asphalt road with text welcome to minnesota near yellow line. concept

Buying a Home in Minnesota? Here’s What You Should Know

Buying a home in a new state is always a little stressful. The differences in the market, factors in the area you’re looking at, and different policies for real estate agents can make the process pretty intimidating.

If you’re looking at the Twin Cities market, we’re going to tell you what to know about buying a home in Minnesota. Homes in the Twin Cities fall all across the board and the Minneapolis-St. Paul is filled with a wide variety of options.

Hopefully, the information below can give you some insight into how to approach buying a home in Minnesota and what to expect when you zone in on a house. Keep reading to find out what you need to know.

Things to Know When Buying a Home in Minnesota

The first thing to note about scoping out homes in the Twin Cities is that slight differences in location will have a big influence on price.

Summit Avenue in St. Paul, for example, has rows of million-dollar homes that sit just a few blocks away from homes that are far more affordable. So, don’t get discouraged by a few high asking prices if there’s an area that you like.

The Suburbs Are a Short Commute

Another thing to keep in mind is that the Twin Cities are at the center of a network of great suburbs. Brooklyn Park, Golden Valley, Edina, Cottage Grove, and Woodbury are all within a 15-minute drive of the city centers.

This makes buying a home a lot easier if you’re going to be driving into the city for work every day. Additionally, proximity to the city gives you a lot of opportunities to enjoy the nightlife, restaurants, museums, and various state parks that exist within the Twin Cities.

Account for the Weather

This is one of the most important Minnesota real estate tips, and it’s particularly true for the winter season.

Minnesota is home to a wide variety of seasonal conditions.

These differences can have a big impact on different elements of the home. Roofs, basements, siding, and heating systems all take a toll in the winter. These are elements of the house you’ll want to ensure are in good condition when you do a walkthrough.

It’s also smart to think about your commute and your vehicle. If you plan to drive a sedan, keep the slope of your potential driveway in mind. The winter can lead to a glaze of ice that might prevent you from getting back up!

Fortunately, most, if not all, of the houses you’ll look at near the city are very accessible throughout the year.

Minnesota Has a Unique Real Estate Process

Understanding how to buy a house in Minnesota might be a little different than it is in other states.

Issues like broker reciprocity, real estate commissions, dual agency, loan approval, and more might not be the same as they have been for you before. It’s important to contact a real estate agent to get expert tips about buying a home in Minnesota.

Help Is Never Far Away

A beautiful thing about living in Minnesota is that the people are notoriously friendly and helpful. “Minnesota Nice” is the common phrase used to describe the people here.

The real estate market is no exception. If there are any questions that you have about the process or how to find a home, we’re here to queue you into all of the details that you should know and answer any questions you may have.

Need Help Finding a Home?

Hopefully, this brief guide for homebuyers in Minnesota was helpful as you start your process.

If you’re buying a home in Minnesota, whether you’ve lived here forever or you’re just moving to town, we’re here to help. We have a wide range of listed homes, insight into the market, and a wealth of knowledge about how to make your home buying process as smooth as possible.

Contact us for potential homes, insight into the process, options for selling your home, and a whole lot more.

Young happy couple receiving house keys from real estate agent. Giving keys of new house to young couple. Smiling couple signing financial contract for mortgage.

Buying a Home? 6 Tips for First-Time Home Buyers

Excitement is in the air when it comes to being a first time home buyer.

In 2019, the United States saw the largest boom among first time home buyers. Of the millions that bought homes, 29.8 percent of the national market was made up of new home buyers. This is a five percent increase in comparison to previous record numbers.

If you’re soon to join this list, you’ll want to know these 6 tips for first-time home buyers before putting in an offer.

1. Previous Debt and Emergency Funds

Before you add debt to your credit history, make sure you have the money to make a smart decision.

Home buying is expensive. This is especially true depending on the type of neighborhood you live in. Aside from the upfront costs of purchasing a home, you’ll be making investments in the property and any maintenance necessary.

Make sure you have enough emergency money and previous debt eliminated.

2. Set a Budget

Before you start saving money you need to determine your home-buying budget. First time home buyers rush into the process without reviewing their finances.

You can use helpful online resources to help you determine what your budget is. Settle on a price range that reflects your budget, relationship status, credit score, down payment, and location.

3. Consider Mortgage Options

There are a few different categories of mortgage options when you’re looking to buy a home.

Conventional mortgages, FHA, USDA, and VA loans are all worth looking at. Depending on your situation, one may provide a better interest rate or payment figure.

The longer the loan is in years is linked to the interest rate of the loan. Fewer years means higher payments but less interest paid over time. Choose an option you can afford.

4. Closing Costs

Buying a house is the beginning of additional fees you’ve never heard of. Closing costs on average cost about three to four percent of the purchase price of your home.

They’re necessary to pay the appraisal, home inspection, credit report, attorney, and homeowner’s insurance. Make sure you’re keeping closing costs in mind when you’re budgeting for a home.

5. Ignore Emotional Attachment

It’s easy to fall in love with a house you can’t afford. Emotional attachment is the root of making poor life choices.

Although this sometimes doesn’t backfire, getting too attached when buying a home can string your money out thin. Make sure you’re following the six tips for first time home buyers that we’ve laid out.

If not, you might find yourself bidding out of your price range.

6. Unicorns Don’t Exist

Unicorns, or the perfect house, is a common term in home buying. Although you want your first home to check all the boxes, it doesn’t have to.

Sure, sometimes the perfect situation falls into your lap. Most of the time this isn’t the case and if you find yourself waiting around for the house that checks all those boxes you might be waiting forever.

Follow These 6 Tips for First-Time Home Buyers

If you’re ready to use these 6 tips for first-time home buyers and make an offer, you need a company you can trust.

Next Home Elhm Reality is there for you. Tips for first time home buyers can make a break a purchase. If you’re led astray you’ll find yourself overpaying with additional stressors you don’t need to force on yourself.

That’s where we come in. Give us a call today to discuss some excellent Minnesota homes we have listed on our website.

You’ll be glad you took the time to prioritize your future home.

855c0ed5f585c645670757ca86383dab

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.