Forced Savings

One of the big banks has a voluntary program available that transfers $100 each month from your checking account to your savings account. In five years, the account owner would have over $5,000 because of a type of forced savings. 

Similarly, when a person buys a home with a standard amortizing loan, each month, a part of the payment is used to reduce the principal loan amount. Amazingly, over $4,000 would be applied toward the principal in the first year of a $250,000 mortgage at 4% for 30 years. In five years, the loan amount would be reduced by almost $25,000 through normal payments.

The other dynamic that is in play is that while the unpaid balance is being reduced, appreciation causes the value to increase. The difference between the two makes the equity grow even faster. Three percent appreciation on a $250,000 home would increase its value in five year by almost $40,000.

A 30-year mortgage of $250,000 will be paid for in 30 years. At an average of 3% appreciation, the asset would be worth about $600,000. If you continue to rent, the asset belongs to your landlord instead.

Many experts believe that the homeowner benefits from the forced savings of amortization and the leveraged growth that takes place in the investment. It has been observed in the tri-annual Consumer Finance Survey by the Federal Reserve Board that homeowner’s net worth is considerably higher than that of renters.

More Equity...More Options

The more equity in your home, the more options you have. Since equity is determined by the difference between value and what is owed on a property, when homes lost value during the Great Recession, homeowners’ equity decreased.

Negative equity occurs when the value is less than the mortgage owed. According to CoreLogic, 91% of all mortgaged properties have equity and only 4.4 million properties remain in negative equity at the end of the second quarter in 2015.

A homeowner, who qualifies, can release part of their equity by refinancing the existing loan and taking out additional cash or by getting a home equity loan. The benefits include:

• To get a lower rate on your current mortgage
• To finance capital improvements on your home
• To payoff higher interest rate debt such as credit cards or student loans
• To purchase items that would not have deductible interest like personal cars, boats, etc.

It could be as simple as waiting for positive home equity so owners can move to another home without having to pay out-of-pocket expenses to sell their home.

Two things everyone needs to know about plumbing

The first thing every homeowner needs to know about plumbing is how to turn the water off in case of an emergency. It’s like having a fire extinguisher; you hope you never need it but you want it just in case you do.

Generally, the cutoff is in the front of the home. There may be a separate cutoff box on the owner’s side of the meter. If not, the owner needs to be able to open the water meter and turn it off there. This will require a water meter key which can be found at a local home improvement store and a wrench. Once you have the key, practice opening the meter door and check out how the shutoff valve works. Then, put the key in a quick and easy place to find when you need it.

The second thing a homeowner needs is a recommendation of two good plumbers. Having a backup name is always good in case your first choice can’t make it when you need them.

Some homeowners prefer to go the do-it-yourself route. There are plenty of DIY videos on the Internet but having the name of a good plumber if the job gets out of hand can be the tool that saves the day.

Our business puts us in touch with some of the most reliable and reputable service providers and we’re willing to share their names with you. Regardless of whether you “do it or delegate it”, being familiar with the basics can be very helpful.

Look at a Rental This Way

Appreciation, tax advantages, cash flow, leverage and equity build-up contribute to the rate of return on rental real estate. If that sounds confusing and it’s keeping you from investing in rentals, try looking at it a different way.

Consider this, look at only cash flow and equity build-up to determine whether to buy the property. They are easy to calculate and their outcomes are both reliable and predictable.

Most homeowners, based on their familiarity with their own home, should feel more comfortable with a rental than alternative investments. A conservative strategy is to purchase slightly below average price range homes in a predominantly owner-occupied neighborhood. Collect the rent, pay the bills and make necessary repairs.

A cash on cash rate of return is determined by dividing the cash flow before taxes by the cash invested in the property. It considers all of the “real world” income and expenses related to the property.

The equity build-up occurs from the normal process of amortization with an increasingly larger portion of each payment applied to reduce the principal loan amount.

In this hypothetical example, the combination of the Cash on Cash and the Equity Build-up is almost 12% which is considerably higher than certificates of deposit and bonds and nowhere near as volatile as stocks or mutual funds.

In most of today’s markets, rents are expected to continue to rise and due to a low inventory of homes for sale coupled with growing demand, prices will continue to rise. Even though there is value in appreciation, tax advantages and leverage, they could be considered an unexpected bonus to this basic rate of return.

One-button Pricing?

An Automated Valuation Model, AVM, is a computer approach that looks at public records to make a determination based on square footage, comparable sales and other elements. It is as easy as putting your address in a blank but unfortunately, AVM results may only be accurate about 20% of the time.

A popular AVM, Zestimate®, states “It is considered a starting point at determining a home’s value.” While an AVM contains some of the same information as a comparable market analysis, it lacks a critical human factor.

Having a pair of experienced eyes consider aspects that are not easily quantified can make a big difference. A skilled professional can tell which properties are truly comparable. A knowledgeable expert can recognize features, floorplans and other things that can affect value but are difficult to quantify.

Even if a person isn’t ready to sell their investment, they like to know its value. It is easy to find the price of stocks or mutual funds on any given day but the value of a home is more difficult.

Regardless of whether you’re just curious as to how much your home is worth or are ready to monetize your equity, I’m available to give you that information without obligation. If you’re not ready now, just keep this letter for when you are.

Resource Central

Homeowners should recognize that the same trusted professional who helped them buy or sell their home can be a valuable resource while they own their home too.

Think of your REALTOR® as an indispensable homeowner’s resource who can make recommendations about a variety of services that homeowners will use throughout the tenure in their home. This experience far exceeds personal experience because of the day-to-day activities working in the industry.

• To recommend reputable and reasonable service providers.
• To offer information about your community, nearby businesses and local agencies.
• To solicit general homeowner knowledge such as protesting your property tax assessment, determining fair market value, determining the best improvements and other things.
• To assist with advice and suggestions about maintenance, protecting value and saving money.

Our goal is to have a long-term relationship with you. We want to help you be a better homeowner not only when you need to buy or sell but all of the year’s in-between. We want to earn a recommendation to your friends. We want you to consider us your REALTOR® for life.

At least consider a shorter one

Affordability and stability are reasons homebuyers choose a 30-year fixed rate mortgage. It makes the payment lower than a 15-year mortgage and the principal and interest portion of the payment will be constant for 30 years.

A common belief among homeowners for decades was that they would always have mortgage payment. The Great Recession has caused many individuals to rethink that concept and make plans to get their home paid for sooner.

For people who can afford it, shorter term mortgages will provide a lower interest rate and build equity faster. A 3.09% 15-year fixed-rate mortgage compared to a 3.87% 30-year loan will have a $562.42 higher payment.

The equity would be $66,903.04 greater on the 15-year term at the end of seven years. Even after you consider the higher payment on the shorter term, the equity difference is still almost $20,000 greater.

By choosing a 15-year loan, a borrower is committing to the higher payment for the term of the mortgage in exchange for a slightly lower interest rate. Another approach would be for the borrower to acquire a 30-year mortgage and make payments as if it were on a 15-year term. The slightly higher rate would allow the borrower the flexibility of not having to make the higher payment in the event he could not afford it on any particular month.

Discussion with your Insurance Agent

Insurance and homeowners go together like peanut butter and jelly. Lenders require fire insurance at a minimum for homes with a mortgage but many owners opt for a more comprehensive coverage with a homeowner’s policy.

However, comprehensive doesn’t mean that everything is covered. Filing a claim is not the time to learn that you don’t have the right coverage. Discuss the following issues with your insurance agent to get a better understanding of your policy and whether some adjustments might be in order.

• Flooding?
• Rising water? 
• Mold?
• Earthquakes?
• Pools?
• Termites?
• Certain kinds of pets or breeds of dogs?
• Limits on jewelry and cash?
• Deductible amount?

The whole concept behind buying insurance is to transfer the risk of loss that you cannot afford for an annual premium that you can. Price and coverage need to be considered when comparing policies. Call your agent and make sure you understand what you’re insured for and if there are alternatives available.

Homes for sale - 8740 11th Avenue S, Bloomington, MN 55420

8740 11th Avenue S Bloomington, MN 55420

Property Site: http://tour.results.net/home/ANVZP9

True One level living! (No basement) Large yard with complete privacy fence, 12x8 shed and 32x16 garden area. Pear tree in back yard produces lots of fruit! Roof replaced in 2013. Home has gutters. 2 heating systems: forced air, and hot water heat added in 2002. Home has A/C and gutters. City of Bloomington maintains sidewalk,plowing,etc. Master bath has jacuzzi tub and separate shower.In floor heat in master bedroom, bath, and kitchen! Near bus line, Mall of America, and freeways.

Bedrooms: 2

Bathrooms: 2.00

Square feet: 1,264

Price: $149,000

For more information about this property, please contact Jon Hoffmeister at (952) 942-3480 or jon@hoffmeisterhomes.com. You can also text 3166190 to 67299.

See more listings at: http://www.results.net/jon.hoffmeister

MLS ID: 4659453

Real Cost of Housing

A variety of factors have led to a shortage of rental units, especially single family homes, and as a result, rents have been steadily increasing nationwide. In most markets, it is considerably less to own than to rent.

In some cases, the total house payment is less than the rent for a similar size and condition home which supports a purchase. However, when you factor in some of the financial benefits like principal reduction, appreciation and tax savings, the difference becomes even more dramatic.

Let’s look at an example of a $250,000 home with 3.5% down payment and a 4.50% mortgage for 30 years. We’ll assume a 3% annual appreciation, 25% federal tax bracket, $1,200 annual maintenance and current rent of $2,100 a month.

The total house payment with property taxes, insurance and mortgage insurance premium would be $1,834 a month. Once the principal reduction, appreciation, tax savings and maintenance have been considered, the net cost of housing is about $673 a month. It costs a tenant over $1,400 more a month to rent than to own which would amount to $17,000 in the first year alone. That’s almost twice as much as the down payment to get into the home.

In this example, the down payment of $8,750 grows to almost $94,000 in seven years due to appreciation and amortization of the loan. Owning a home is one of the few investments available that allow these personal and financial benefits.

One of the obstacles in the past five to seven years has been a borrower’s inability to qualify for a mortgage but new programs and relaxed requirements have allowed more people to be eligible for mortgages. The important step is to talk to a trusted mortgage professional very early in the home search process. Your REALTOR® can make recommendations based on experience from actual closed transactions.

Use the Rent vs. Own calculator to see what the benefits might be in your price range.

6 Reasons for Rentals

Rental homes have several distinct advantages compared to alternative investments. These advantages coupled with the opportunity for a higher yield make it a clear choice for some investors.

1. Most investments must be paid for in cash. Stocks can be purchased with 50% cash but if the value goes down, more cash has to be used to keep the margin at 50%. Rentals can readily be financed with only 20-25% down payment.
2. Most loans made for business or investment purposes are at a floating interest rate compared to the prevalent fixed-rate mortgage on non-owner occupied real estate.
3. Terms for investment loans if possible are generally six months to a year with a possible renewal but real estate commonly has long term loans up to 30 years.
4. Real estate has a long-term history of appreciation.
5. Real estate enjoys tax advantages like long-term capital gains treatment, cost recovery and tax deferred exchanges that are not available to many other types of investments.
6. Single family homes and similar properties give the investor a reasonable amount of control to make improvements and manage the property which are limited to simply determining when to buy and sell for other investments.

The ins and outs of stocks, bonds, mutual funds, commodities and other investments are unfamiliar with most people. It is obviously possible for anyone to invest in them but the lack of knowledge about how they work could make it more difficult to have a successful outcome. On the other hand, homeowners can use their experiences to select, manage and sell with much more confidence using a single family home for rental purposes.

To find out more about investing in rental properties, contact your real estate professional.

Your Best Investment

According to a Federal Reserve report on Consumer Finances, homeowners' net worth is 36 times greater than that of renters. Building on that study, the National Association of REALTORS® believes that by the end of 2015, the factor will grow to 41 times greater.

There can be several factors that contribute to this disparity but an important one is the forced savings that is achieved due to an amortized mortgage. A portion of the payment goes to the reduction of the principal balance of the mortgage which increases equity in the home.

Appreciation is also a major contributor to homeowners’ equity. Homes, in most areas, have consistently increased in value over the long term and during the past four years have experienced solid growth. Many economists expect home prices to increase in the next five years.

Let’s look at a scenario where a qualified buyer considers three different options to see what their investment would be in five years: purchase a certificate of deposit, invest in the stock market or buy a home. The following assumptions are made: a $250,000 home with an $8,750 down payment with a 4.5% mortgage for 30 years and 3% annual appreciation; CD rate at 2% and a 5% return in the stock market.

The $8,750 would grow to $9,661 in the certificate of deposit, to $11,167 in the stock market and to $69,900 in equity with a home purchase. That is over a six times growth in the same period of time due to the amortization of the loan and the appreciation.

Check out Your Best Investment to compare possible differences in your price range.

The Cost of Co-Signing

It seems fairly innocuous; a friend or family member wants you to co-sign on a loan because they don’t qualify. They assure that they’ll make the payments; they’re quite convincing and very appreciative. You don’t want to disappoint them and after all, it’s not like it’s going to cost you anything…is it?

Think of it this way. They couldn’t get a loan unless you co-sign for them. If they don't make the payments, the lender is going to look to you to repay the loan plus late and collection fees. The lender may be able to sue you, file a lien on your home or garnish your wages.

And it’s not just money that you could be losing, it could be your credit too. Co-signing a loan is a contingent liability that could affect your debt-to-income ratio and your ability to borrow.

Co-signing is an obligation to repay the debt if the other signer is unable. You could be out the money and unable to recoup the loss because you don’t have control of the asset. The impact on your credit could take years to recover.

Before you obligate yourself, consider all of the ramifications involved in co-signing a loan for someone.

603 Portland Mews Burnsville, MN 55337

Property Site: http://tour.results.net/home/ALVEB7

This great 2 bedroom, 1 bath town home is conveniently located near all that Burnsville has to offer...major roadways, bus routes, shopping, entertainment, hospital and much more! It is situated on the corner of a cul-de-sac, and has a nice side yard. Trail access to 31 acre Wood Park, featuring a variety of recreational opportunities, is located just at the end of the building. Updates include a new front door and deck railing. The open design of this home provides a spacious living and dining area with plenty of natural light. The sliding door in the dining room provides access to the private deck overlooking the side yard. The walkout lower level has a spacious family room and the laundry/mechanical room. The lower level could easily be remodeled to add a 3rd bedroom and is roughed in for a 2nd bath.  Great opportunity to live in this high demand location!

Bedrooms: 2

Bathrooms: 1.00

Square feet: 1,302

Price: $145,000

For more information about this property, please contact Jon Hoffmeister at (952) 942-3480 or jon@hoffmeisterhomes.com. You can also text 3101393 to 67299.

See more listings at: http://www.results.net/jon.hoffmeister

MLS ID: 4651051

Finding the Best Mortgage

As rates are inching up but still very affordable, buyers should remember that there is an alternative to a fixed rate mortgage that can provide the lowest cost of housing for the homeowners who understand the parameters.

A $300,000 fixed-rate mortgage at 4% has a principal and interest payment of $1,432.25 per month for the entire 30 year term. A 5/1 adjustable mortgage at 3% has a $167.43 lower payment for the first five years and then, can adjust, up or down, based on a predetermined index.

Another interesting fact is that the unpaid balance on the ARM at the end of the first five years is $4,624 lower than the fixed-rate mortgage. The total savings in the first five years on the ARM is $14,669.00.

Adjustable rate mortgages are not the right choice for everyone but buyers should at least consider the options based on their individual situation. It could be an obvious choice for a buyer who is only going to be in the home for five years or less.

Use the ARM Comparison worksheet to see what possible savings you could have based on your actual numbers. A trusted mortgage professional can help you to understand the advantages and disadvantages based on your situation. You need the facts to make the best decision.

Homes for sale - 16354 Elm Creek Lane, Lakeville, MN 55044

16354 Elm Creek Lane Lakeville, MN 55044

Property Site: http://tour.results.net/home/LN7QJL

Excellent condition! SE corner unit provides lots of light!! Open concept design w/spacious vaulted living and dining rooms.Gas fireplace. Cherry kitchen cabinetry. Enjoy the private, east facing patio accessible from the dining area. Master br has private bath, walk-in closet, +2nd closet.Upper level laundry.Interior sprinkler systems.  Maytag Brovos XL HE top loading washer & dryer w/optional steam attachment new in 2014. New frig Dec. 2014. Bonus 13x7 storage/work area in garage!!!

Bedrooms: 3

Bathrooms: 3.00

Square feet: 1,449

Price: $175,000

For more information about this property, please contact Jon Hoffmeister at (952) 942-3480 or jon@hoffmeisterhomes.com. You can also text 3088667 to 67299.

See more listings at: http://www.results.net/jon.hoffmeister

MLS ID: 4649383

Cut Mortgage Insurance

Making additional payments toward the principal of your mortgage will do three things for the homeowner: save interest, build equity and shorten the term on fixed rate mortgages.

These things should be beneficial enough to justify the extra payments but another huge advantage is available to those who have private mortgage insurance on their loan. Mortgage insurance rates vary but can range from seventy-five to two hundred dollars a month on a $200,000 mortgage.

Lenders are required to automatically terminate mortgage insurance when the principal balance reaches 78% of the original value of the property. It is important for homeowners to monitor their balance because sometimes lenders may inadvertently fail to terminate the coverage.

Mortgage insurance is a necessary but expensive requirement for many people who are limited to a down payment of less than 20%. Eliminating the need for it can save thousands of dollars over time.

The Consumer Financial Protection Bureau, CFPB, issued a compliance bulletin on August 4, 2015.

Lower the Rate & Deduct the Interest

A home can easily be a person’s largest personal asset and it can be a powerful tool to increase financial stability also.

Since most mortgages are amortizing, the loan becomes a forced savings account that reduces the unpaid balance with each payment. The equity could be used to improve a homeowner's financial position involving other loans.

While every homeowner recognizes that they can deduct the interest paid on their mortgage, it is surprising how many don’t know that they can write-off the interest on up to $100,000 of home equity debt assuming there is sufficient equity in the home.

The real advantage to a homeowner is that the money borrowed can be used for any purpose and the interest is still deductible. Homeowners could payoff high-interest rate credit card debt or student loans with a considerably lower rate on a mortgage and deduct the interest on the home-equity debt.

Replacing debt with lower rate loans that have deductible interest can be a strategic decision to financial stability and a debt-free environment. A trusted mortgage professional can help you analyze your individual situation to determine if it would be better to refinance with a cash-out first-mortgage or a dedicated home equity loan.

Things That Kill Your Credit

Some people take their credit for granted and don’t start paying attention to it until they need it. The problem with this is that it could delay if not altogether cause the loan to be denied.

The most common issue is not correcting items on your credit report. A large majority of credit reports have errors but not all of them are critical. Since it takes time to remove them, it is a good practice to review your free credit reports from each Experian, TransUnion and Equifax once a year at www.AnnualCreditReport.com.

Another problem is making late payments. One 30-day late payment could be enough to cause a borrower to pay a higher interest rate or even be denied a loan. Payments have a due date and even when they allow a few days before a late fee kicks in, if it isn’t on-time, it is late.

Maxing out credit cards is another big problem. Ideally, a person wants to have an outstanding balance of no more than 30% of their available credit. As the percentage of available credit decreases, the credit score will go down.

Bad credit can not only keep you from getting the loan you want, it can raise your rates on the insurance you buy. In a study released by the Consumer Federation of America, people with good credit paid less than people with average and poor credit. Their results indicate that some customers with poor credit scores were charged about twice as much as those with excellent scores.

A prudent idea if you are going to be moving to a larger home is to get pre-approved with a trusted mortgage professional before you sell your current home. Occasionally, sellers find out after they’ve sold their home that they can’t qualify for another mortgage.

Checking for Water Leaks

An unexpected, larger-than-normal water bill could lead a person to think that they might have a leak. Before incurring the cost of a plumber, it is fairly easy to run your own test.

Locate your water meter. They’re usually in the front of the house, near the street. In some cases, you might need a meter key to open it; they can be purchased at Lowe’s, Home Depot or other hardware stores.

Step One - Write down the numbers on the meters to get a current reading. Don’t use any water for thirty minutes. If the meter shows water usage during the test period, proceed to step two.

Step Two - Shut off the valves to all of the toilets. If you have a pool with an automatic filler, it has a similar device. Repeat the test again for the same thirty minute period. If the numbers haven’t changed this time, it indicates that the toilets probably need servicing.

If the numbers have changed during step two, it is an indication there may be a leak and it will need to be tracked down. This could be the time to call a plumber or plumbing leak specialist. Your water department may have a consumer help line that can offer suggestions also.

More Home for a Lower Cost of Housing

What if you could live in a larger and possibly newer home for less than you are currently? Would you consider moving? Do you want to hear more?

Interest rates, while they’re expected to go up, actually took a small dip and are still hovering at the 4% or below mark for a 30 year mortgage and almost one percent less for a 15 year term.

Let’s assume that you have a $225,000 mortgage currently at 6% which has a principal and interest payment of $1,348.99. With a 4% rate, you could have a $282,561 mortgage with the same payment. A $57,000 more expensive home could help you get what you need most such as more square footage or a different location or a newer home.

If you’re going to be making that payment for years to come, why not allow lower interest rates to help you get the features you want without having to necessarily pay a higher payment. Taking that logic a little bit further, let’s see how utilities can make a difference too.

A newer home could easily have lower monthly utility costs than your current home due to being more energy efficient. Construction materials, windows, doors, insulation, modern HVAC systems and energy efficient appliances all contribute to lower utility costs. A new home with these advantages could easily save a homeowner up to 25-50% on utilities for the same size home.

The concept is simple: get the most home you can for the amount you spend on the payment and utilities. It will take some investigation and your real estate professional can help.

Get Ready for College

One of the important things as a parent is to plan for their children’s education. Let’s look at two different approaches: a savings account or investing in rental real estate.

Assuming your child is five years old and you start putting $250 a month in a savings account earning 2%, in 13 years you’d have $44,497.41 to pay for their college. Anticipating that isn’t going to be enough, you’d have to save $500 a month to end up with $88,995.

Another way would be to make a lump sum contribution of $20,000 today in a mutual fund earning 5% that would be worth $37,713 in 13 years. You’d have to make a $47,196 initial contribution to end up with the same $88,995.

An alternative to savings would be to invest in a $100,000 home in a good area. Assuming a three percent appreciation and rent of $1,000 a month, an initial investment of $23,500 could have a future wealth position of $83,838 at the end of 13 years.

Obviously, this is just an example of why rental homes are the IDEAL investment providing Income, Depreciation, Equity build-up, Appreciation and Leverage. While rentals certainly have more risk and management than a savings account, they do provide an opportunity for a higher rate of return.

If you’re concerned about paying for college tuition in the future, it is certainly worth investigating the possibility of investing in rental homes today.

Wait a Year...It Won't Matter?

There is a frequently quoted expression “more money has been lost from indecision than was ever lost from making a bad decision.” Regardless of the extent of its accuracy, most people can recall when procrastination has cost them money.

There are markets so short of inventory that buyers have become frustrated after losing bids for several homes and have decided to wait until more homes come on the market. In the meantime, the shortage of homes is driving the prices up more by the month.

There are buyers who can’t find what they want for the price they want to pay and think that waiting will somehow change things. In some cases, what they want just keeps moving farther and farther away from them.

The other dynamic in play is, of course, the mortgage rates. While they’ve remained low for several years, most experts agree that they’re going to rise; it’s just a matter of when. If you look at what positive increases in both of these would do, it becomes apparent that waiting will matter.

A $250,000 home purchased today on a FHA loan at 4% for 30 years will have a principal and interest payment of $1,151.76. If a buyer were to wait a year and the price increased 5% and the rate went up by 1%, the payment would increase by over $200 a month. In a seven year period, the increased payment alone would cost the buyer over $17,000.

Use the Cost of Waiting to Buy calculator to see how much it will matter based on the home you want to buy and what you think the prices and rates will do in the next year.

3120 Texas Avenue S Saint Louis Park, MN 55426

Property Site: http://tour.results.net/home/UWSP3S

This home, with brick accents and shutters, has great curb appeal!  It has easy access to freeways and commuting in the  Metro area. The main level living room and bedrooms have beautiful hardwood floors. There are blinds on all the windows. The spacious family room has new carpet, built-in bookshelves, a bar, & an electric fireplace with a blower for addded warmth. The lower level also features a 2nd full bath, and the laundry/mechanical room. The level back yard features a  garden and a screened porch that is  attached to the garage for outdoor enjoyment. The upper level bedroom has a supplemental window A/C unit. The home also features Leaf Guard gutters. A one-year home warranty will be provided for the buyer of this property! 

Bedrooms: 3

Bathrooms: 2.00

Square feet: 1,545

Price: $239,000

For more information about this property, please contact Jon Hoffmeister at (952) 942-3480 or jon@hoffmeisterhomes.com. You can also text 2979013 to 67299.

See more listings at: http://www.results.net/jon.hoffmeister

MLS ID: 4629682

Who is Your Champion?

The Super Bowl and World Series determine the football and baseball champions. Since there can only be one champion, the other team loses the competition. In feudal times, a knight might champion for the king or a patriotic, romantic or religious cause.

Fierce competition can occur when buying or selling a home because each party wants to get the “best deal” possible. When the buyer and seller are not equally matched, and they rarely are, it is important to have a champion on your side to fight for your cause.

The price of the home, the type of financing and concessions, personal property, closing dates and possession are just a few of the many things that can be negotiated in a contract. Since the seller wants to get the most for their house and the buyer wants to pay the least, their causes are diametrically opposed.

Even after the contract is signed, removing the contingencies can cause considerable negotiations. The inspections or the appraisal could be the source of reevaluating the terms and provisions of the contract.

Negotiating the sale or purchase of a home is definitely a competition and you need a champion on your side.

Homes for sale - 4212 N River Run, Savage, MN 55378

Homes for sale - 4212 N River Run, Savage, MN 55378

4212 N River Run Savage, MN 55378

Property Site: http://tour.results.net/home/MA8KDD

This beautiful 4-level home is situated on a gorgeous wooded lot bordering the Credit River.  There are no homes behind the property, so you can enjoy privacy and wooded views from the deck or patio. The back yard landscaping includes two boulder walls.

The home’s exterior entry is covered for protection from the weather.  As you enter the home, the sizable foyer and the open design concept will impress you.

The vaulted ceilings in the living, dining, and kitchen areas, in addition to the open hallway on the upper level, add to the feeling of space.  

The kitchen has a substantial amount of cabinetry for storage, and plenty of counter space as well. It also features a bay window, desk, huge pantry, slide out shelving, quartz countertops, ceramic backsplash, stainless steel appliances, and ceramic tile flooring.

The master bedroom has windows on 3 sides of the room to enjoy the treetop views. The private ¾ bath features a separate room for the shower and stool. A walk-in closet is an additional bonus! There are two additional bedrooms on the upper level.

The family room in the lower level features a wood-burning fireplace with a beautiful brick surround and oak mantle. A sliding door provides access to the patio and back yard.  This level also features another ¾ bath and a laundry room.

The laundry room has 2 closets for an abundance of storage space. A window lets natural light into the room.

The home has an abundant amount of storage space, with linen closets for each bathroom, and several of the rooms feature 2 closets.

The 4th level amusement room is a great space for playing games, and would also make a great theater room. The unfinished mechanical room on this same level offers a great place for a workshop or additional storage space.

 

This home is conveniently located close to great parks and shopping, with easy freeway access.

 

This one-owner home is in excellent condition, and has been meticulously maintained, with major updates already completed.

 

Major updates include:

2012- roof

2011-lower patio door

2010-furnace and air conditioner

2008-2011 most windows replaced

2007-new garage door

2007- landscaping in back yard

2007-hot water heater

2006 -water softener

2004-2006-kitchen remodel

Bedrooms: 4

Bathrooms: 3.00

Square feet: 2,933

Price: $295,000

For more information about this property, please contact Jon Hoffmeister at (952) 942-3480 or jon@hoffmeisterhomes.com. You can also text 2955810 to 67299.

See more listings at: http://www.results.net/jon.hoffmeister

MLS ID: 4629686

It's Hard to Imagine

With mortgage rates below 5% since 2009, you’d think any homeowner who should refinance would have already. However, it is estimated, there are approximately 6.5 million borrowers who would benefit with significant monthly savings by refinancing.

Rodney Anderson of Supreme Lending, on his weekly radio program, described a recent pipeline meeting where they reviewed every pending mortgage application his company was processing. They had seven refinancing applicants whose current mortgage was over 9% and twelve with a rate between 7% and 9%.

“Some 550,000 American homeowners with a mortgage could save $500 or more each month by refinancing at today’s rates. Over three million could save at least $200 per month.” said Ben Graboske, CTO with Black Knight Financial Services.

Getting a lower interest rate should be reason enough but eliminating the mortgage insurance should make the decision a no brainer. With increased home values, the loan-to-value ratio may no longer require mortgage insurance which would add additional savings.

Homeowners need solid information about what their home is worth and whether they’d benefit from refinancing. The most reliable solution is to talk with a qualified mortgage professional. The internet is a great place for generalized info but each person’s situation is unique. Call if you'd like a recommendation of a trusted mortgage professional or would like to know what your home is worth.

What's Stopping You?

The majority of tenants say they’d like to own a home but continue to pay rent and missing out on financial and emotional advantages. There seems to still be a lot of misinformation in the marketplace.

There are a number of programs for low or no down payment options. Veterans can get into a home with no down payment or closing costs. In qualifying areas, USDA has zero down payment programs. FHA requires 3.5% down payment and there are conventional programs for as little as 3% and 5% down.

People with credit issues need expert opinions about their specific situation. Borrowers with bankruptcies or foreclosures may be eligible to purchase again after certain periods of time. There are short-term fixes for some types of credit problems. There is an extended list of individual issues that a skilled mortgage professional may be able to overcome.

Most tenants realize considerably lower cost of housing by owning once the appreciation, amortization and tax savings are considered. The savings in the first year alone could easily be more than the down payment required.

Plug in your own numbers in a Rent vs. Own to see what your real cost of housing may be. Contact us for a recommendation of a mortgage professional who can give you accurate information about your situation.

Homes for sale - 119 Hazelwood Avenue, Cologne, MN 55322

9435 178th Street W Lakeville, MN 55044

9435 178th Street W Lakeville, MN 55044

9435 178th Street W Lakeville, MN 55044

Property Site: http://tour.remax-northcentral.com/home/TBX22H

Directions Ipava Ave, to 178th Street W the home is on the right.

Bedrooms: 4

Bathrooms: 2.00

Square feet: 1,942

Price: $1,850

For more information about this property, please contact Jon Hoffmeister at (952) 942-3480 or jon@hoffmeisterhomes.com. You can also text 2922687 to 67299.

See more listings at: http://www.results.net/jon.hoffmeister

MLS ID: 4624511

Build Equity Faster

Equity is an asset and an appreciating home is an investment. While some people have resolved themselves that a mortgage payment is a normal part of life, others have set goals to get their home paid for as soon as possible. There are several strategies that will work but they all require persistent vigilance.

A shorter term mortgage such as 20, 15 or even 10 years will not only pay off sooner, it will generally have a lower interest rate. A recent comparison at Freddie Mac’s Primary Mortgage Market Survey showed a 30 year fixed-rate mortgage at 4.04% compared to a 15 year fixed-rate at 3.20%. The fees for the shorter term were even .1% less. The shorter term with the lower rate would have a higher payment but some people consider it forced savings.

Additional principal contributions to any length fixed-rate mortgage will save interest, build equity and shorten the term of the loan. Some homeowners may apply lump sums at various times during the year such as when bonuses are paid or a tax refund is received.

Other owners might increase their payment by $100, $200 or more each month. Setting the increased payment through electronic banking would insure that you consistently make the extra amount.

Bi-weekly payments make 26 half-payments in a year which equals 13 full-payments. Because of the frequency, it reduces the interest that is due. This might work well for borrowers who are paid every two weeks but could present cash flow problems for those who are paid on schedules that don’t coincide.

Making one extra payment a year will have almost the same effect as a bi-weekly payment. The 13th payment would be completely applied to principal.

Before embarking on one of these strategies, it would be wise to verify with your lender that it complies with their policies. Check out the Equity Accelerator to see how it could affect your loan.

Homes for sale - 119 Hazelwood Avenue, Cologne, MN 55322

119 Hazelwood Avenue Cologne, MN 55322

Property Site: http://tour.remax-northcentral.com/home/TA4ATL

This 4-level home has great curb appeal, fantastic views, and plenty of space! The main living, dining, and kitchen area has vaulted ceilings for a spacious feel. There are 3 bedrooms and 2 baths on the upper level, and 2 newly finished rooms on the 4th level. The entry level is home to the family room, laundry room, and a 3/4 bath. A 3-car garage and maintenance-free  exterior are additional features!   A one-year home warranty is provided for the buyer of this home.

Bedrooms: 4

Bathrooms: 3.00

Square feet: 1,978

Price: $248,800

For more information about this property, please contact Jon Hoffmeister at (952) 942-3480 or jon@hoffmeisterhomes.com. You can also text 2919486 to 67299.

See more listings at: http://www.results.net/jon.hoffmeister

MLS ID: 4623849

Homes for sale - 13690 Theresa Place, Eden Prairie, MN 55346

13690 Theresa Place Eden Prairie, MN 55346

Property Site: http://tour.remax-northcentral.com/home/NQ93A4

Fantastic home with lots of space! Great flat yard, large deck. Paver driveway and sidewalk. Main flr laundry. Newer windows., Directions Baker Road (County 60), west on Theresa Place and the home will be on your right.

Bedrooms: 4

Bathrooms: 4.00

Square feet: 2,930

Price: $365,000

For more information about this property, please contact Jon Hoffmeister at (952) 942-3480 or jon@hoffmeisterhomes.com. You can also text 2905580 to 67299.

See more listings at: http://www.results.net/jon.hoffmeister

MLS ID: 4621944

Three M's of Homeownership

Among the many reasons people have to own home, they include having a place of their own, to raise a family and to share with friends. Additional benefits include security, investment, peace, pride and enjoyment.

Together with the benefits come the responsibility to take care of the home for its livability and viability as a sound decision. A homeowner’s concerns can be broken down into three areas.

The maintenance on the property is something that every homeowner deals with. Changing filters are easy to handle yourself. Other things might require a skilled professional but identifying the “right” one can be challenging.

Minimizing expenses can reduce the cost of living in the home. It’s good to recognize when a repair is appropriate compared to a replacement. Reputable and reasonable service providers are key to keeping expense low.

Managing debt and risk becomes the financial side of the effort. Taking advantage of low interest rates or shorter terms for refinancing, making additional principal contributions are just a few ways to manage debt. Home warranty programs and homeowner insurance tips can reduce risk.

We sincerely want to be a resource for you not only when you buy or sell but all of the years in between. It is actually the reason we send this newsletter to you.

Homes for sale - 5510 River Bluff Drive, Bloomington, MN 55437

Grilling Safety

More people grill in July than any other month. While grilling is all about good food, fun, friends and celebrations, it is important to make sure that accidents don’t interrupt your activities. Approximately half of the injuries involving grills are thermal burns. If you work with fire, there’s a chance of getting burned.

• Only use BBQ grills outdoors and in ventilated areas.
• Place the grill away from home or anything that could be flammable. 
• Keep grill stable.
• Keep fire under control.
• Keep children away from grill.
• Never leave the grill unattended.
• The grill lid should always be open before lighting it.
• Grease should not be allowed to build up in the grill. 
• Use long-handled utensils.
  
  Gas/Propane
• Check the tank hose and connections for leaks before using it for the first time each year by using a light soapy water solution to see if bubbles appear.
• If you smell gas when the grill is lit, move away from the grill and call the fire department.
• If the flame goes out, turn off the gas for 15 minutes and open the lid before re-lighting it.
  
  Charcoal
• Never add any starter fluid or other flammable liquid to a fire.
• Only use charcoal starter fluid and not gasoline, kerosene or other flammable liquid.
• Keep starter fluid away from heat sources and out of reach of children.
• Electric charcoal starters do not use fire but have a coil to ignite the coals.
• When finished cooking, close off the grill vents to suffocate the fire and save some of the remaining charcoal.

 Practice safe grilling and enjoy the occasions to cook outdoors and share with your family and friends.

3849 Windcrest Court Eagan, MN 55123

Property Site: http://tour.remax-northcentral.com/home/EFYU3E

This light-filled home is perfectly located close to all that Eagan has to offer, including Cascade Bay Water Park, the library, and the ice arena! There's also plenty of shopping and dining nearby and major roadways are very accessible!

There is a large green space with trees at one end of the building for privacy and room to play.

Vaulted ceilings in the living, kitchen, and dining area give this home a spacious feel, and the space is filled with natural light from the large front window and the sliding glass door, which provides access to the deck.

The master bedroom features a walk-in closet and a pass through bath.

The walk-out lower level has a spacious family room, which is open to the office area. The sliding door opens out to a patio and side yard. The laundry/mechanical room is also on the lower level.

A one-year HMS Home Warranty is included for the buyer of this fantastic home.

Bedrooms: 2

Bathrooms: 2.00

Square feet: 1,513

Price: $164,900

For more information about this property, please contact Jon Hoffmeister at (952) 942-3480 or jon@hoffmeisterhomes.com. You can also text 2882072 to 67299.

See more listings at: http://www.results.net/jon.hoffmeister

MLS ID: 4618065

16682 Hudson Avenue Lakeville, MN 55044

Property Site: http://tour.remax-northcentral.com/home/3HQSSF

This immaculate home has an open design with vaulted ceilings for a very spacious feeling. The home is filled with natural light, adding to it's wonderful ambiance. The living, dining, and kitchen area was renovated in 2014, and features hardwood flooring. The kitchen features stainless steel appliances, Silestone countertops, and subway tile backsplash. The sliding door in the dining area walks out to a sizable deck overlooking the large back yard. Beautiful stone tile is the feature of  the large foyer. On the upper level there are three bedrooms, all with built-in closet organizers. The master bedroom has a makeup vanity, and a walk-in closet. The beautiful pass-through bath has stone tile flooring and a new vanity with Silestone vanity top. The combination of subway and glass tile throughout the bathroom is stunning! The lower level features a very large family room, a finished laundry room, and a 3/4 bath. Other updates include a new garage door (2009),roof (2010), water softener (2013), and insulation added to the roof. This home has easy access to major roadways, and is conveniently located near schools, parks, trails, and shopping. A one-year home warranty is provided for the buyer of this fantastic home!

Bedrooms: 3

Bathrooms: 2.00

Square feet: 1,878

Price: $264,900

For more information about this property, please contact Jon Hoffmeister at (952) 942-3480 or jon@hoffmeisterhomes.com. You can also text 2879876 to 67299.

See more listings at: http://www.results.net/jon.hoffmeister

MLS ID: 4617347

Eliminate Mortgage Insurance

Why would you consider refinancing if your mortgage is only two or three years old and the rate is not considerably higher than what is currently available on new loans? Because you may be able to eliminate the mortgage insurance and have significant monthly savings.

Many homes have seen their values rise in the past few years. The current loan-to-value ratio may be low enough to no longer require mortgage insurance. In some cases, a homeowner might actually pay a little higher rate than they currently have but lower their monthly payment dramatically because the mortgage insurance isn’t required.

A rough rule of thumb is that mortgage insurance is not needed on loans at or less than 80% of value. There could be programs available that would allow a higher LTV than 80%.

Careful consideration should also be given to the fees required to refinance. Lenders differ in not only the rates they charge but also the fees associated with the loans and the process. If you’d like a recommendation of a trusted mortgage professional, we’d be happy to make a recommendation.

Monthly Skinny: June

Where Are the Sellers?

Low inventories resulting in multiple offers are contributing to what experienced agents are calling the most challenging market they’ve ever worked. While buyers with resources may find the market difficult, purchasers with minimum cash and credit are struggling to find and get into a home.

First-time buyers feel the impetus to purchase because they’re renting and are concerned about being priced out of the market with rapidly appreciating prices and rising interest rates.

Sellers may not feel the same urgency because they already own a home. While they might find it appealing to change homes, they may not feel a pressing motivation causing them to act.

In some cases, sellers are so attached to their low interest rate mortgage that instead of selling, they’re keeping the home for a rental property. This may be a good investment for people with additional cash resources for the down payment and closing costs on the replacement property.

Why now is a good time to sell:

1. The economy is strong.
2. The majority of home sales occur in the months of May through September.
3. Many buyers find it preferable to move in the summer because their children are out of school and they can avoid the winter weather.
4. Mortgage rates are still very low but are starting to rise.
5. Current low inventories in most markets result in higher prices and less competition.

Contact your real estate professional to evaluate the opportunities of making a move.

Homes for sale - 9629 Little Road, Bloomington, MN 55437

9629 Little Road Bloomington, MN 55437

Property Site: http://tour.remax-northcentral.com/home/TMCTTQ

Desirable West Bloomington location! New roof 2013.Private 3/4 master bath. 3 bedrs on main level, 1 down. Wainscoting and wide base trim. Vaulted and beamed ceiling in living,dining, kitchen. 2 skylights in kitchen. Paver patios & walkway. Private yard., Directions France Ave to 98th Street West, west 0.3 miles to Little Road, north to property.

Bedrooms: 4

Bathrooms: 3.00

Square feet: 2,366

Price: $329,900

For more information about this property, please contact Jon Hoffmeister at (952) 942-3480 or jon@hoffmeisterhomes.com. You can also text 2849417 to 67299.

See more listings at: http://www.results.net/jon.hoffmeister

MLS ID: 4611695

Take Pictures Now

Preserve the memories you’re making by taking photographs of your home now. The pictures will remind you of the role your home played with your family and life.

Reminiscing is easier when scrolling through pictures to remind you of people and times. One of the least heard regrets is that we should have taken more pictures.

Shots to consider:

• The front of the home from across the street    
• Times when your yard and plants looked exceptional
• Holiday decorations
• Special occasions in the homes like birthdays, anniversaries, graduations, etc.
  Home improvements
• Major purchases for the home
• Times when the home looked the best and the worst
• Family, friends and pets in the home
• Your children’s height marks on a door frame
• The view from a favorite window

From an organizational standpoint, put the pictures in a folder with your address as the name. Even if you don’t take time to name each picture, you’ll have the file date to identify when it was taken. Since the cost of film and processing has disappeared, there is little reason not to chronicle your life in pictures.

5104 Bloomington Ave S, Minneapolis MN 55417, USA - Virtual Tour

5104 Bloomington Ave S, Minneapolis MN 55417, USA - Virtual Tour

Homes for sale - 5641 126th Street W, Apple Valley, MN 55124

5641 126th Street W Apple Valley, MN 55124

Property Site: http://tour.remax-northcentral.com/home/LHGK9S

This multi-level design provides flexibility & separation of spaces. This row-style town home has windows at the front and back. Vaulted ceilings create an open feel, and a skylight allows extra light in the kitchen. LL has fam rm, 3/4 bath and laundry rm, Directions Hwy 13 to Lynn Ave, S to 126th St to home

Bedrooms: 2

Bathrooms: 2.00

Square feet: 2,539

Price: $159,900

For more information about this property, please contact Jon Hoffmeister at (952) 942-3480 or jon@hoffmeisterhomes.com. You can also text 2827075 to 67299.

See more listings at: http://www.results.net/jon.hoffmeister

MLS ID: 4607937

Make Your Offer Standout

If a seller was looking at two offers for exactly the same price on their home, there would still be things that could make one standout more than the other. If there happens to be more than two offers, things can really get sticky for a buyer. For that reason, it is good to craft the most attractive offer possible because even if you don’t have competition now, another offer could come in during negotiations and derail all your efforts to that point.

Anything that can give the seller the peace of mind that one contract will close on time and as agreed will make them more comfortable in accepting one offer over another. Buyers can consider putting up larger than customary amounts of earnest money and limiting the contingencies to only the most essential items.

The closing costs could be more expensive to the seller based on the type of mortgage a buyer is obtaining. One buyer may be asking the seller to pay part or all of their acquisition costs and the other buyer is paying their own costs.

The borrower who has a signed, preapproval letter will appear to have a greater certainty to closing than a buyer who only says they have talked to a loan officer. Some lenders' letters are considered “gold” and others may not be worth the paper they’re written on. The seller will depend on their listing agent to advise them.

In most cases, the seller will be taking all or part of the cash they receive from the sale of their home and buying another one. If they have to put a contingency clause in the contract based on their current home selling, it weakens their position. Conversely, it will strengthen a buyer’s position if they don’t have to make their offer contingent upon selling their current home.

Even shortening the inspection periods and offering to close early or possible lease the home back to the seller for a short time can be valuable negotiating factors.

Finally, don’t overlook the value of a personal hand-written letter that tells the seller why you want their home. An emotional connection has been known to make a difference for one set of buyers getting the home.

740 7th Street N Montrose, MN 55363

Property Site: http://tour.remax-northcentral.com/home/QQENHX

Spacious eat-in kitchen with large 3x5 island. Vaulted kitchen, dining, living/ area. Walk-in closets in both bedrooms. Maintenance free siding and windows.Huge open green space beyond property lines with pond, wetland, and park for great views!, Directions HWy 12 to cty rd 12 north to left on 7th St N and the home is on the left

Bedrooms: 2

Bathrooms: 1.00

Square feet: 1,091

Price: $145,000

For more information about this property, please contact Jon Hoffmeister at (952) 942-3480 or jon@hoffmeisterhomes.com. You can also text 2824194 to 67299.

See more listings at: http://www.results.net/jon.hoffmeister

MLS ID: 4607292