Buying a Home With Someone?

One of the best reasons to take a Home Stretch workshop is to be able to fully understand all of the terminology that is related to homeownership.  This is especially important when closing on a property that you are buying with someone else... as a couple, family or just friends purchasing a property together.

In Minnesota when two or more people buy a home together they can choose joint tenancy or tenancy-in-common. The Minneosta Home Ownership Center has created a new Fact Sheet to provide an overview of both types of ownership.

Here's how it works:




Joint Tenancy
Joint tenancy is when two or more people own equal shares of a home. If an owner dies, ownership is transferred to the remaining owner(s).This is called the “right of survivorship.”

Tenancy-in-Common
Tenancy–in-common is when two or more people own a home. Ownership does not have to be equal. If an owner dies, ownership is transferred to the person(s) named in their will.

Tenancy-in-Common Agreement


When choosing tenants-in-common, a tenancy-in-common agreement is recommended. Agreements are usually written with the assistance of a real estate attorney.


The agreement generally includes:

• The agreed to percentage of ownership for each owner.
• A formula to determine the amount of each owner’s payment.
• Consequences for an owner not paying their portion of the mortgage.
• How property maintenance and the cost will be shared.
• Restricting the sale or transfer of ownership without the consent of the other owner(s).
• Acceptable reasons and the price to buyout an owner.
• What happens if an owner declares bankruptcy or in the event of a death.

To view this new fact sheet, and other helpful information for first-time buyers, visit the Center's website here.

If you're thinking of purchasing your first home... and would like to learn more about the types of homeownership and lots of other important information, you should take a Home Stretch workshop! 

More Warnings Against Scams

The Huffington post has a great story up about the dangers that struggling homeowners face when they don't know where to turn for help, or when they grow frustrated trying to work with their lender: they become prey to scam artists.

The piece is here.

The Minnesota Home Ownership Center has additional information on avoiding scams on the "Look Before You Leap" (Avoiding Foreclosure Scams) website, here.

Here are some additional tips on how to avoid foreclosure rescue scams:

• Don't fall for the lies that the scammers use to lure in homeowners: claims that they can save your credit, promise to find a buyer for your property or offers of free rent or gifts.
• Don't EVER be pressured to sign a contract... especially if you don't understand something.  If something sounds too good to be true, it probably is.  Speak with an attorney or a certified foreclosure prevention specialist who can help review documents with you.
• Don't EVER send your monthly mortgage payment to a third party or a mortgage 'rescue' company, even if they promise to forward those payments on, or hold them in a special account.
• Don't rely on verbal agreements.  Get everything in writing and keep copies of all documents, ESPECIALLY the ones you sign.  This is good advise, but many of the homeowners highlighted in the HuffPo article had 'contracts' and those contracts were worth less than the paper they were printed on, so be very careful.
• Don't sign any form or contract with blank spaces or blank lines. 

Basically, we can sum up these scams in one line: no one that is struggling to pay their mortgage should have to pay to get help!

There is a network of FREE foreclosure prevention counselors available in Minnesota that are ready, willing and able to sit down with you to discuss your options for avoiding foreclosure.  To connect with a foreclosure prevention counselor, click here.  To learn more about the options available to Minnesota residents to avoid foreclosure, click here.

Housing Indicator - 2x4 Report

The Minnesota Housing Partnership has recently released its updated report (known as the "2 x 4 Report") that studies two indicators for each of four key housing areas:

• the home ownership market,
• the rental market,
• homelessness, and
• the housing industry.

The report is a great resource for housing information, and is designed to provide a concise, easy-to-digest, graphic overview of the state of housing in the state of Minnesota.

The complete report is available here.

Focusing on the "Owners' Market" segment of their report, it's interesting to see that delinquencies fell slightly to 6.5% in the fourth quarter of 2010, continuing the downward trend that we've seen throughout the year.

Somehow... there is a disconnect happening that isn't easily explained:

In both 2008 and 2010 delinquencies were LOWER than 2009, but actual foreclosures (Sheriff's Sales) were higher in both 2008 and 2010.  In reality, the delinquency rate maxed out at just over 8% in Q4 2009, but the highest quarters for sheriff's sales have been Q2-2008 and Q3-2010.

View the report... and add your 2-Cents in the comments. 

Home Repair & Rehab Resources in Minnesota

The Minnesota Home Ownership has created an easy-to-use resource listing affordable home repair and rehab assistance programs throughout the state of Minnesota. Programs included in the resource include:

• emergency repair,
• energy efficiency upgrades,
• lead hazard abatement, and
• general repair.

Some funds are direct grants to homeowners and others are loans, usually with below market interest rates or forgivable terms. The resource outlines dozens of programs available throughout the state and includes information on who to contact and how to apply.

 

Here's a sample of one of the Rehab loans (Zero interest, deferred for 20 years) available to residents of St. Louis, Lake and Cook Counties.  There are several dozen other programs outlined in the printable resource:

 

 

Click To Enlarge

 

The complete “Home Rehab and Repair Matrix” can be viewed and downloaded, free of charge, from the Minnesota Home Ownership Center’s website here.

 

New Research on Foreclosures from Minnesota Housing

Minnesota Housing, the State of Minnesota's Housing Finance Agency, has released its "Residential Foreclosures in Minnesota, Winter 2011" report.  The data, on the delinquencies and foreclosures of residential mortgages in Minnesota, comes from LPS Applied Analytics.

The report provides information about key statewide trends on both delinquencies and foreclosures, and shows, using full-color maps, the foreclosure and delinquency hotspots around the state as well as information about changes in the number of delinquent and foreclosed loans in each zip code.

In addition, the appendices include two large tables that provide data for each residential zip code in the state... a plethora of information to dig through!

Here are some of their findings:

• The state’s delinquency rate for residential mortgages has increased significantly over the last several years. Between the fourth quarter of 2005 and the fourth quarter of 2009, the percentage of mortgages that were at least 60 days past due quadrupled from 1.10% to 4.71%.1 On the positive side, the delinquency rate declined during all four quarters of 2010. By the fourth quarter of 2010, the rate was down to 3.43%, which is still very high by historical standards.
• North Minneapolis and East St. Paul, like most areas of the state, experienced a decline in the number of loans at least 60 days past due.
• The biggest increases in post-sale/REO loans were concentrated in the outer ring of the metro area and counties further out, including Rice, Le Sueur, Sibley, McLeod, Renville, Meeker, Benton, Kanabec, and Pine.

The full report is available here.

Fannie Mae's 2010 National Housing Survey

Fannie Mae has released the findings of their latest National Housing Survey that polled homeowners and renters between October and December, 2010.

The Survey has some interesting facts and figures to digest:  

• 65% of Americans believe that it’s a good time to buy a home. This is almost unchanged from last January, but down five points (from 70%) that thought it was a good time to buy in June (2010).
• Just like last year… A large majority (78%) believe home prices have either bottomed or will rise over the next year. However, there have been price declines in most major markets throughout the U.S. over the past year (including here in Minnesota), meaning 78% of people polled in 2010 were wrong.
• The percentage of those polled who believe buying a home is a safe investment has fallen six points to just 64 percent since last January’s report.

The Center believes that potential homebuyers should ALWAYS be cautious when buying their first home – and be VERY careful when hearing things like “Now is a good time to buy!” and “Housing is a safe investment!”… the “Crowd” may not aways be right.


When renters were asked why they wouldn’t purchase a home… their responses are revealing:

• The #1 reason cited, by almost half of the respondents, was that they believe their credit was not good enough to obtain a mortgage.
• In addition, the #2 reason, cited by 47% (multiple answers were allowed)… was that they don’t think they can afford both a mortgage and the upkeep of a home.

While the Center applauds renters that approach the idea of homeownership cautiously… there is a way to KNOW if your credit is good enough… and KNOW exactly how much you can afford to purchase – or if purchasing a home is even a good fit for you: We recommend you take a homebuyer workshop! In Minnesota, the state's premier homebuyer (pre-purchase) education curriculum is known as Home Stretch. To learn more about Home Stretch, and other services for homebuyers, visit the Center's website here.

For more information about the National Housing Survey and to see the complete report, visit Fannie Mae's website, here.