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Should I Buy a House?: 4 Signs the Answer Is Yes!

I’m tired of my cramped living conditions, my nosy neighbors, and their obnoxious pets. And Covid-19 is making everything exponentially worse, so when do I know the time is right to move on? Should I buy a house in Washington County, Minnesota?

If you’re asking yourself these questions, you’re one of the tens of millions of uncertain homebuyers wondering whether you can pull off a home purchase during this pandemic. Below you’ll find the most important indicators that investors use to determine whether the answer is yes. Read on to discover for yourself whether this year it’s finally the right time for you.

1. What’s Your Credit Score?

Though perfect credit is no longer a requirement for mortgage approval, your odds of receiving approval rise with higher credit scores. With a credit score of at least 680, your odds of a pre-approval for a 2- or 3- bedroom home are high. Even with a 580 credit score, you qualify for a Federal Housing Administration loan with payments as low as 3.5%.

2. Do You Have the Down Payment?

When you’re buying a house, expect a few up-front costs. The costliest is your down payment. If this is your first home, you can find the other most common costs in a first-time buyers guide.

Down payments vary in accordance with your mortgage type.

  • 3% to 20% for conventional loans
  • 3.5% for 203k loans
  • 3.5% for FHA loans
  • 15% to 30% for jumbo loans

Only two types of mortgages offer zero down financing. In other words, a 0% down payment. They include VA loans and USDA rural home loans.

3. Can You Pay the Mortgage?

No, the question isn’t, “Will you pay the mortgage?” The question is, “Do you have statements that show you’re financially stable enough to cover the mortgage?” Most banks require at least 2 years of paperwork to back those claims, including a solid 2+ year employment history.

4. But When Should I Buy a House?

Do I buy a house this year? Should I wait till next year? When do I know the time is right?

Well, if made it through the sections above without answering, “no,” you’re on the home stretch. Now you need to answer a few final questions.

Do you plan to move again? Yes, buying a house is cost-effective. But only if you plan to stay for at least 3 years. Otherwise, renting is less expensive.

Are you prepared for repairs? Repairs can cost up to 10% of the price of your home each year if you purchase a fixer-upper. One of the most tips to find affordable homes is to look for used homes that have been built in the last 7 years. Around the 10-year mark, modern homes are more likely to need maintenance.

Are you ready to invest? A house is an investment. As such, you must be prepared both mentally and financially. It takes grit and strategic thinking to come out on top.

Is now the right time to buy a house? If you answered yes to all the above, then your answer is yes!

What’s Next?

By now you’ve answered the questions that have been plaguing you, should I buy a house or not? If it’s not the right time, don’t worry. You can re-evaluate your situation for 6 months or a year from now.

If you’re ready to pull the trigger and find the home you’ve always wanted in Cottage Grove or elsewhere in Washington County, MN contact your local realty agent today. So long and good luck!

Estate agent shaking hands with customer after contract signature

Essential Financial Decision Making Tips to Consider Before Buying a Home

Buying a home is a huge step in life that should not be taken lightly. There are many steps to take before securing the deed to your new house. It all starts with smart financial planning.

If you’re looking to buy a home, keep reading to learn more about financial decision making tips to consider.

Evaluate Your Finances to See What You Can Afford

The general rule for financial planning for your home is called the 28 percent rule. The 28 percent rule suggests that this amount of your income should be reserved for your mortgage payments.

Some believe this number should be as high as 36 percent. Either way, you should be able to set aside roughly one-third of your income for housing.

Explore Different Areas

If you don’t feel tied to your current location or need to stay local due to work or family, now is the perfect time to start looking into moving out of state. Since the cost of livingand taxes vary state by state, you may not be able to afford a home in your area, but a perfectly lovely home might be waiting for you a few hours away.

You should consider your future as well. Do you plan on starting a family? The cost of raising a family is different everywhere, as well.

A real estate agent can give you tips for the best areas for you and your (planned) family.

Check Your Credit Score

Your credit score impacts the loans available to you when trying to qualify for a mortgage. Most creditors look at your FICO credit score. It’s a number that considers your credit or loan payment history, owed amounts, length of credit history, new credit, and credit mix.

This score determines your creditworthiness, or how likely a creditor is to trust you to pay off your mortgage.

The lower your credit score, the higher your interest payments will be. If your credit score is poor, take steps to improve it before requesting a home loan. Paying bills on time, paying down debt, and keeping your credit card balances low will help raise your score.

Save Up Money for a Down Payment and Other Expenses

Another critical step in the financial planning process is saving money. You can buy a house with a $0 down payment, although you may be required to take out private mortgage insurance (PMI). PMI covers the lender in case you ever default on your loan.

A $0 down payment will also mean you’ll have higher interest rates and more fees. It also means you have almost no equity. This option is suitable for people who can’t come up with a down payment but should be considered before deciding.

Take a Look at Morgage Terms and Rates

Familiarize yourself with mortgage terms and the average rates in today’s market. Typically rates for 15 or 30-year fixed terms are between 2.5% and 3%. The price of a homewill impact what you can expect to pay for a down payment and other fees.

Financial Tips to Consider Before Buying a Home

Now that you’ve started the search for your dream home, it’s time to get your finances in order; evaluate your income, and see what you can afford. Get a realtor on board to help with buying a home in the right area for you.

If you’re looking for a home in the Minneapolis or Saint Paul areas, get in touch with us.

cottage grove mn

Local Housing Trends Within Cottage Grove, MN Real Estate

Despite the current chaos of the COVID-19 pandemic, the real estate market continues to boom. While this current boom is deemed a “seller’s market,” favorable marketplace conditions for buyers drive the current upswing.

All across America, first-time buyers are in a frenzy, trying to get themselves locked into the home of their dreams before an inevitable downturn.

If you’re thinking of investing in Cottage Grove, MN real estate, now is the time to act. Read on to learn the current market trends.

Interest Rates

The driver for the current housing boom is the historically low interest rate on mortgages.

Depending on your credit score and loan program, you can lock in a rate of two to three percent on a 15 or 30 year fixed rate loan.

These rates are low. Part of the reason the Federal Open Market Committee set these low rates is to spur activity in the loan market despite the massive job loss and economic upheaval of the COVID-19 pandemic.

A residential investment now means you get a favorable rate should the market fluctuate in the future.

Competitive Market

Right now, real estate in Cottage Grove, MN is highly competitive. Homes in the area receive multiple offers and often sell at two to four percent above list price.

Given the competitive market, you need a capable Cottage Grove realtor to guide you through the process. An expert realtor can help you maximize your value in a competitive market.

Rising Prices

According to Zillow.com, homes for sale in Cottage Grove, MN have a median price of $297,740.

Zillow’s numbers show the median price jumped from $202,000 to the current $297,740 in the past ten years. That’s an increase of $95,740 in a decade!

Unless an extreme market disruption or crash occurs, prices should keep this steady rise. Zillow predicts the median price will reach $317,000 by September of next year.

This means your investment in Cottage Grove, MN real estate will pay off big time.

New Development

One of the major drivers of real estate pricing is new development.

New city development projects can push real estate market values through the roof in a very short period of time. Buying in a neighborhood or city where development is imminent but has not yet broken ground is a great way to find value.

The town of Cottage Grove is about to explode with new development. In January 2020, plans were revealed for a 75,000 square-foot mixed-use walkable development.

Titled Shoppes at Cottage View, this new project calls for new homes, apartment buildings, retail space, and green space. When built, this type of development will increase the value of your investment.

Buying Cottage Grove, MN Real Estate

Right now, the real estate market all across the United States is hot. Thanks to low and steady interest rates, buyers are willing to buy like never before.

Cottage Grove, MN real estate is on a steady trajectory. As interest rates are low and prices continue to rise along with new development projects, now is the time for you to lock in your dream home.

Looking for realtors near Cottage Grove to help you buy your dream home? Contact ustoday.

Document with title Property tax on a desk.

Understanding Property Taxes Within Cottage Grove, MN

I’m so excited to pay my taxes!…said no one ever. However, many of us do enjoy the benefits such as good schools, roads without potholes, and the other government services that taxes help to pay for.

If you’re thinking about talking to realtors near Cottage Grove to move to our beautiful city or make a residential investment, you may be wondering how the property taxes work in our area. Get an idea of what you’ll have to pay and when in this little guide to property taxes in Cottage Grove, MN.

How Are Property Taxes in Cottage Grove, MN Calculated?

Washington County, where Cottage Grove is located, separates properties into four different classifications.

  • Residential Homestead
  • Residential Non-Homestead (single unit)
  • Residential Non-Homestead (2-3 units and vacant land) and Apartments
  • Commercial/Industrial

Taxes are calculated slightly differently for each type but the amount is based on the value of the property. Each year, county appraisers assess the value of each property in Cottage Grove. In March, homeowners receive notice of how much their home has been appraised for. If homeowners believe the value is erroneous, they are allowed to appeal in April.

By July, all values are set and this is the basis for the taxes that are due the following year.

When Are Payments Due?

You can pay your property taxes in two parts. The first payment is due by May 15 and the second by October 15 of each year.

There are a number of ways that you can pay your taxes. You can send them by mail, pay online, use a bill pay service, or make an in-person payment at the Stillwater Government Center.

Tax Capacity

So, how much will you have to pay? Well, the calculation varies from year to year. As part of the city’s annual budgeting process, how much money will be needed to meet operating expenses and pay the city’s debts is determined each year. Then, the property tax formulas are set by the legislature.

The tax capacity on homes in Cottage Grove, MN is often graduated. For example, the first $220,000 may be assessed at 1% and any value above that at 1.25%. The amount typically won’t vary drastically from year to year.

Ready to Move to Cottage Grove?

Don’t let property taxes in Cottage Grove, MN scare you away from our beautiful city. You’ll have to pay taxes anywhere you decide to live or buy a rental property. We hope this article has taken some of the confusion out of the matter and you’ll be more prepared to join our ranks. Remember, the more people we have sharing the tax burden, the less each individual will have to pay.

Are you looking for homes for sale in Cottage Grove, MN? With many of the top Cottage Grove realtors as associates, we’re happy to help you find the perfect piece of real estate in Cottage Grove, MN.

Reach out to us today to get connected start shopping for your dream home!

Miniature house with money on tax papers

5 Tips for Finding the Best Affordable Homes in Your Area

In 2018, 10.9 million renters spent more than half of their income on housing.

As rent prices continue to increase, it’s no wonder that you’re thinking about purchasing your own property. But you might quickly find that the housing market isn’t much more affordable than the rental market – so you need to know where and how to look.

There are plenty of affordable homes out there that are sure to fit your budget. All you have to do is know what that budget is and then start looking with an open mind and a willingness to make some sacrifices.

Keep reading for five essential tips on how to find a place to call home that doesn’t break the bank.

1. Start With a Budget

The first question you need to answer before you start looking is: “what home can I afford?” Knowing that figure means sitting down and working out a detailed budget.

Of course, you’ll avoid any home that exceeds your budget. But you also need to take into consideration things like transportation costs. You might be able to afford higher housing costs if you live closer to work, for example.

2. Look for Sellers Willing to Make a Deal

How do you find sellers that are ready to make a deal? You know how to spot the signs.

First, you can look for homes that have been on the market for a long time. Sellers who need to move will be more open to making a deal.

Second, you can look for homes that have recently had their price reduced. This usually indicates that a seller hasn’t received any offers and is looking to sell their home, even if it means making a deal.

3. Buy a Fixer-Upper

When you see the words “as is” in a listing, it’s typically indicating a home that needs a bit of work. And a home that needs a bit of work can usually be had for the deal. You can also find fixer-uppers in your cities vacant housing list.

If you decide on an affordable home that needs work, make sure that you’re capable of completing the work. If you’re not doing the work yourself, then have a good idea of what the fixes will cost. Otherwise, you could end up spending more on renovations than you saved on the selling price.

4. Don’t Be Limited by Location

You pay less for homes that are in less-desirable neighborhoods. Less-desirable neighborhoods are those that are further away from your local hot spots, shopping, transportation, recreational areas, and schools.

 

Make a list of what’s important to you but don’t be limited by location. And consider that if you’re willing to relocate completely, you stand to save a lot of money. Moving to the Midwest or the Southern US is far more affordable than living on either coast, for example.

5. Don’t Be Limited by Home Type

If it’s important that you’re living in a hot spot or that you’re close to transportation, then you can’t limit yourself to a single-family home. These days, single-family homes located in metropolitan areas are often unaffordable for first-time buyers.

Instead, think about the benefits of a condo, duplex, or townhouse. While they may be smaller, they’re more likely to fit into your budget. And as more people opt for these housing types because of their affordability, many are designed with families in mind.

Start Looking for Affordable Homes

Before you start looking for affordable homes, make sure you set your budget. Don’t limit yourself to location or home type and have a willingness to be flexible with how much work you’re going to put into your new home.

With all of those items in mind, your sure to find a home that you can afford. And when you’re ready to start looking, start narrowing down your search with our listings.