. Buying a home this time of year could turn out to be one of the smartest decisions you will make. 

New home at Christmas

Your TwinCity Lending team is here to get you home for the holidays. From filling out your loan application to closing on your new house, we make sure the process is smooth and painless. Reach out today to get started.

How To Get Approved for a Home Loan as a First-Time Buyer

Home Loan

Owning a home for the first time is an exciting opportunity, but it is one you need to approach wisely. Because this is a significant financial decision, you’ll want to learn how to get approved for a home loan that’s affordable for you and your situation.

One survey shows that the median home price for first time homebuyers in the United States is $182,500. These buyers had a median down payment of 6 percent and were 32 years old, on average. With so much at stake, you want to be sure you’re buying the right home with the best loan available to you.

If you’re ready to start the home loan process, TwinCity Lending is available to help you. Contact us now for a free home loan quote.

Home Loan

Are You Financially Ready to Buy a Home?

At the heart of the process of getting approved for a home loan is understanding your overall financial health. Your lending specialist can help you with this process. But it’s best to have a clear picture of your finances already before you begin house hunting.

  • How much money can you commit to each month for a mortgage payment?
  • Are you prepared for increased costs for utilities and maintenance?
  • Have you factored in mortgage and homeowners insurance?

It’s always wise to know your credit score, too. Work to improve your score by using debt wisely and keeping the amount low. All of this helps you to show lenders you’re a good credit risk. 

What Type of Loan Programs Can Help You Qualify?

There are ways for first-time buyers to get approved for a home loan. Several mortgage programs can help support those efforts. Take a look at some options that may fit your goals.

FHA Loans

One of the most commonly used home loans for first-time homebuyers is the FHA loan. Approved lenders, such as TwinCity Lending, can help you qualify for a home loan through this federally-backed program. There are a number of benefits:

  • Lower down payment requirements – You’ll typically need just 3.5 percent of the purchase price in a down payment to secure a loan.
  • Lower closing costs – These fees are less than in conventional loans, reducing how much cash you need to close.
  • Lower credit score requirements – FHA loans can result in approval for some people even with a score of just 580.

VA Loans

Home Loan

VA loans are much like FHA loans in the benefits they offer. The difference is the U.S. Department of Veterans Affairs backs these loans for current or former members of the U.S. Armed Forces. TwinCity Lending can also help you secure these loans. VA loans typically offer:

  • No down payment requirement for most borrowers
  • Low credit score requirements
  • Lower closing costs

If you believe you would qualify for these loans, be sure to speak to your lending specialist about the options. Many borrowers will find this is an excellent way to secure a mortgage as a first-time buyer.

Tips to Help You Secure a Home Loan as a First-Time Buyer

When you meet with a mortgage broker, he or she can provide you with step-by-step information about how to get approved for a home loan. Use these tips to make the process smoother by being prepared:

#1: Seek Pre-Approval Before Looking for a Home

Bring your proof of identity, income, and expenses with you to your loan consultation. This is an opportunity to gain pre-approval, telling you how much you are likely to qualify for a home loan. If you have any concerns about qualifying, be sure to speak to your mortgage specialist about this.

This step is essential in helping you determine a budget for your house hunt. Your broker will be able to give you a good picture of the full financial commitment. Having pre-approval also gives you much better odds of a seller accepting your offer. When a seller sees that a potential buyer already has lending pre-approval, they are much more likely to agree to your offer. This piece is especially critical in hot markets.

#2: Work with a Real Estate Agent to Find the Ideal Home

While your loan is in initial processing, it’s time to find a real estate agent to be on your team. With any home loan, the property will need to pass a full inspection. Your real estate agent will be able to help you find a house that is perfect for you.

If you hope to buy a home that’s a fixer-upper, be sure to talk to your loan specialist about this opportunity. There are options available, such as a 203(k) home loan, that may help with this approval process.

#3: Answer the Underwriter’s Questions

Home Loan

During this time, you will also need to provide proof of income or verify information about the debt you already carry. You may need to provide tax returns and references to your lender, too. The sooner you respond and submit the requested information, the better. If you drag your feet in providing information or signing documents, the home loan process will take a long time.

#4: Bid on Your Home and Close Your Loan

Once you find your desired home and enter into contract, you can then move forward with the loan closing process. Closing on your home means you sign the contract for your mortgage and finalize the purchase. Be prepared that you may need to provide additional information or verify data right up until closing time.

The good news is that your lending specialist will work with you to make the entire process of getting a loan as easy as possible. Your mortgage broker is an expert in all the details. 

TwinCity Lending Is Your Premier Minneapolis Mortgage Broker

Work with our team at TwinCity Lending to learn how to get approved for your home loan. We typically can close on your home loan within two weeks of an accepted offer, as long as all documentation arrives promptly. Reach out today to get started on your first home purchase. 

To Lock or Not to Lock? Why Timing the Real Estate Market Doesn’t Work

Real Estate Market

Real Estate Market

Many people believe that there is a magic formula for timing the market when selling or buying a home. Of course, both buyers and sellers want the best possible price for their side of the transaction. And buyers definitely want the most competitive interest rate they can get.

Some homebuyers can get sucked into obsessively watching the market and interest rates. They may feel that with enough information, timing the market perfectly should be possible.

In actuality, attempting to time your leap into home buying is a lot like trying to catch a falling knife. That is, we don’t advise it. It’s nearly impossible to do and can cause more problems than it’s worth.

TwinCity Lending is your expert partner in home financing. See us when you’re ready to buy a home or want to review your mortgage. We have years of experience in the home loan market and can walk you through the purchasing or refinancing process. Your confidence is our priority throughout your home-buying experience.

Stop Chasing Unicorns

Stressing out about the timing of your home sale or purchase is common. But don’t do it. Trying to time the rise or fall of interest rates to lock in the “perfect” percentage is unrealistic. You will create a lot of work and anxiety for yourself with minimal results to show for it. 

It is much better to spend your time finding a highly-qualified broker to help you navigate the process. When planning your home purchase or sale, keep in mind that several factors  influence property prices:

  • Season – Spring and summer are busier times of the year than fall and winter in the real estate world. Most buyers and sellers want to make their moves in good weather and in between school years.
  • Home supply – When there are more properties for sale than there are buyers, home prices can drop significantly. This situation creates a buyer’s market. When the reverse is true, there are too many buyers for the inventory. Home prices go up as demand increases, creating a seller’s market.
  • The Fed -The cost of borrowing money can influence buyers’ ability to obtain home loan financing. The Federal Reserve sets the prime interest rate, and lenders reflect this in their rates. Many people get caught up in watching what the Fed is planning to do.
  • Exceptional circumstances – Situations like short sales or foreclosures can have drastic impacts on the asking price for a property.
  • Location -The adage of location, location, location has not changed. Hot markets demand higher prices. They always have, and they always will. 

Strategy Without Stress

It’s possible to create and execute a home buying or selling strategy for an excellent experience. It’s wise to have a tentative plan but also recognize that flexibility makes everything work more smoothly.

Do your homework and make sure to work with a broker you trust to get the job done right. You’ll be better prepared to pull the trigger on locking in your mortgage interest rate when a great property crosses your path.

As you launch into your property search, consider the following tips:

Research the Area

Begin now to narrow down your target neighborhoods for home shopping. Check out the schools, parks, and retail areas nearby. Research criteria that are important to you, such as walkability and job availability. Read through the comps that your real estate agent pulls for you.

Consider the home prices in comparison to your budget to help you determine the size of home you can afford. 

Speaking of Budgets, Be Sure to Create One

Visit the TwinCity Lending tools page to find several calculators that will help you determine the monthly payment you can afford. These tools use your current income, down payment, and debt ratio to give you a rough idea of the mortgage you might be able to secure.

You also can enter a range of interest rates into our calculators to see how much house you can afford as the rate changes. Or you can look at how different repayment terms will impact a loan. 

Once you have your budget set, you can start focusing on finding a great home.

Real Estate Market

Consider Buying “Off-Season”

Just like your favorite clothes, homes sometimes go “on sale” seasonally. In cold climates like Minnesota’s, it’s typically harder to sell a home in the dead of winter. Fewer people want to make a move when the snow is blowing, and the roads are slick with ice.

You might be able to take advantage of a seasonal downturn in the market when most homebuyers would rather be sitting by the fire, drinking hot chocolate. Sellers could be motivated to negotiate a lower asking price, saving you money. 

Don’t spend too much time trying to pick the perfect moment to lock in an interest rate. You could miss out on some good seasonal deals on the market.

Keep an Eye on Loan Rates, But Don’t Panic

Being watchful of loan rates is a good idea. However, don’t let a slight rise in interest rate push you into a purchase that you aren’t ready to make. Even if you end up purchasing at a higher interest rate, you’ll likely be able to refinance later on if rates drop.

Assemble Your Finance Team for Quick Action

It pays to have all your financial ducks in a row. When you know that buying a home is in your future, it’s time to do the following:

  • Don’t obsess over timing the market.
  • Start or continue saving for your down payment.
  • Meet with a mortgage specialist like the experts at TwinCity Lending to go over all of the available loan options.
  • Make sure the mortgage team you choose is trustworthy with a strong track record of client satisfaction.
  • Ask any questions you have as you begin to filter possible properties and consider making offers. 

Our team is here to assist you from loan pre-approval through closing. At TwinCity Lending, our priority is your home-buying confidence. We’ll make sure you have full knowledge of all the lending options available to you. 

We can make your home purchase a stress-free, dream-building accomplishment. Call us today and let’s get you into the home you love.

10 Top Steps to Getting Your Mortgage Approved

Family

Bob Hope once said, “A bank is a place that will lend you money if you can prove that you don’t need it.” At TwinCity Lending, we understand that you are going to need “it” to get the home of your dreams. That money usually comes in the form of a mortgage, and we are here to get you that stamp of approval in no time at all.

Contact us for all your mortgage and refinance needs. In the meantime, follow the 10 steps below to boost your approval odds when it’s time to apply for a home loan.

Business Credit Score

1. Check your credit history report and credit score.

Checking your credit score is first on the list because if there is a problem, it may not be a quick fix. Pull a current credit history report and correct any mistakes you find.

Many banks and credit cards are including a free credit score report with every statement. Some of their websites and apps have tools that will help you try out different scenarios to see how you can improve your score. However, check out the remaining steps before you get too carried away.

2.  Don’t open or close any new credit accounts.

The first thing you might be tempted to do is close old credit accounts to clean things up a bit. Closing credit card accounts is a bad move since it may raise your debt-to-credit ratio. If your next thought is, “Well then, maybe I should open a few more accounts to lower that ratio” – stop.

Opening new credit accounts can adversely affect your credit score. Hard inquiries on your credit report counteract improvements you’re trying to make. Opening accounts will do more damage to your approval odds in the short term. So hold off on that new car.

3.  Stay at your job.

Lenders usually require proof of income for two years and may not consider your income stable if you haven’t been in one position long enough.

Even if you stay within a company, don’t switch to a job that pays by commission, or lowers your salary. It doesn’t look good in the short term for a loan application. Lenders want to know that you are going to have the income moving forward to pay back the loan. 

4.  Don’t move money around.

Lenders will require at least two months of bank statements to verify all funds being used for the loan.

If you are moving money around for convenience, such as from savings to checking to pay bills, this can also be seen as a red flag. It may appear that you are depleting your down payment funds, and it creates a messy paper trail to document.

Save Money

5.  Save for your down payment.

When you know how much cash you will be able to produce at closing, then your mortgage broker can find the right loan for you. There are programs to help with down payments for qualified borrowers. But the more you can put down, the more options you will have in obtaining a mortgage. Having a sizable down payment will go a long way to getting that stamp of approval.

6. Check your budget.

Just because a lender approves you for a certain amount, doesn’t mean that is what you genuinely can afford. When you consider a monthly mortgage payment, you need to take into account:

  • The amount of the loan
  • Private mortgage insurance (PMI), which is required until you have at least 20% equity
  • Homeowner’s insurance
  • Property taxes

When calculating what you can afford, don’t overlook the last two items which often roll into escrow accounts attached to the mortgage. Use one of the many calculators on our site to help you determine what’s feasible for you.

7. Know the different types of loans.

The home loan market has a wide variety of options. Your TwinCity expert can help you navigate any of the following:

  • Conventional
    • Fannie Mae
    • 80/10/10 Piggy Back
    • HomeReadyTM
    • Freddie Mac Home Possible
    • Conventional 97
  • FHA
  • VA
  • USDA

Don’t worry.You don’t need to become a mortgage expert. It is our job at TwinCity Lending to help you with your questions and find the best solution for you.

8. Look for down payment assistance.

If the numbers still aren’t working completely in your favor, you’re not alone. According to a US News article, “61.7 percent of millennials who want to buy a home said they can’t afford a down payment.” Millennial or not, if you need help, there are options available that don’t include asking Mom and Dad.

Many of the loan types listed above can be a starting point for down payment assistance loans.

State housing finance agencies and local housing authorities can be sources for down payment grants. These grants are not just for low-income borrowers. They are for qualified wage earners that don’t have enough saved yet.

9. Get pre-approved.

In today’s housing market, you almost can’t make an offer on a home without completing this step. And pre-approval is a bit different from pre-qualification.

A letter of pre-qualification from a lender indicates that you have provided some basic information about your finances and have discussed possible loan options. It shows that the bank believes you can qualify for a loan up to a particular value, based on that information. 

Getting pre-approved, however, requires a more in-depth review of your income, assets, debts, and credit history. And all of that information has supporting documentation from you. 

This type of review carries more weight with sellers and indicates you are more serious. All the information is re-verified at closing.

Pro Tip: Continue with Steps 1-5 above up until the day of closing!

10.  Have your paperwork ready.

paperwork

Gather all the documentation you need before applying. Your mortgage broker can give you a precise list, but in general you need the following:

  • Pay stubs going back 30 days
  • W-2s going back two years
  • 1099 forms if you are self-employed
  • Proof of any bonus income
  • Documentation of any other income including dividends, stock earnings, spousal or child support, social security, or disability awards
  • Pension statements
  • Documentation of assets such as stocks, bonds, and life insurance
  • Bank statements going back 60 days
  • Tax returns going back two years
  • Proof of homeowner’s insurance

Having all this paperwork on hand will make you approval odds that much better.

Can you see that stamp of approval yet?

Follow these steps, and you will be on your way to a home loan approval. What are you waiting for? Come see us at TwinCity Lending, and start looking for that dream home right now.

Teach Your Teens How to Get a Home Loan

How

Home Loan

Having a family discussion about how to get a home loan may not rank at the top of the to-do list as a parent. But it’s a component of one of the most important talks you’ll have with your teen. 

Financial management is critical for every teenager to learn. Instilling good knowledge and skills now may help them avoid problems later. Start by sticking to the basics, and then expand their knowledge to include other topics that may apply to them.

If you’re looking for help on how to get a home loan, our team at TwinCity Lending is just a call away. Give us a call today.

Teach Your Kids About Credit First

An excellent place to start is with a solid understanding of credit. When your son or daughter reaches college and begins to use credit, you want them to make empowering decisions. Unfortunately, from 2004 through 2009, college students saw median credit card debt rise by 74 percent.

You can’t rely on schools to teach students this information, either. Only 17 states require high schools to include a course on personal finance.

Start the conversation with a definition of what credit is, why we should use it, and why we shouldn’t overuse it. Here are some points to talk about:

  • Credit is beneficial because using it wisely shows lenders that a person is a reasonable credit risk. That means they may qualify for loans in the future.
  • Talk about the burden that credit creates when we overuse it. Discuss the cost of using credit, including interest, and how that makes a simple purchase expensive.
  • Also talk about how to choose credit based on interest rates and fees, rather than the available limit.

Talk About How to Get a Home Loan and the Opportunities It Provides

Most consumers need to use a home loan to purchase a house. A great place to start this conversation is with an explanation of the down payment. Many lenders require a down payment, but a young person may have no idea what that is or how they could come up with so much cash. 

This is a great time to discuss savings vehicles that can help your children achieve this goal. You also can explain other aspects of home loans, such as insurance and interest.

What Is a Mortgage Anyway?

Be sure you also explain exactly what a mortgage is. Teach your kids that it is a lending tool for buying a home, also known as a home loan. The value of the house works as the collateral for the loan. That means if the borrower stops making payments, they can lose possession of the property. The lender owns the home until the borrower repays the loan

For older students, it can also be valuable to talk about different types of mortgages. This topic should include FHA loans and VA loans for veterans. Discuss the value of buying a home and why real estate tends to be a solid financial decision for many people. This conversation is also a great way to bring up the importance of buying versus renting a home.

Interest Rates on Home Loans

Home Loan

In your initial discussion about credit, you should be explaining how interest rates work. And it is critical to teach young people what they need to do to qualify for low interest rates later in life. They need to understand how to maintain a good credit score in the years leading up to buying a home. This conversation should include the fact that the actual amount you pay for a home is significantly higher than the sale price, due to interest amounts.

How Does Home Equity Work?

Home equity is an important topic to cover with your teens and young adults. It helps to open their eyes to how they can use credit in their favor. Home equity, which is the amount of the home’s value that is not under a mortgage, is a powerful asset. For example, some people pay off their student loans or other debts using the equity in their home. 

What makes equity so important is that it tends to build up over time. This growth builds funds that a homeowner can access for other needs. With lower interest rates and qualifications, equity can be helpful for the lifetime of owning the home. 

What Makes a Lender Offer a Home Loan to a Consumer?

Drill into your children the value and importance of good credit. Are you sensing a theme here? You can pick up an ad or browse through a real estate website with your child to see the value of various homes. That’s a big number for most teens. Why should a bank loan that enormous amount of money to a consumer to buy a home?

This conversation should include the idea of risk for the financial institution. Lenders offer loans to consumers who are a good risk. That is, they are willing to loan you the money if they feel confident you can pay it back. What makes a borrower a good risk?

  • Steady employment
  • A good credit score
  • A low debt-to-income ratio
  • Good references
  • A larger down payment

How to Pay Off Student Loans – Making the Connection

As college tuition and fees escalate, your teen may be feeling anxious about being able to afford higher education. If your child is set up for success in owning a home, they will have options for paying off student loans with their home equity.

A student loan conversation gives you the chance to talk to your teen about how to pay off any loan. They should learn that it is vital to pay more than the monthly payment and always pay on time. Learning how expensive it can be to pay off debt can help your teen see the value in keeping it in check throughout their lifetime.

You’re Not in This Process on Your Own – Let Us Help You

Whether you’re teaching your child how to get a home loan, pay down debt, or use credit, one thing is for sure. It is all critical information. And for your own lending needs, put your trust in TwinCity Lending. Contact our dedicated team to learn more about how we support you and your growing children on your financial journey.

Call TwinCity Lending now for a free mortgage review at 651-303-4236 or learn more about our services.