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Saint Paul Estate Planning Law Blog

Take care with adjustable rate mortgages

You're excited to purchase your first home, especially because after a long search, you've finally found one you want. You've finally obtained a mortgage you can afford. The problem is, the mortgage is what's called an "adjustable rate" mortgage, i.e., it's a "ballooning mortgage." You can afford the mortgage now, but in a few years, you won't be able to afford it once your monthly payment obligation goes up.

When people agree to an adjustable rate mortgage, they could be setting themselves up for failure -- especially if they currently cannot afford to pay the payments on the mortgage once it balloons. Nevertheless, this is not enough to stop many optimistic homeowners from getting him or herself into a situation like this. When the mortgage begins to balloon, if he or she is not earning a higher income by this time, the homeowner will need to scramble to refinance or sell the home.

The first 3 things to check before closing on your home

There are countless things to keep track of in every real estate transaction. The closing process alone, when there's no turning back on the transaction, will have a tremendous number of details that you need to get right. To get you started off on the right track when it comes to your real estate closing, here are three things you'll want to check:

Review the contingencies and make sure they've been taken care of

Who is Ginnie Mae?

You've probably heard the word "Ginnie Mae" before in the context of government-assisted affordable housing. You might have even thought "Ginnie" was a real person. In fact, it's an organization that seeks to create affordable housing for millions of Americans who are low- to moderate-income earners. The federal agency works to divert global financial capital toward the housing and real estate markets in the United States.

The Ginnie Mae guaranty permits mortgage lenders to get better prices for mortgage loans on the secondary market. Lenders can then take the proceeds they earn and redirect it toward new mortgages, making the entire process of getting approved for a mortgage easier for individuals who want to purchase a home throughout the United States. Basically, the services offered by Ginnie Mae let lenders sell the mortgages they have in their portfolios to investors, which frees up capital so they can make new loans more quickly.

Get to know your mortgage before you buy

Understanding a mortgage is as important as the mortgage you end up getting. A mortgage is simply a debt instrument, but there are various kinds. Mortgages are loans used for properties, and they must be paid back according to the terms of the mortgage's preset agreement.

It is typical to see mortgages set for 15, 20 or 30 years. Depending on when you get a mortgage, the interest rate may be fixed or variable. Additionally, it's possible to get a mortgage with or without money down as a deposit.

With a flat economy, it's still possible to bring in an income

The economic recovery was a relief to many people in America. It meant there were more jobs and better home prices. Their properties began to improve in value, helping many sell for more than their mortgages, so they could move on to new ventures.

There is a concern that the economic recovery is beginning to slow, though. An Oct. 21 report describes record-low unemployment in Minnesota along with decent wage increases. However, that doesn't mean the economy is still booming. Some people are worried that there could be another economic crash.

3 tips for selling commercial properties

If you plan to sell commercial real estate that you've purchased, there are a few tips that can help you. It's not always easy to sell a commercial property, but in the right market and at the right price, it's possible to sell even the worst property you own.

How can you make sure you sell your property quickly and easily? There are a few easy things you can do.

Choose where to live during retirement carefully to save money

One thing that you might be interested in as you get older is obtaining a mortgage that you can pay with your Social Security retirement alone. Social security checks are expected to be around $1,461 per month for individuals in 2019 on average. Couples receiving this much may have enough to cover the major expenses, like health care, utilities, housing, transportation and food, but only in some areas of the nation.

Something that people approaching retirement with a mortgage should know is how much they can expect to see left over after their expenses are paid. It will vary, but knowing the cheapest places to live will help maximize what you receive.

Understanding the home-buying process

Buying a house in Minnesota may be your dream. It's a major step when you purchase your first property. However, there are many things you need to know about the home-buying process before you begin.

In Minnesota, a closing agent is used. That means that you'll work with a representative of the title company or your own real-estate attorney. You'll be able to close the purchase of the property alongside the seller but keep in mind that sellers might have the option to continue listing the home while awaiting the completion of contingency agreements, like inspections.

3 common commercial real estate questions

Choosing to invest in commercial real estate can be a good decision. You have the potential to have an immediate income with renters, and you have the potential for long-term gains thanks to the real estate values increasing.

There are questions you may have, though. For instance, how do you know it's the right time to invest? What kind of property would be right for you? Here's more that you can think about.

Breaches of fiduciary duty: A threat to your business

When you own a business, the last thing you want to find out is that your accountant has breached fiduciary duty. When this happens, it means your funds have been used in an inappropriate way, something that may catch you off guard and make you concerned for the future of your business.

Accountants working with business owners have a fiduciary duty to the business once the business places trust and confidence in the accountants and they are in a contract together.