New Construction Twin Cities: Current Houses Available

Many buyers come to me and ask where they can get their next good deal on a new house. Before I give you some examples, I would like to talk about what it will take to qualify for these deals. Qualifying has changed a lot in the last 6 months.

Right now as an investor trying to get a loan you will most likely need 10% down payment with any loan you try to get. Also you will most likely need about a 680 credit score, and a pretty clean credit report. There are a few different lenders still allowing for Investment loans, which are also referred to as Non Owner Occupied loans. You could get these loans for as little as zero down just over 12 months ago, the market has changed. The interest rates have also gone up a lot for these loans due to the lenders risk and the amount of defaults. At the time of this writing a jumbo loan is any amount over $417,000. What that means to the buyer is that you will pay an additional premium(higher interest rate) if your loan amount exceeds the $417,000.

Another interesting thing that has changed is that we use to do what was called a piggy back loan. The reason these loans were available was to eliminate PMI (Private Mortgage Insurance) Often the same lender, or another lender would provide for a 10% or 20% 2nd mortgage on a property. These were often abbreviated as 80/20 or 80/10/10 loans meaning the remaining 10% was put as a down payment. PMI is private mortgage insurance to protect the lender in the case of a loss on default of the loan. PMI applies to loans with less than 20% down, Also referred to as Insured Conventional. Due to the amount of defaults, 2nd mortgage interest rates have really increased a lot. As of the time of this writing 2nd mortgages are even becoming very rare on Non Owner Occupied loans.

The reason 2nd Mortgages are becoming more rare is due to the large amount of default on Non Owner Occupied loans specifically, as stated earlier. Those with 2nd mortgages (2nd position) receive monies after superior lien positions in the case of a foreclosure. Superior lien positions would be a 1st mortgage, and or unpaid taxes (government liens). Often their isn’t anything remaining left over after a foreclosure, that’s why 2nd mortgage companies need to charge so much.

Getting back to deals and New Construction, we have New Construction available to those with 680+ credit scores and 10% down payment at an amazing discount of 25%. You will need to pay 2-3% buyer closing costs out of that. We can’t promise these discounts will last forever, but they are available for now. At the time of this writing we have some properties brand new available in Rogers, Otsego, and Greenfield. Join my next blog post to find out a little more about each of the properties.

Please contact me ron@minnesotainvestors.com and we’ll help you find a property.

Thanks,

Ron Jr.

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