Last Updated on June 3, 2017 by Andrew Lee
There are just so many things that make Minnesota a great place to live in. For one, it offers a vast array of entertainment options to both its residents and vacationers, all-year round. In the summer, enjoyable activities include hiking, fishing, and boating. And once winter comes, skiing and ice skating are just some of what people do for fun. And even if it has a slightly higher cost of living than many other states in the country, the high employment rate, coupled with an impressive household income median makes up for it. (Source: Livability.com)
The Twin Cities – Minneapolis and Saint Paul – attract new home buyers, but so does Rochester and many other charming counties.
How Much a Home in the State Costs
On average, real estate in the state costs a little more compared with other areas in the country. A home can fetch a median property value of $202,800, as opposed to the national median property value of $195,300. However, many of its cities have houses for sale with prices lower than those in other states.
Home prices also depend on the specific type of building. For instance, single-family homes, which comprise most of the housing market (88.60%), are valued on average at $141,219.18. Condominiums are at $100,964.89, PUD homes at $118,113.60, and townhomes at $102,760.80.
Home ownership comes with many benefits and satisfaction, but it is also one of the biggest financial responsibilities one can ever have. This is why potential home buyers should carefully lay out their plan before applying for a mortgage. Here are some of the most important guidelines one should follow before buying and taking out a loan:
- Confirming financial capability. Consumers with guaranteed long-term income are already good candidates for home ownership. However, they should still ensure their income is more than enough to cover the additional expense of monthly mortgage payments.
- Saving up enough for a down payment. Typically, lenders require a down payment of at least 20% of the house’s selling price. Borrowers who can’t afford to put down the entire amount can still qualify for a mortgage, but they most likely have to purchase mortgage insurance. This can quickly make mortgage-expenditures higher than necessary. To avoid this, home buyers should save a little more than the 20% equivalent.
- Determining future housing needs. For borrowers who intend to stay in the same house for a long time, a fixed-rate mortgage makes more sense. Those who only plan to stay for less than a decade in the same house may find an adjustable-rate mortgage better suited for their housing needs.
- Improving FICO score. Lending institutions take into consideration an applicant’s credit score rating when determining loan eligibility and potential interest rates. They follow a scoring model that classifies consumers based on their scores (excellent to poor). It should go without saying that the higher the score of a borrower is, the higher the chances of not just securing a mortgage, but getting a better interest rate too.
All in all, home buyers, whether first-time or repeat, should do everything they can in preparation for the considerable expenses ahead of them.
Existing home owners can also implement several tactics to avoid making their housing loan expenses greater than necessary, save money, and minimize foreclosure risks. One such strategy is a properly-done refinancing.
With this, home owners can possibly secure a new interest rate that is at least 1% lower than their current one. Since they have a better rate, they could already expect lower monthly payments to go with it. This can then save them a lot of money in the long run.
City of Lakes Community Land Trust – Homebuyer Initiated Program (HIP): http://www.clclt.org/ownership-options/
Minneapolis Advantage Program: http://ownahomemn.org/resources/program/minneapolis-advantage-program
Minnesota Housing Mortgage Credit Certificate: http://www.mnhousing.gov/wcs/Satellite?c=Page&cid=1391029245339&pagename=External%2FPage%2FEXTStandardLayout
Freddie Mac: http://myhome.freddiemac.com/refinance/traditional-lender.html
US Bank: https://www.usbank.com/home-loans/refinance/