We’ve been looking at houses the last few weeks and I think found a house that will fit our needs.  It’s in West Bloomington.  I truly LOVE Minneapolis, but the housing situation here is pretty difficult at this junction.  The supply is pretty far out of whack with the demand, there’s not near enough of the former for the latter.

Houses are selling above asking price in many good areas of South MPLS, which is where I’d like to be.  There’s another wrinkle, FHA loans are changing after April 1st of this year such that you’ll have to have mortgage insurance on the loan for the life of the loan!  In conventional loans, you can go without mortgage insurance after owning 22% of the home through payment or appreciation.

If you do the math on that, it’s roughly $300 per month for insurance (!).  Multiply that times, say, 24 years of a loan.  $300 x 12 months per year x 24 years =  $86,400!  Needless to say, if we couldn’t get an FHA loan before April, it wouldn’t happen, you’d go with the conventional offering.

So why do an FHA at all?  There are a couple reasons.  The first is that the down payment is only 3.5% instead of 5%, which saves on cash initially.  FHA loans also have the added benefit of being assumable should you want to sell your house at a later date.  That means the remainder of money to be paid on the house would be assumed at the percentage loan and a remainder would have to be added on.  In a market like this where you see 3.25-3.5% loans, that’s a very nice benefit to selling a house.

All these facts have kept us moving very fast in terms of finding a place.  Looking in the first ring of suburbs wasn’t initially in the plan, but the amount of houses and abbreviated timeframe had us moving quickly.  We just had the place inspected, now all that really remains is an appraisal.

Exciting times.  If we do land this place, I’ll be a home owner just before I turn the big 3-0.  = )