home financing

Tips to Find Money for Your Down Payment

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Buying a home sometimes seems impossible. For starters, how do you come up with money for a down payment? Should you get first time home buyer down payment assistance? And what does that even mean? Well, let’s get into the details.

If you don’t own your own home now, let’s say you’re leasing an expensive place in the ever-popular Austin, Texas, then you’re probably paying rent to someone. In many cases, that rent payment would probably be the same as a home mortgage payment; the only problem is, you usually need a down payment in order to qualify for a mortgage. Some reasons for this are:

  • It protects the lender. If you default, at least they have received some cash.
  • It shows you will be motivated to pay the mortgage because you have skin in the game.
  • It shows that you can save money while at the same time paying your bills.

Even if you are buying a home using an FHA mortgage, you’ll still have to come up with at least three percent of the purchase price, and with a $350,000 home, this can still be over $10,000. So how do you go from zero to $10,000 relatively quickly? What first time homebuyer down payment assistance is available?

first time home buyer down payment assistance

First Time Home Buyer Down Payment Assistance Gifts

It is completely legal for someone to gift you your down payment assistance for first time home buyers, and the way tax laws work, relatives can give you up to $15,000 tax free. They could also give that amount to your spouse, so taxes are not an issue. If you do use gift money for a down payment, the lender is going to want to track it, so make sure that this transaction is completely transparent.

Consistently Save and Start Early

Just as interest compounds on credit cards and student loans (advice here if you need help with those overbearing student loans), the magic of compounding works the other way also. Save $100 per month at an average rate of four percent, and you will have $14,983.62 at the end of ten years. So, if you start saving when you are 16 years old, you’ll have a nice down payment at age 26 and you won’t be looking for first time homebuyer down payment assistance.

There are also many sites out there, much like our friends at the Saving Expert, that will help you get your finances on track. And don’t forget about that side hustle; online jobs can be a huge help!

Compound Interest

Loans

Check out what the State of Minnesota has to say about first time homebuyer down payment assistance:

“When you get a Minnesota Housing mortgage, you can also receive an optional down payment and closing cost loan up to $15,000. Down payment and closing cost loans are only available when you get a Minnesota Housing first mortgage loan and additional eligibility requirements may apply, including income limits.”

Other states have similar programs also.

Tap Your IRA

If you have a substantial IRA, it may be worth it to withdraw funds. Our friends at nerdwallet.com tell us:

“IRA withdrawals for home purchases are allowed, up to $10,000. Roth withdrawals are tax-free and without penalty if you’ve had the account for at least five years. Tapping a traditional IRA will trigger income taxes.”

Crowdfund It

Have a good story? Set up a Kickstarter or GoFundMe site and see if you can reach your goal. Again, the lender will of course want to track your down payment dollars, so make sure everything is easily documentable.

Real Estate Crowdfunding

Down payments may seem daunting, but with planning and diligence, you should be able to raise the funds to get you on the path toward home ownership.

Mortgage Loan Denial: Is This A Racial Problem?

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So, you need a down payment on a house, but you do not have handfuls and handfuls of cash to make it happen. A mortgage loan can help with that, but what if you can’t get one?

Well, many persons think that race and ethnicity are major factors in mortgage loan denials, and the following chart backs this up:

Down Payment on a House - Mortgage Denial

Others, however, feel that observed denial rates do not give the true picture, and that what is called “real” denial rates paint a truer picture:

Mortgage Denial Reporting

According to Urban Wire, “the real denial rate is still a blunt tool, because it requires the simplification of complex data and trends. It considers credit scores, loan-to-value ratios, debt-to-income ratios (DTI), and product and documentation types, but it does not consider income or income variability (we only have access to DTI; the lender will have more detailed financial information).”

Mortgage Loan Denial: Racial Profiling?

Statistics can be molded to show whatever authors want them to show, and both charts seem to portray that more minorities are denied mortgages than whites. Of course, there could be many reasons for this, and the raw data just does not tell us what that is.

Some think, however, that if a person of color walks into a mortgage lender’s office—even if they have a down payment on a house–the would-be borrower is automatically subjected to a higher level of scrutiny that then causes them to become credit denied. While this can be possible, these anomalies don’t guide the way we do business at C4D.

Down Payment on a House: We Can Help

Whether you are Asian, white, black, Hispanic or a Native American, we just don’t care. We know that good people can simply have bad credit problems. We understand that your credit rating may have been injured because:

  • You lost a job within the last year.
  • You have a lot of student loan debt.
  • Your credit cards are maxed out.
  • You got a divorce.
  • You owe taxes to the state.
  • You have legal judgments against you.
  • You declared Chapter 13 or Chapter 7 bankruptcy.
  • You defaulted on a personal loan.
  • You faced foreclosure.
  • You don’t have a large enough down payment on a house.

There can be many other reasons that you may not qualify for traditional financing, but we at C4D are here to help you. We utilize a very innovative program called MN contract for deed. It works like this:

  • You find a house.
  • We buy it.
  • We sell it to you on a MN contract for deed basis.
  • We keep the deed until you make all of your payments.

Yes, you still will need a down payment on a home, but we consider things that a bank does not.

Our Process to Help with Your Down Payment on a House

Down Payment Assistance

Fill out our online application, and we will evaluate your situation. If there is any way we can help you, we will first talk on the phone, and then we will get together personally. We do work with a local bank, and the bank respects our judgment. If we can make a good case that you have a down payment on a house and that you will be able to make the payments, we do everything possible to get the deal done.

We have said it before:  We love traditional financing and wish that everyone could get a standard mortgage. If you can’t, however, don’t give up. Talk to us today!

Signs of a bad realtor

7 Things Real Estate Agents Must Do For Sellers

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You need to be able to spot the signs of a bad Realtor when you see them. It’s a must!

Signs of a bad realtor

You can be paying big money to your listing broker when your home sells. If your property goes for $400,000, brokers could get $24,000. Sure, the listing broker will share commissions with the buyer’s agent, but still, that’s a lot of money. Because your Realtor is going to handsomely profit from his or her work, you can expect your agent to do the following.

Signs of a Bad Realtor #1: Doesn’t Correctly Price the Home

Your agent needs to have total local market knowledge and needs to know the price range where your home will sell. There is nothing worse than riding down the market as buyers wait for you to continually lower the listing amount of your over-priced home. Don’t think that Joe Smith—the guy that sold grandma’s condo in the suburbs—is automatically going to know how much your downtown unit is worth, unless he can prove that he understands your local market.

Signs of a Bad Realtor #2: Doesn’t Do A Great Marketing Job

Your expert should not be showing signs of a bad Realtor. Instead, they should use every available too to sell your home. Facebook, MLS of course, Craigslist, his or her network of brokers, Pinterest and any other Internet based platforms need to be used. Any postings and listings must be accompanied by great photos and excellent descriptions. If you have already moved, and your property is vacant, your agent needs to help you with staging. Signs of a bad realtor would include an agent that seems lazy and not Internet savvy.

Signs of a Bad Realtor #3: Does NOT Properly Communicate

Sellers are naturally hyper, and a good Realtor will inform them of his or her availability and communication preferences. If you aren’t presented with something like this right away, you maybe should look for another agent:

“I am available seven days a week by email, phone and/or text. If you contact me before 4:00 p.m., I promise to return your inquiry within four hours. If you contact me after 4:00 p.m., I will be in touch by noon the next day.”

Signs of a bad Realtor would be an agent that doesn’t return calls for days.

Signs of a Bad Realtor #4: Doesn’t Ensure That the Buyer is Qualified

DIY home sellers often make the rookie mistake of taking an offer without vetting the buyer. This can tie up a property for 30 days or more. Your agent needs to make sure that all offers to be considered are from bank pre-qualified buyers, or those that can show they have cash.

For Sale Sign

Signs of a Bad Realtor #5: Poor Negotiation Skills

Think about it — if you and the buyer are $5000 apart on a $400,000 transaction, that $5000 only means an additional $300 in commission for the brokers. The brokers, at that point, may just want to get the deal done and collect their $24,000 commission, and they would probably sacrifice $300 to be able to move on. You, on the other hand, may need that $5000, and a good broker will represent your interest, not his or hers.

Commission Breakdown

Signs of a bad Realtor would be an agent that puts pressure on you to quickly agree to a lower offer.

Signs of a Bad Realtor #6: Doesn’t Attend the Home Inspection

The home inspection carries a lot of weight, and you need to be represented at the inspection. That way, you’ll know what the inspector sees as problems before he sends his report to the buyer. It is better to be surprised early than at the last minute.

Signs of a Bad Realtor #7: Can’t Finalize Loose Ends for Closing

Hearing the words “clear to close” is a great thing, and your agent should be with you every step of the way to help make this happen. He or she needs to be in constant contact with the buyer’s broker, the title company, the bank, and the inspector.

Closing on your house

You’ve made a wise decision if you have hired a Realtor during the home buying process —just make sure you and your broker agree upon expectations.

MN contract for deed myths

Busting the Most Common Contract for Deed Myths

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MN contract for deed can be an excellent way for those with less than perfect credit to finance home purchases. Particularly in Minnesota, contract for deed has been a preferred home financing method for years as many people have credit blips and issues that allow banks to quickly turn them down. Contract for deed, however, is sometimes the victim of misconceptions and broad statements that just do not apply.

It’s Not Rent-To-Own

mn contract for deed

Rent-to-own is another alternative financing method, but it can be an issue for buyers. In a Minnesota rent-to-own scenario, a property owner will offer to rent to a tenant. The property owner then agrees to put a portion of the rent aside that the tenant can put toward the eventual purchase of the home. This is not necessarily a down payment but could be a credit. For example, a property owner could offer to place $200 of the tenant’s $1500 monthly rent payment toward the purchase of the home. If the tenant made 36 on-time payments, the seller would then give the tenant credit for $7200 toward the purchase of the home. The problems with this are:

  • The money doesn’t really exist after it has been paid to the landlord.
  • It only is booked as a possible credit.
  • If a purchase price hasn’t been predetermined, the landlord could just raise the price of the home by the amount of the credit.
  • If the tenant is late on only one payment, all credits can be forfeited.

Minnesota contract for deed doesn’t work like this as we will explain below.

MN Contract for Deed is Not Predatory

How Rent to Own Works

In other states, rent-to-own and similar contracts for alternative financing are called executory contracts and are not liked by state courts.  The reason for this is that unscrupulous property owners would find un-creditworthy victims, receive a substantial down payment, sign them to a contract that requires big monthly payments, and add clauses that forfeit the down payment if even one monthly payment is a day late. Then the property owners would evict the tenant and start the process again.

MN contract deed is different, again, as we will explain below.

It’s Not Only for Those with Bad Credit

Business owners know that even with good credit it may be difficult to purchase a home. Take the example of a restaurant owner that has paid every bill on time, but he or she may have high student loan balances, high business credit balances, too many business credit cards, multiple vehicle payments and other debt. Throw in a recent divorce, and that busy successful entrepreneur may have issues getting financing.

This is a case where MN contract for deed could help.

Contract for Deed Credit

How MN Contract for Deed Works

  • You find a Realtor
  • You find a home.
  • You bring the deal to C4D.
  • We buy the home.
  • We sell it to you using a contract for deed.
  • You make all of your payments.
  • You get the deed, and you are a homeowner!

If you have any questions about us or our MN contract for deed process, be sure to contact us. We make deals where others cannot, and we have an impressive list of homeowners that would still be tenants if they had not come to us.

Repair Your Credit Score Today!

5 Ways to Repair Your Credit After Foreclosure

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Sometimes things get really difficult, and you think you’ll NEVER be able to repair your credit.

You may have lost your job, faced massive medical expenses, your business failed, or maybe you just bought a more expensive house than you could handle. While you tried to avoid foreclosure, you woke up one day and realized that it was inevitable.

Repair Your Credit

If you lived in a non-judicial foreclosure state like Minnesota, the process probably happened quicker than it would have had you lived in neighboring Wisconsin where foreclosures sometimes slowly wind their way through the court system. Nevertheless, it’s over now, and you’re afraid to look at your credit score. Times might be tough, but you NEED to understand how to repair your credit.

The Foreclosure Effect

Foreclosure

The bad news is that your credit score can drop as much as 150 points or more once the foreclosure process is completed, but the good news is that while a foreclosure will stay on your credit report for up to seven years, you can watch your credit score rise if you do the following:

Repair Your Credit By Considering Bankruptcy

If foreclosure is merely one symptom of your financial distress, and if you still have lots of debt that you are unable to pay, consider wiping the slate clean with a Chapter 7 bankruptcy. If your credit score is going to take the foreclosure hit, it may be prudent to clear as much debt as possible through bankruptcy and truly start fresh.

Remember, however, that certain debts like student loans and taxes are not normally dischargeable in bankruptcy.

Don’t Be Late

Late payments will only set you back again, so make all payments on time. Do a thorough budget analysis and do everything possible to pay all bills when they are due. This may mean getting a second job or going out to eat less often but do whatever it takes to never be late with a payment again.

Rebuild and Repair Your Credit Score

Credit can be rebuilt; it may be challenge, but it can be done. Newly bankrupt individuals often quickly receive high interest and high monthly fee credit card offers. Some of these are almost predatory as you may be offered a $300 line of credit minus a one-time fee of $75. Still, if you make on-time payments, even these companies will report favorably to the credit bureaus.

Repair Your Credit Score

Friends and Family Can Help

If you need money, see if you can borrow it from friends and family. They don’t report to credit bureaus, and they may offer you very generous repayment terms.

Go Back to School

Federal student loans are provided without checking your credit score. Didn’t hear us the first time? You can get a federal student loan with bad credit that includes bankruptcy and/or foreclosure. There are caveats of course — and you still want to work hard to repair your credit score. If you have defaulted federal student loans, or if your bankruptcy is active, you may have issues.

If your only problem is bad credit, late payments and even a foreclosure in progress, you can still get a loan. At a good state non-profit university, you can take six credits—some of them online—get a federal student loan, have the loan pay your tuition, and there still can be money left over for you to live on. Yes, you have to pay back student loans, but not until you are finished with school.

Buying a Home After Foreclosure

Steps to improve credit score

Banks want squeaky-clean credit and no missed payments of any kind for 36 months before they will even consider you for a home mortgage. We know it’s tough to go for three years without a financial blip, but this is where the experts at C4D can help, while you work to repair your credit score.

We use MN contract for deed to get you into a home that you will own free and clear after you make all of your payments. Because we look at people—not only credit reports—and because we have developed superior banking relationships over the years, we can help you buy a home after a financial crisis. Bankruptcy and foreclosure should not be considered financial death. You will have been injured, but you can recover. Check out our site to see how we can help you like we have helped countless others.

Costly First Time Homebuyer Mistakes

Avoid These 4 First Time Homebuyer Mistakes

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You’re ready to make the move from a rental unit to your new home. You’ve checked and updated your credit, and you are ready to look for properties. You have saved a nice-sized down payment and you are set to pull the trigger. Be careful, however, that you don’t make one of these crucial first time homebuyer mistakes.

First Time Homebuyer Mistakes #1: The Wrong Agent

First Time Homebuyer Mistakes

Let’s be clear. You don’t need to be represented by a real estate agent at any time during the purchase process to avoid making a first time homebuyer mistake, but many buyers like to contract with an agent because:

  • It’s free! The buyer pays the commission.
  • You have instant access to MLS listed properties.
  • The agent does the negotiating.
  • You never have to meet the owner except maybe at the closing.
  • The buyer can be a great information resource.

Homebuyer Mistakes

If all that’s true, what could be the problem? Well, the wrong agent could slow down the buying process because:

  • They are too busy.
  • They don’t have sufficient market knowledge in your area.
  • They are inexperienced.
  • They are not ethical.

Therefore, make sure you have carefully vetted your agent, and that you are comfortable that they are reputable, knowledgeable, ethical, and are not overloaded with clients. Also, at the initial meeting, understand agent contact rules. While you may expect instant answers to your questions, real estate agents and Realtors do have other clients, and you may have to be patient at times.

First Time Homebuyer Mistakes #2: Wrong Lender

Many entities make mortgages. Banks, credit unions, private lenders and even Internet banks regularly offer mortgages. This is one area where you need to do your homework and understand the difference between 15 and 30 year mortgages, for example, and all of the implications thereof. Mortgage rates can vary, so don’t take the first deal that’s offered to you. Later, we’ll talk a little about MN contract for deed financing.

First Time Buyer Errors

First Time Homebuyer Mistakes #3: Falling in Love with a Property Too Soon

Just because you have always wanted a great lawn and the first property you see has impeccable landscaping doesn’t mean you have to buy it at any price. Sure, it might be great to live there, but you are not living there now, and other homes are available. Don’t get caught in bidding wars (here’s how to win a bidding war, should you encounter one); see lots of houses before you make a decision. This isn’t HGTV where you get three options and that’s it.

First Time Homebuyer Mistakes #4: Wrong Neighborhood

If you are from out of the area—especially if you are from a different state—it’s extremely important to gain total knowledge of the municipality before you make a move. A first time homebuyer mistake, at this point, would be terribly expensive.

There are many stories of first-time out-of-state buyers that purchased a home in what they thought was a desirable location, only to find out six months later that they would have liked to have located somewhere else. Viewing many properties on the same day in an unfamiliar city can just be a blur. Sometimes renting a home in a new city before you buy is a good option since that will give you time to figure out exactly where you want to live.

First Time Homebuyer Mistakes

It’s all about good Realtors and agents, proper financing, not making rash decisions, and of course choosing the best location. Sometimes everything works out except the financing, and if that’s the case, don’t give up, because we’ve helped many persons that, for a number of reasons, just can’t qualify for a mortgage. We use MN contract for deed, and we invite you to visit our site to learn how we make home ownership a reality when others have said no.

Your Guide To Buying A Foreclosed Home

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Buying a foreclosed home became extremely popular about a decade ago. Why? Well, the problems that began in 2009 led to a meltdown that created scores of opportunities for both investors and previously foreclosed homeowners that wondered if they’d ever purchase a home again after foreclosure. 

Over 5 million homes were foreclosed since then, and many investors have looked upon these as opportunities.

Since HGTV shows like Flip or Flop have become popular, many people think they are familiar with what a foreclosure is, and they think they can make big money by picking off great property values before someone else does. We advise you to be careful.

What is Buying a Foreclosed Home?

When you are looking at a home that is listed as a foreclosure, you need to understand what that means. Is this home in foreclosure, is the seller trying to avoid foreclosure, is someone offering a short sale, or is the property genuinely bank owned?

Buying a Foreclosed Home

How Does Buying A Foreclosed Home Work?

Usually, after a homeowner crosses the 90 day past due mark, the lender will begin the foreclosure process. This simply means that the lender begins the legal work necessary to take back the collateral—the home—that the homeowner placed as security with the lender. Unfortunately for Minnesota debtors, MN foreclosures are many times non-judicial; this means that properties can be taken back outside of the court system. Foreclosures can take a lot longer in judicial foreclosure states like Wisconsin. Our friends at alllaw.com tell us this happens as follows in Minnesota:

Notice of the Foreclosure

In Minnesota, a foreclosing party must give the defaulting borrower the following notices.

Notice of the default. In most cases, the foreclosing party must mail the borrower a written notice of any default before officially starting a foreclosure. The notice must provide the borrower with 30 days to cure the default.

Notice of availability of foreclosure prevention counseling. Along with the notice of default, the foreclosing party must also provide notice that foreclosure prevention counseling services are available and that the homeowner’s contact information will be sent to an approved foreclosure prevention agency.

Notice of sale. To start the foreclosure process, the foreclosing party must first file a notice of the pendency of the foreclosure with the county recorder’s office. After filing the notice of pendency, it must publish a notice of sale for six weeks before the sale. The foreclosing party must also serve a notice of sale to the occupant of the home four weeks prior to the sale.

Foreclosure advice to owners and notice of redemption rights. Along with the notice of sale, the foreclosing party must provide a foreclosure advice notice, which provides information about how to get help, as well as a notice of redemption rights providing information about what happens after the foreclosure sale.

The foreclosure advice notice must also be provided with each subsequent written communication mailed to the borrower. A foreclosing party is deemed to have complied with these requirements if it sends the foreclosure advice notice at least once every 60 days up to the date of the foreclosure sale.

In Foreclosure

So if you are looking at buying a foreclosed home, the actual home shown as “in foreclosure” is probably somewhere in the process described above. If you are interested in a property while it is in foreclosure you have to deal with all parties including the homeowners and all lenders. You can’t make a deal with only one of the parties involved.

Short Sale Forclosure

Short Sale

Sometimes the homeowner gets the lender to agree to a short sale. This means that the lender may agree to take less than what is owed on the property in order to streamline the process and allow the homeowner to avoid a foreclosure appearing on their credit report. These deals can take quite a while to engineer, and again, all parties need to agree.

Bank Owned

When the foreclosure process has been completed and the collateral has been returned to the lender, the home is termed bank-owned. At this point you only need to deal with the bank or its agents, since the bank is the legal property owner.

Forclosed Home

Strategies

Foreclosures, like storage shed content sales, used to be a more quiet and shadowy business. This isn’t the case any longer, however, as foreclosed properties are commonly inundated with multiple offers as many people want to cash in on the misfortunes of others. The best way to attempt to buy a Minnesota foreclosure is with cash.

Once you have located the property you are interested in, do your diligence and find out who actually owns it. Then, if you have the power of a cash offer, you may be able to make a quick deal. Remember, with foreclosure deals we recommend that you get qualified legal help, and please be advised that this article does not constitute legal advice.

If you have any additional questions, please feel free to contact us here.

Second Mortgage

A Second Mortgage: Should You Take It Out?

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We know from the economic meltdown that began in 2008 that using your house as an ATM may not be the best idea. A fat line of credit that can be accessed with a debit card or even checks can be quite tempting, but that doesn’t mean that you should automatically think about taking out a second mortgage loan to tap your equity—unless you have a good reason.

Taking Out a Second Mortgage: Not So Good Reasons

You should only borrow money if you need it. That may sound simple, but in some countries, people borrow money simply because they can. Even in the U.S. in the early 2000s, many people based their “wealth” upon the amount of money they could borrow. Some people with only $5000 in savings but with $100,000 of available credit thought they were well off because they had the ability to raise a substantial sum. Therefore, they acted upon any chance to borrow money and loaded up on credit lines. If you are borrowing money only because you can, that’s not a good reason.

Taking Out A Second Mortgage

Taking Out a Second Mortgage: Finances are Tight

This happens for a reason. If you spend more than you make, you will be cash-flow negative, and that will cause you to borrow. If you have amassed considerable credit card debt, it may be very tempting to take out a second mortgage at a lower combined interest rate and pay off those cards. Seven or eight percent is a lot better than 27.9 percent, but if you don’t cut up your cards after you have paid them off, you may not be able to resist the temptation to max them out again.

Finance are Tight

You Just Need Some Breathing Room

Breathing room is great, but if the forces that are suffocating you are not dealt with, you won’t make any progress. If your $800 monthly utility bill is killing you, turn down heat, turn up the A/C, quit watering your lawn or turn out the lights. If you don’t act, you’ll soon see another $800 energy bill, and you’ll have to figure out how to pay that. Borrowing against your home for monthly expenses that you can’t reduce is not a good idea. Instead of this, start looking for the best side hustles that allow for some extra income!

Economic Stimulus

Some Better Reasons for Taking Out a Second Mortgage

There are, however, some good reasons to borrow against your home:

  • You’re starting a business.
  • You want to go back to school and can’t get reasonable student aid or loans.
  • You want to help a family member.
  • You want to start a remodeling project that will increase your home’s value.
  • You want to assist your children with some expenses.
  • You found a great investment opportunity.

Like any other loan, make sure you shop around to get the best terms.

The Contract for Deed Crew

While we don’t do second mortgage loans, we at C4D can assist you with the purchase of your home. We are more flexible and understanding than a lot of banks, and we are experts at using the MN contract for deed as a path for true home ownership. If you have any questions, visit our site. We are here to help!

Rent vs Own

Rent vs. Own: The Actual Monetary Difference

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Some consider rent vs. own to be the ultimate real estate question. For example, if you’re living in Dallas, should you just rent from a site like this because someone else is responsible for repairs, yard maintenance, storm damage, etc ., or should you take the plunge and become an owner so that you can build equity? Where is the tipping point? Where do the lines cross to indicate that it is more sensible to either rent or buy? Just because we are MN contract for deed specialists doesn’t mean that we blindly endorse one scenario over another, so let’s get started.

Let’s Take Autos as an Example

Rent vs. Own

A CPA friend of ours used to buy all of his cars. He took care of them, nursed them along, and replaced countless brake pads, tires, alternators, exhaust pipes, and more. He had a rule that he would finally try to sell the car when the rear-view mirror fell off. Our friend would buy the cars with a bank loan and was obligated for four years of monthly payments. During the first three years, the car was under warranty, so major repairs were not a factor. The new car warranty usually ran out after 36 months, however, so in year four, our friend was making payments and paying for certain repairs. After year four the car payments ended, but repairs became more frequent.

Our friend would take the four years of payments, add repairs, then subtract that from the price he ultimately received for his used car. Frankly, with some vehicles he won, and with others he lost. Eventually our CPA decided that we would never buy a car again because it was a depreciating asset, and he didn’t want to own depreciating assets.

He instead decided to lease all of his vehicles for three years max. He made 36 monthly payments but any repairs were covered by the new car warranty. Many times, he could even get along without having to replace the tires. He considered the monthly payment to be a “cost of driving,” and figured that he would have had that cost anyway since it was either payments, payments plus repairs or repairs only. At the end, if he owned a vehicle, his $18,000 purchase might be worth only a few thousand dollars, and he decided that owning a car was a futile exercise.

But What About Homes?

Some people apply the rental theory to homes. They don’t want to cut the grass. They don’t want to pay for repairs, and they don’t want to worry about the housing market. If you agree, by all means find a great rental property and let someone else worry about the taxes, upkeep and maintenance. If something breaks, call the landlord and spend your money on something else.

Check Out the Residential Difference

Rent vs. Own Homebuying

Image via Trulia

We do urge you to look at the other side, however, as there is a one huge difference: Homes increase in value. We of course can’t guarantee that every purchase is going to be a winner. But look at Austin, TX, for example where housing prices have increased over 30 percent in the last few years. And here is what Zillow currently reports about Minnesota:

The median home value in Minnesota is $225,300. Minnesota home values have gone up 8.0% over the past year and Zillow predicts they will rise 7.9% within the next year. The median list price per square foot in Minnesota is $177. The median price of homes currently listed in Minnesota is $265,000 while the median price of homes that sold is $237,300. The median rent price in Minnesota is $1,550.

Rent vs. Own: Compounding Benefits

When you buy, your monthly payment reduces the amount owed on your appreciating asset. You win both ways as your house becomes more valuable but you owe less. Your equity increases because you are paying down the loan, and because prices are rising. Furthermore, as you pay down your loan, the amount attributed to equity goes up, and the amount paid toward interest goes down. Get into that 10th ownership year and you may be surprised at the equity you have built, even if the housing market is not robust.

The Contract for Deed Crew Can Help

We can’t put money into your checking account (you can learn a ton of skills online to help you do that; example: how to start couponing). But remember, we can help you get a house.  That said, we like traditional financing and congratulate you if you have been approved. If not, let’s talk about what C4D can do for you. We are MN contract for deed experts, and as we have told you previously, we many times say yes when your bank has said no. Go here for more info.

Homebuying After Divorce

Buying A House After Divorce: Yes! It’s Possible.

1000 500 Sam Radbil

Buying a house after divorce is a huge issue for many people across the country. To start, divorce can cost you a fortune. What else you ask?

Well, let’s face it, divorce is rarely stress free, and your recent interaction with the family court system is probably something you never want to go near again. You’ve spent time away from work, agonized about visitation rights, thought endlessly about money making ideas and paid some hefty legal bills, but the fun is just beginning because your spouse is occupying the residence and now you need to buy another one.

Buying A House After Divorce

Why Is That a Problem?

If your name is on the deed and the mortgage, even though you may not be living in the house, you are 100 percent responsible for that monthly payment according to potential mortgage lenders. If your ex has been making that payment, lenders will want proof that he or she has been able to handle the obligation for the past 12 months, and will ask for documentation. Yep—more bank statements, ACH confirmations and cancelled checks for you to dig up.

The bank may even want to see proof of your ex’s income to make sure that you are not making house payments in her name. Then they will probably ask for information about where you are living even if you are renting. Who is paying for that? Can you produce the proper documentation that shows you can handle your monthly rent without assistance?

Co-Sign Home Loan

Even if you can definitively prove that your ex has successfully made 12 months of payments, you could still be denied because you are, in effect, still a co-signer on the mortgage. This can also lead to MN bad credit as your credit score could be impacted.

Alimony and Child Support

Child Support

Not your favorite words, we know, and any court-ordered payment amounts will count against your income and injure your debt-to-income ratios. A $1500 monthly payment can cause outright rejection, or at the least, may cause you to qualify for a much smaller loan amount.

Have You Ever Been Sued?

If you were involved in a divorce you probably were, and must answer this question affirmatively. The answer will need lengthy explanation and can open the door for other queries from the lender.

Divorce Decree

Of course, the lender is going to want to see your fully executed decree; they are not going to take your word for anything.

Joint Accounts

Student loans, credit cards, autos, furniture purchases and more can be considered joint accounts. Even if your ex splits these with you, you will need to get your name off of the ones he or she is now responsible for. Again, if you name is on it, the lender will assume you are responsible for the debt, and you may qualify for nothing.

Joint Bank Account

The Answer: Buying A House After Divorce

When traditional financing brings you roadblocks instead of the key to a new home, there can be answers, and MN contract for deed can be an excellent way to become a homeowner—even if you are in the midst of a divorce. Our experts at C4D, a local Minnesota company, have, over the years, worked out a method to make you a homeowner.

Using MN contract for deed, a legitimate and recognized alternative financing method, we can look past things that traditional lenders can’t. Yes, we still want income proof, you have to have a job, and have to be able to afford your payment. We, however, view these requirements differently than traditional lenders, and we helped many recently divorced persons again purchase homes.

Contact us today to find out the details!