This answer may differ from state to state so I am talking about my experience in Minnesota.  Condominiums or “condos” as they are called look a lot like an apartment.  The typical condo unit is in a building with a centralized entrance, often a security entrance.  Once you are admitted to the building, each floor of the building will have hallways with condo unit entrances off of the hallway.  A condo unit can be on the second or third or seventeenth floor of the building.  Thus, it has no land under it.  This is unusual in real estate and when condos were first introduced, it took awhile for people to accept the idea. 

When you buy a condo, you get two things.  You get private ownership interest in the condo unit and shared interest in the parts of the building and grounds that are shared with all the other homeowners.   The homeowners’ association, of which you are now a member, manages this shared property.   You can do whatever you want to your unit as long as it doesn’t impact any other homeowner and it follows association rules. 

You can’t do anything you want to the shared space unless you obtain permission from the other homeowners.  For example, you can’t change the outside of your door which faces the shared hallway.  Most homeowner associations develop a list of rules and regulations to make sure that all owners respect each other’s rights. 

Usually, the heat in a condo building is central and the costs of heat are included in your homeowner association dues.  Some other utilities might be centralized as well such as garbage removal or water and sewer services.

A townhome most typically will have its own front door.  Usually, that front door faces the outside of the building rather than an internal hallway.  It will stand on a small piece of ground or on its own small lot.  The townhome will typically have its own furnace and hot water heater so you will pay these bills and are responsible to replace these utilities when they wear out.  There still is a homeowners’ association and you still cannot make changes to the outside of the unit without association approval.   Many first-time homebuyers purchase a condo or a townhome first because they tend to be less expensive and less work than owning a single family home.

For more detailed information, come to our FREE NO OBLIGATION FIRST TIME HOMEBUYER class or wait for future blogs.  “Simple answers to home ownership questions”.

Everyone’s idea of a dream home is different.  Your idea may be influenced by the home in which you were raised.   Perhaps this is your idea of a very comfortable and cozy home.  Maybe you enjoy shopping for homes during the Parade of Homes in February and in September.  The builders’ model homes represent new trends and the most modern of building ideas.  Perhaps you are more practical and have created a list of needs you have…a yard for the kids and dog, an office for your home-based business, a large family room for your fantasy football club, a large kitchen for your gourmet cooking.

When you begin to think about buying a home, three things are important to guide your shopping.  First, find out what you can afford.  Meet with a reputable mortgage broker and get preapproved for your mortgage.  The mortgage consultant will tell you what the bank thinks you can afford.  If it’s too much house payment for you, you can scale it back.  This monthly mortgage payment can then be translated into an approximate house price which will help focus your shopping on affordable homes.

Second, decide where you want to live.  Most Home Buyers consider several things when thinking about cities that fit their needs.  They consider drive time to work, drive time to family and friends, school district quality, and shopping and recreational opportunities in the area.

Third, create a list of the things you require in your first home.  Certainly, everyone wants an attractive home but with so many options available, finding an attractive home is not a problem.  Finding a home that fits your unique life style is more of a challenge.  If you keep these three things in mind, you should be able to find a home that meets your needs and your budget.

For more detailed information, come to our FREE NO OBLIGATION FIRST TIME HOMEBUYER class or wait for future blogs.  “Simple answers to home ownership questions”.

If you are actively shopping for your first home, it’s impossible to avoid looking at foreclosed homes.  They represent almost half of the homes on the market in Minnesota.  There are four things to remember when you consider purchasing a foreclosed home:

The owner of the home is a bank.  The bank representative has never lived in the home and will not tell you anything about it.  They don’t know how old the roof is, whether the furnace has had annual service, whether there has been a water leak in the home and if everything in the home works.  In other words, you will receive no information on the home except what you discover yourself.

The personal property remaining in the home is not owned by the bank and they cannot and will not sell it to you.  If there is still a refrigerator, a stove, a microwave, a washer and a dryer, technically they belong to the original home owner and not the bank.  If the home owner chooses, they can come and remove them before closing.  If they don’t come to remove them and they “abandon” them, then you can claim them at the time you move in.

The utilities in these homes may have been disconnected without properly preparing the home.  If the heat has been turned off in the wintertime and the plumbing in the home has not been winterized and treated with antifreeze, the pipes may freeze and burst.  When spring comes and the water melts, it may cause mold to grow in the home.  These homes can cost a lot of money to repair and restore. 

There are usually one or more problems with foreclosed homes that require remedy by the buyer.  These may be big problems (burst pipes, mold, ageing roof) or these may be small problems (missing appliances, doors, kitchen cabinets etc.).  Be prepared to spend some money after closing to restore the home.

For more detailed information, come to our FREE NO OBLIGATION FIRST TIME HOMEBUYER class or wait for future blogs.  “Simple answers to home ownership questions”.

Buying a home is not like buying a car.  It’s a lot more complicated and with many more risks for you, the prospective home buyer.  We recommend attending one or more first-time home buyer classes or meeting with a Realtor or Mortgage Consultant who specializes in working with first-time home buyers. 

Your first step then is to locate a class.  Sometimes you will find classes offered through your local community education resource.  Other classes may be offered by government agencies.  Other sources of classes are Realtors and Mortgage Lenders who sponsor them.  Sometimes they will be listed in the housing or home section of your local newspaper or can be found on an information website.

Wherever you go, whatever you do, become educated on how to buy a home.  If you know about the risks ahead of time, you can avoid the most common mistakes made by home buyers.

For more detailed information, come to our FREE NO OBLIGATION FIRST TIME HOMEBUYER class or wait for future blogs.  “Simple answers to home ownership questions”.

First time home buyers, you are living in an unprecedented time.  The market is flooded with low cost housing, Congress is trying to think up incentives to lure you into buying these houses and tax breaks and incentives for home buyers abound.  Lucky you!!

However, on a less positive note, most of the zero down mortgages have disappeared from the landscape and they won’t be back for a long time.  You can probably purchase a home today with the equivalent of zero down but note that word “equivalent”.  If you qualify for some of the city, state or federally sponsored first time home buyers programs, you will collect cash either before or after closing on your new home.  In the case of the federal tax credit, you still need the cash to close to collect the credit.

If you have family or friends who are willing to help you out by gifting you money for your down payment, that could help you through the rough patch.  You could accept the “gift” and then make a promise to repay when your tax credit refund arrived.  Be sure to work with a talented and ethical mortgage consultant when purchasing a home.  These folks can track down every dollar to which you are entitled and make creative suggestions for how to bridge gaps that may arise.

For more detailed information, come to our FREE NO OBLIGATION FIRST TIME HOMEBUYER class or wait for future blogs.  “Simple answers to home ownership questions”.

This burning question is top of mind for the Buyers who attend our FREE class for first timer buyers.  We spend more than an hour teaching our students to think like a bank.  Banks want clients who will repay the loan.  They look at four risk factors concerning the Buyer and two risk factors concerning the home to be purchased.

First, you will have to give the bank information about your credit history and credit scores.  This is probably the single most important factor influencing your eligibility for a mortgage.  They look to see if you meet your debt obligations in a timely manner.  Our class goes into some detail about how to handle problems with low credit scores or no credit scores at all.

Second, you will show the bank how much money you make and how much is already obligated in monthly repayment of debt.  This is called your “debt to income ratio” and the bank has guidelines to assure you don’t take on too much debt.  In class, we review how much is o.k. and how much is too much.

Third, you will show the bank how you are going to make the down payment for your new home.  In most cases, you will need at least 3.5% of the purchase price of the home in your own money.  Some mortgages permit you to get a gift from a blood relative.

Fourth, you will tell the bank how much of the purchase price of the new home will be mortgage and how much will be down payment.  This is called “loan to value”.  The bigger your down payment, the lower the loan to value.  For example, if you make a 5% down payment, the loan to value is 95%.  If you make a 20% down payment, the loan to value is 80%.  Banks like low loan to value because you have more of your own money at risk.  You are less likely to default on the mortgage.

Once the bank checks you out, then they check out the home.  They order an appraisal to make sure the home is worth what you have offered for it.  They also have the title history on the home examined by an attorney to see who has an ownership interest in the home.  All these “owners” have to be paid off or removed from the title when you buy it.

THEN you get to buy the home.  It’s not simple.  Make sure you have good advisors when buying a home and GET INFORMED.

For more answers to your detailed questions, sign up and attend one of our FREE HOMEBUYER CLASSES!!

Buying a home is not like buying a car.  It’s a lot more complicated and with many more risks for you, the prospective home buyer.  We recommend attending one or more first time home buyer classes or meeting with a Realtor or Mortgage Consultant who specializes in working with first time home buyers. 

Your first step then is to locate a class.  Sometimes you will find classes offered through your local community education resource.  Other classes may be offered by government agencies.  Other sources of classes are Realtors and Mortgage Lenders who sponsor them.  Sometimes they will be listed in the housing or home section of your local newspaper or information website.

Wherever you go, whatever you do, become educated on how to buy a home.  If you know about the risks ahead of time, you can avoid the most common mistakes made by home buyers.

For more detailed information, come to our FREE NO OBLIGATION FIRST TIME HOMEBUYER class or wait for future blogs.  “Simple answers to home ownership questions”.