Challenges and Solutions for Mortgages in Remote Areas

April 1, 2025 by Coleen TeBockhorst

Buying a home in a remote area can be a dream come true—peaceful surroundings, open spaces, and a slower pace of life. However, securing a mortgage for these properties comes with unique challenges. As a mortgage originator, I’m here to break down the hurdles and offer solutions so you can make your rural homeownership dreams a reality.

Challenges of Securing a Mortgage in Remote Areas

Limited Lender Availability
Many traditional lenders hesitate to finance rural properties due to lower housing demand, unique appraisal difficulties, and the risk of market fluctuations.
Higher Interest Rates & Stricter Requirements
Lenders may charge higher interest rates or require a larger down payment to mitigate perceived risks in remote areas.

Appraisal Complexities
Since rural properties have fewer comparable sales (“comps”), appraisers may struggle to assess an accurate market value, potentially affecting loan approvals.

Property Restrictions
Some remote homes may be off-grid, lack traditional utilities, or sit on large plots of land—factors that can disqualify them from conventional loan programs.

Accessibility & Infrastructure Issues
Lenders consider road access, emergency services, and property maintenance when evaluating loans. If a home is too isolated or lacks year-round access, it may impact eligibility.

Solutions & Mortgage Options

USDA Loans – A great option for eligible buyers in designated rural areas, offering 100 percent financing and low-interest rates.
FHA Loans – While typically used in suburban and urban areas, FHA loans can work for remote properties as long as they meet HUD requirements.
VA Loans – Eligible veterans can secure zero-down loans for rural properties, provided the home meets VA appraisal standards.
Portfolio Loans – Some smaller banks and credit unions offer in-house lending solutions for unique rural properties.
Construction Loans – If you’re building in a remote area, construction-to-permanent loans can finance both the land and the home.
Seller Financing – In cases where traditional financing is challenging, negotiating directly with the seller may be an option.

While financing a home in a remote area comes with challenges, the right mortgage strategy can open doors to your dream home. Working with an experienced mortgage professional ensures you explore all available options and secure the best possible loan.

Thinking about purchasing in a remote area? Let’s connect and discuss the best mortgage solutions for your needs.

What’s Ahead For Mortgage Rates This Week – March 31st, 2025

March 31, 2025 by Coleen TeBockhorst

With the introduction of tariffs on Tuesday, there is significant uncertainty across all sectors regarding the potential outcome. While important data releases—including the PCE Index, Personal Income & Spending, and Consumer Sentiment for the quarter—have taken place, their impact is expected to be largely overshadowed by apprehension surrounding the widespread tariff decisions.

With the upcoming release of inflation reports, including the CPI and PPI this week, all eyes will be on these two key metrics. The focus remains on tariffs and their impact on the markets, as well as inflation, which is likely to be influenced by the new tariff policies.

PCI Index

A separate measure of prices known as the core rate rose a sharper 0.4% in February, a tick above Wall Street’s forecast. The increase in the core PCE in the past year climbed to 2.8% from 2.7%. The core rate omits food and energy prices, which often jump up and down in the short run. It’s seen as a better predictor of future inflation.

Consumer Spending

Consumer spending rose a modest 0.4% last month, the government said, and rebounded from a decline in January. Economists surveyed by The Wall Street Journal had projected a 0.5% gain. Household spending is the main engine of the U.S. economy, but it appears to have sputtered in early 2025.

Consumer Sentiment

The final reading of consumer sentiment in March fell to a 32-month low, as more Americans than at any time since the financial crisis think unemployment will rise in the year ahead. The second of two readings of the consumer-sentiment survey fell to 57.0 from an initial 57.9, the University of Michigan said Friday.

Primary Mortgage Market Survey Index

• 15-Yr FRM rates saw an increase of 0.06% with the current rate at 5.89%
• 30-Yr FRM rates saw a decrease of -0.02% with the current rate at 6.65%

MND Rate Index

• 30-Yr FHA rates saw an increase of 0.03% for this week. Current rates at 6.18%
• 30-Yr VA rates saw an increase of 0.03% for this week. Current rates at 6.20%

Jobless Claims

Initial Claims were reported to be 224,000 compared to the expected claims of 226,000. The prior week landed at 225,000.

What’s Ahead

CPI and PPI are ahead next week as well as the tariffs, which are set to be in effect starting Tuesday.

Can I Get a Mortgage Without a Credit Score By Using Alternative Credit History?

March 28, 2025 by Coleen TeBockhorst

If you’ve been managing your finances responsibly but don’t have a traditional credit score, you may be wondering whether homeownership is still within reach. The good news? It is! While most mortgage lenders rely on credit scores to assess your creditworthiness, alternative credit history—like rent payments, utility bills, and other recurring expenses—can help you qualify for a mortgage.

What Is Alternative Credit History?

Alternative credit history consists of financial records that demonstrate your ability to manage debt and make payments on time, even if you don’t have a credit card or traditional loans. Some examples include:

Rent payments – A history of on-time rent payments can be a strong indicator of financial responsibility.
Utility bills – Consistent payments for electricity, water, gas, and even phone bills can showcase your reliability.
Insurance premiums – Paying for car, health, or renter’s insurance on time adds to your credibility.
Streaming or subscription services – Some lenders may even consider consistent payments for services like Netflix or a gym membership.

How Do Mortgage Lenders Use Alternative Credit?

Some lenders, especially those offering FHA, VA, and USDA loans, accept alternative credit data in place of a credit score. Instead of pulling a standard credit report, they may request documentation proving your payment history, such as:

Canceled checks
Bank statements showing recurring payments
Letters from landlords or service providers confirming on-time payments

Additionally, Fannie Mae and Freddie Mac now allow rent payments to be factored into credit evaluations when applying for conventional loans, making it easier for first-time homebuyers to qualify.

What Are the Requirements?

While each lender may have different criteria, here are some general guidelines to keep in mind:

A strong rental history – Typically, lenders want to see at least 12 months of consistent, on-time rent payments.
Three or more alternative credit sources – Having multiple payment histories helps build a well-rounded financial profile.
Stable income and employment – Lenders still evaluate your ability to afford a mortgage based on your earnings and job history.
Low debt-to-income (DTI) ratio – Keeping your total monthly debts (including the future mortgage payment) below 43% of your income improves your chances of approval.

Which Mortgage Programs Accept Alternative Credit?

If you don’t have a traditional credit score, consider these mortgage options:

FHA Loans – Backed by the Federal Housing Administration, FHA loans are ideal for borrowers with limited credit history.
VA Loans – If you’re a veteran or active-duty military member, VA loans offer flexible credit requirements.
USDA Loans – Designed for rural homebuyers, these loans allow alternative credit history for qualification.
Manual Underwriting on Conventional Loans – Some lenders offer manually underwritten loans, meaning a person (rather than an automated system) reviews your finances.

Tips for a Successful Mortgage Application

Keep records of payments – Save bank statements, receipts, and letters from service providers.
Use a rent-reporting service – Some companies, like RentTrack or Experian Boost, can help report your rent payments to credit bureaus.
Work with a knowledgeable mortgage lender – Not all lenders accept alternative credit, so finding one who specializes in this process is key.

Yes, you can get a mortgage without a credit score! By leveraging alternative credit history, demonstrating financial responsibility, and choosing the right loan program, you can achieve homeownership—even without a traditional credit report. If you’re unsure where to start, connect with a mortgage professional who can guide you through the process and help make your dream of owning a home a reality.

The Difference Between FICO Score and Credit Score: How It Affects Your Mortgage and Rates

March 26, 2025 by Coleen TeBockhorst

When applying for a mortgage, your creditworthiness plays a significant role in determining your loan approval and interest rates. Two commonly referenced terms are FICO score and credit score, which are often used interchangeably but have distinct differences.

1. What is a Credit Score?

A credit score is a broad term that refers to a numerical representation of a consumer’s credit risk. It is calculated based on various scoring models, including FICO and VantageScore, and is derived from credit report data such as payment history, credit utilization, and length of credit history.

2. What is a FICO Score?

A FICO score is a specific type of credit score developed by the Fair Isaac Corporation. It is the most widely used scoring model by mortgage lenders. FICO scores range from 300 to 850 and are calculated based on five key factors:

Payment history (35%)
Amounts owed (30%)
Length of credit history (15%)
Credit mix (10%)
New credit inquiries (10%)

3. How Do They Affect Your Mortgage?

Interest Rates: A higher FICO score typically qualifies you for lower mortgage interest rates, while a lower score may result in higher rates or loan denial.
Loan Approval: Lenders often have minimum credit score requirements, and FICO scores are a primary factor in the underwriting process.
Loan Terms: Your score can affect down payment requirements and loan programs available to you, such as conventional, FHA, or VA loans.

4. Key Differences

Scope: Credit scores can come from various models, while FICO is a specific scoring model.
Usage: Most mortgage lenders rely heavily on FICO scores for risk assessment.
Impact: Your FICO score has a direct influence on mortgage rates and loan eligibility.

Understanding the distinction between a FICO score and a credit score is essential when preparing for a mortgage application. By improving your FICO score, you can increase your chances of securing better loan terms and lower interest rates.

Navigating Mortgages as a Self-Employed Professional

March 25, 2025 by Coleen TeBockhorst

Securing a mortgage as a self-employed professional can be more challenging than for traditional W-2 employees, but with the right preparation and documentation, it is entirely achievable. Here’s a guide to help you navigate the process:

Document Your Income
Lenders need to assess your financial stability and income consistency. To do this, you’ll need to provide:
- Tax returns for the past two years
- Profit and loss statements
- Bank statements
- Client invoices or contracts
- Consistency is key, so showing steady or increasing income over time strengthens your application.
Manage Your Tax Returns
Many self-employed individuals minimize their taxable income through deductions, but this can reduce the income lenders consider when evaluating your mortgage application. It’s essential to strike a balance between tax savings and showing sufficient income for loan qualification.
Boost Your Credit Score
A strong credit score can offset some of the challenges associated with self-employment. Pay down debt, make timely payments, and avoid opening new lines of credit before applying for a mortgage.
Increase Your Down Payment
A larger down payment can make you a more attractive borrower. It reduces the lender’s risk and can help you secure better interest rates.
Work with a Mortgage Professional
Partnering with a mortgage originator who understands the unique needs of self-employed borrowers can make a significant difference. They can help you find lenders that specialize in working with non-traditional income streams.

While obtaining a mortgage as a self-employed professional may require additional effort, proper documentation, financial management, and the right guidance can help you achieve your homeownership goals.

Mortgage Interest Rates and Affordability in Minneapolis–St. Paul

March 24, 2025 by Coleen TeBockhorst

What Homebuyers Need to Know

In today’s real estate market, mortgage interest rates and affordability are two of the most important factors homebuyers in Minneapolis–St. Paul must consider. With average rates in Minnesota hovering around 6.58% for 30-year fixed loans and 5.96% for 15-year loans (as of March 2025), understanding how these rates affect what you can afford is more critical than ever. Whether you’re a first-time homebuyer or planning to refinance, this guide will help you make informed, confident decisions.

How Mortgage Interest Rates and Affordability Affect Homebuyers in Minneapolis–St. Paul

Interest rates directly impact your monthly payment and the total cost of your loan. Even a slight increase can significantly raise what you pay over time. For example:

On a $350,000 loan at 5.5%, your monthly principal and interest would be about $1,987
At 6.5%, that jumps to about $2,212

That’s a difference of nearly $225/month—or $81,000 over 30 years. With home prices in the Minneapolis–St. Paul metro area reaching a median of $340,000, higher rates are putting pressure on affordability like never before.

Why Mortgage Interest Rates Remain High in Today’s Housing Market

Several national and local economic factors are keeping interest rates elevated:

Inflation and Federal Reserve Policy: The Fed has taken aggressive action in recent years to fight inflation, resulting in higher borrowing costs.
Strong Local Demand: Minneapolis–St. Paul remains one of the most desirable housing markets in the Midwest, sustaining buyer interest even in a high-rate environment.
Limited Housing Inventory: A shortage of available homes is also keeping prices high, further compounding affordability challenges.

Smart Strategies to Improve Mortgage Affordability Despite High Interest Rates

While you can’t control the market, you can take steps to improve your mortgage affordability:

1. Boost Your Credit Score to Qualify for Lower Mortgage Interest Rates

Better credit = better rates. Aim for a FICO score of 740+ to qualify for the lowest available rates.

2. Explore Loan Types That Improve Affordability in High-Rate Markets

You may be eligible for:

FHA loans with lower down payments and flexible credit requirements
Adjustable-rate mortgages (ARMs) with lower initial rates
First-time homebuyer programs offering down payment assistance

3. Choose the Right Loan Term to Balance Interest Rates and Monthly Costs

While 15-year loans have higher monthly payments, they come with lower interest rates and long-term savings.

4. Work With a Trusted Local Lender

Local lenders often provide personalized service, quicker closings, and access to exclusive community loan programs that national banks can’t match.

Mortgage Affordability Tips for Minneapolis–St. Paul Homebuyers

In a city like Minneapolis where the housing market remains competitive, buyers need to be especially strategic. With fewer homes available and rising rates, it’s important to:

Get pre-approved before you shop
Lock in a rate as soon as you find the right home
Consult with a mortgage expert who understands the local market

Final Thoughts on Mortgage Interest Rates and Affordability

Mortgage interest rates and affordability go hand-in-hand—and right now, both are major considerations for Twin Cities homebuyers. By staying informed, improving your financial profile, and working with a knowledgeable mortgage advisor, you can still find a home that fits your budget and lifestyle.

📖 Want more expert tips? Check out our guide on Mortgage Interest Rates and Fees to dive deeper into how you can save.

📞 Ready to take the next step? Contact Coleen TeBockhorst at 612-701-8512 or visit Bay Equity Home Loans – Coleen TeBockhorst for personalized guidance.

#MortgageInterestRates #TwinCitiesHomebuyers #MinneapolisMortgage #HomeAffordability #MNRealEstate #MortgageTips

What’s Ahead For Mortgage Rates This Week – March 24th, 2025

March 24, 2025 by Coleen TeBockhorst

The previous week had the Federal Reserve making their first rate decision since the Trump administration had taken office. With many uncertainties about the current direction of things, the Federal Reserve had decided there would not be any change necessary to the current rates. Stating that the current inflation and economic conditions have largely been a result of the Trump administration’s policies on tariffs. Chairman Powell has been strongly dovish at this point, stating they would need to “see how things actually work out.” There were a slew of other minor data releases but none were far reaching in their impact on the economy and current direction of things.

FOMC Rate Decision

Faced with pressing concerns over the impact tariffs will have on a slowing economy, the rate-setting Federal Open Market Committee kept its key borrowing rate targeted in a range between 4.25%-4.5%, where it has been since December. Markets had been pricing in virtually zero chance of a move at this week’s two-day policy meeting.

Primary Mortgage Market Survey Index

• 15-Yr FRM rates saw an increase of 0.03% with the current rate at 5.83%
• 30-Yr FRM rates saw an increase of 0.02% with the current rate at 6.67%

MND Rate Index

• 30-Yr FHA rates saw a decrease of -0.13% for this week. Current rates at 6.15%
• 30-Yr VA rates saw a decrease of -0.13% for this week. Current rates at 6.17%

Jobless Claims

Initial Claims were reported to be 223,000 compared to the expected claims of 225,000. The prior week landed at 221,000.

What’s Ahead

Next week should feature a slew of data releases, most notably the GDP Estimates, S&P Global US Manufacturing / Services PMI estimates, Consumer Confidence, Consumer Sentiment (Univ. of Michigan), and Personal Income & Spending.

Mortgage Options for Non-U.S. Citizens

March 21, 2025 by Coleen TeBockhorst

Purchasing a home in the U.S. as a non-U.S. citizen is entirely possible, but the process comes with unique requirements and considerations. Whether you are a permanent resident, temporary visa holder, or foreign national, understanding the available mortgage options can help you navigate the path to homeownership successfully.

Can Non-U.S. Citizens Qualify for a Mortgage?

Yes, many lenders offer mortgage options for non-U.S. citizens. However, eligibility is influenced by factors such as residency status, credit history, and income verification. The type of residency you hold will determine the loan programs available to you and the specific documentation required.

Mortgage Options Based on Residency Status

1. Permanent Residents (Green Card Holders – LPRs)

Eligible for conventional, FHA, VA, and USDA loans
Must provide a valid green card (Form I-551) and proof of income
Access to similar loan terms and interest rates as U.S. citizens

2. Non-Permanent Residents (Visa Holders – Work & Study Visas)

Eligible for conventional and FHA loans with a valid work visa (H-1B, L-1, O-1, TN, etc.)
Must demonstrate continuity of employment and residency
Typically require a Social Security Number (SSN) or Individual Taxpayer Identification Number (ITIN)

3. Foreign Nationals (Non-Residents with No U.S. Visa)

Must apply for foreign national mortgage programs
Typically require a larger down payment (20-30%)
Some lenders accept alternative credit verification in the absence of a U.S. credit history

Key Mortgage Requirements for Non-Citizens

Credit Score: While a U.S. credit history is preferred, some lenders accept foreign credit reports or alternative proof of creditworthiness.
Down Payment: Non-U.S. citizens are often required to provide a higher down payment, typically ranging from 10-30%.
Income & Employment Verification: Lenders require proof of steady income, such as U.S. tax returns, pay stubs, or international financial statements.
ITIN or SSN: Most loan programs require a Social Security Number (SSN), but some programs allow the use of an Individual Taxpayer Identification Number (ITIN).

Best Loan Options for Non-U.S. Citizens

Conventional Loans: Suitable for permanent and non-permanent residents with a strong credit and employment history.
FHA Loans: Offer low down payment options for green card and work visa holders.
Foreign National Loans: Designed specifically for non-residents and typically require higher down payments and alternative credit verification.
Portfolio Loans: Offered by private lenders with flexible requirements but often come with higher interest rates.

Additional Considerations

Interest Rates: Rates may vary depending on residency status and credit profile.
Documentation: Proper documentation, including visa status, income verification, and bank statements, is essential.
Lender Selection: Working with a lender experienced in serving non-U.S. citizens can streamline the process.

Non-U.S. citizens can successfully achieve homeownership in the U.S. with the right mortgage strategy. By understanding your loan options, gathering the necessary documentation, and partnering with a knowledgeable lender, you can make the home-buying process smoother and more accessible.

If you need expert guidance on your mortgage options, reach out today!

Understanding Mortgage Payment Deferral Programs

March 20, 2025 by Coleen TeBockhorst

For homeowners facing temporary financial hardship, mortgage payment deferral programs can provide much-needed relief. These programs allow borrowers to pause or reduce their monthly mortgage payments for a specific period, helping them avoid foreclosure while stabilizing their finances.

What is a Mortgage Payment Deferral?

A mortgage payment deferral allows borrowers to temporarily postpone their monthly mortgage payments. The deferred payments are not forgiven but are typically added to the end of the loan term or repaid through a repayment plan.

Who Qualifies for a Mortgage Deferral Program?

Eligibility criteria vary by lender and loan type, but common factors include:

Experiencing financial hardship due to job loss, illness, or natural disasters.
Being current on mortgage payments or having a history of timely payments.
Providing documentation to support the hardship claim.

How Does the Deferral Process Work?

Application: Homeowners must contact their lender to request a deferral and provide evidence of financial hardship.
Approval and Terms: The lender evaluates the request and outlines the terms of the deferral, including the length of the deferral period and repayment options.
Repayment Plan: Once the deferral period ends, the borrower may need to make lump sum payments, extend the loan term, or increase future payments to cover the deferred amount.

Key Benefits of Mortgage Payment Deferral

Temporary Financial Relief: Helps homeowners manage temporary financial challenges without the risk of foreclosure.
Protection of Credit Score: Many programs are designed to prevent negative credit reporting during the deferral period.
Flexible Repayment Options: Lenders offer various repayment strategies to accommodate the borrower’s financial situation.

Important Considerations

Interest Accrual: Interest may continue to accrue on the deferred balance.
Impact on Loan Term: Adding deferred payments to the end of the loan may extend the repayment period.
Lender Communication: Regular communication with the lender is essential to understand the program’s terms and avoid penalties.

How to Apply for a Mortgage Payment Deferral

Contact your lender or loan servicer.
Explain your financial situation and request information on available deferral programs.
Submit the required documentation.
Review and agree to the terms provided by the lender.

Mortgage payment deferral programs can be a lifeline for homeowners facing temporary financial difficulties. Understanding the eligibility criteria, process, and potential impact on your loan can help you make informed decisions and protect your financial stability.

How Mortgage Amortization Works

March 19, 2025 by Coleen TeBockhorst

When you take out a mortgage, you commit to a long-term financial obligation. Understanding mortgage amortization can help you make informed decisions about your loan and how your payments impact your financial future.

What is Mortgage Amortization?

Mortgage amortization refers to the process of gradually paying off your loan over time through fixed monthly payments. Each payment is divided into two parts:

Principal: The portion that goes toward reducing your loan balance.
Interest: The amount paid to the lender for borrowing the money.

At the start of your loan, a larger percentage of your payment goes toward interest. Over time, as the loan balance decreases, more of your payment is applied to the principal, helping you build home equity.

How Mortgage Amortization Works

Your lender calculates your monthly mortgage payment using an amortization schedule, which outlines how much of each payment goes toward principal and interest over the life of the loan.

For example, if you take out a 30-year fixed mortgage, your payments remain consistent, but the way they are allocated changes over time. In the early years, most of your payment goes toward interest, while in later years, more goes toward reducing your loan balance.

Factors That Affect Amortization

Several factors impact your mortgage amortization schedule, including:

Loan Term: A 15-year loan pays off faster than a 30-year loan, but the monthly payments are higher.
Interest Rate: A lower interest rate means less of your payment goes toward interest.
Extra Payments: Making additional principal payments can help reduce your loan balance faster and save you thousands in interest.

Benefits of Understanding Amortization

Helps you see how much interest you’ll pay over the life of the loan.
Allows you to plan for early payoff by making extra payments.
Provides insight into how quickly you build home equity.

How to Pay Off Your Mortgage Faster

Make Extra Principal Payments: Even small additional payments reduce interest costs.
Biweekly Payments: Making half payments every two weeks results in one extra full payment per year.
Refinancing: If rates drop, refinancing to a shorter loan term can accelerate payoff.
Round Up Payments: Rounding up to the nearest hundred can shorten your loan term without a big impact on your budget.

Mortgage amortization is a key concept every homeowner should understand. Knowing how your payments are structured allows you to plan ahead, reduce interest costs, and even pay off your loan faster. Whether you’re just starting your homeownership journey or looking to optimize your mortgage, understanding amortization can help you make the best financial decisions.

« Previous Page