Considered a Mid-Western state, Wisconsin is located in the north-central part of the United States and has coast line on Lakes Michigan and Superior. The state shares a border with Minnesota, Iowa and Illinois. The state is perhaps most famous for its cheese and dairy products, however, a majority of the state is not agriculturally based.
Milwaukee is the largest city in the state with Madison, the state capital, not far behind. Oshkosh, Green Bay and Appleton are all large cities and manufacturing areas located throughout the state. Wisconsin is, by far, one of the largest paper and paper product producing states in the country. Many large corporations call Wisconsin their home including Harley Davidson, SC Johnson and Company and Mercury Marine.
There are many tourist destinations located in Wisconsin. The most notable one is the Wisconsin Dells. The Dells, located in the northern part of the state, draws millions of visitors each year.
Real Estate Prices In Wisconsin
Wisconsin has not seen the same decline in home prices that many other states have seen in recent years. On average, the median home price in Wisconsin is about $210,000.00. Condos and duplex units are averaging about $180,000.00. Currently the national median price for a home is $178,000.00. Wisconsin has not seen the sharp decline in prices or drops in sales that many adjacent states have experienced.
However, homes that are priced over the $500.000.00 mark have shown a decline in sales in the state.
Popular Cities In Wisconsin
Wisconsin has many different life styles to offer its citizens. Depending on the life style you wish to lead will determine the areas that you purchase in.
Milwaukee and its metro area is the most populous part of the state. This city has many manufacturing areas and is best known for the Harley Davidson plant and the Milwaukee Brewery. Located near the state border, many people commute into Illinois to shop or work.
Madison is the state capital and contains the main campus for the university. Madison and its surrounding areas are quite beautiful with just a hint of rural living.
La Crosse is located in the western part of the state on the Mississippi River. This town is small by comparison, about 55,000 citizens, but has a long and colorful history dating back to the early 1800’s. Many new businesses have recently relocated to this area including Ace Hardware.
Green Bay is synonymous with the Packers, but offers many things to its residents besides sports. There are many meat packing and paper companies in this area. Residents of this area must enjoy snow however; the location of the city on Green Bay creates a lot of lake effect snow.
Types Of Mortgages Available In Wisconsin
Loans issued for purchasing a home or properties in the state of Wisconsin are considered mortgages. Many of the mortgages that are processed in Wisconsin are FHA backed loans. The Federal Housing Authority (FHA) offers a type pf mortgage insurance program that backs the mortgage in the event of default. This added protection allows lenders to grant mortgages to people with lower down payments or first time home buyers with confidence. USDA and VA also have programs in the state. USDA provides mortgage insurance to rural properties, while VA provides the same to veterans. All three government programs will back either conventional or adjustable rate loans.
Wisconsin is a non-recourse mortgage state. What this means is that if a mortgage defaults the lender can only assume the property for payment of the remaining balance. Former home owners are not responsible for any remaining balance on the loan that was not collected from the sale of the property. Wisconsin is one of the few non-recourse states left in America.
Mortgage Programs Available In Wisconsin
Conventional Mortgages
A conventional or fixed rate mortgage is always considered the “gold standard” of mortgage loans. This loan program offers a fixed rate of interest throughout the entire course of the loan. Conventional mortgages will carry a slightly higher interest rate than an adjustable rate mortgage, at least in the initial period. Fixed rate loans may require mortgage insurance to obtain or a slightly higher down payment. On average a conventional mortgage period will be for either 15 or 30 years, but Wisconsin allows other time frames to be offered by the individual lender. Borrowers that are planning to remain in their homes for more than 10 years will find that a conventional mortgage offers stability and is probably their best choice in mortgage programs.
Adjustable Rate Mortgage (ARM)
An adjustable rate mortgage offers a very low beginning interest rate and after a specific period of time begins to adjust upwards to meet the current market value. The most common adjustable rate program is a 5/1, which means the first 5 years are at the low, introductory interest rate and then the rates begin to adjust once a year until the end of the loan. ARM’s are a great program for people that need to have lower payments when they first purchase a home. However, the home owner must be prepared for the adjustment period that can see their payments increase significantly each year depending on the current market rates. Adjustable rate mortgages are great for people that are not planning to remain in their home for an extended period of time. Adjustable mortgages can be backed by the VA, FHA and USDA mortgage insurance.
Balloon Mortgages
Balloon mortgages are very similar to Interest Only Loans and can be very risky for the home owner. A balloon mortgage provides very low, usually interest only, payments for the first seven years of the loan. After the balloon period expires, the home owner will either see their loan convert to an adjustable rate mortgage at current market rates, or will need to pay the balance of the mortgage in full. While these low monthly payment mortgages are very tempting, they do carry a large risk. Real estate investors like these types of loans because when they purchase a property they do not intend to keep possession of that property for an extended period of time. When the investor “flips” the property they have not paid a lot into the loan and make a greater profit.
Jumbo Loans
Jumbo loans are mortgages that exceed $417,000.00 and are also known as non-conforming loans. Jumbo loans are high risk loans and will carry a higher interest rate than a standard mortgage. Many lenders will not offer Jumbo loans due to the risk factor. Most properties in Wisconsin, however, do not require Jumbo loans.
Mortgage Rates In Wisconsin
Wisconsin has not seen the trouble that many other states have seen during the recession. Mortgage rates are very stable in the state and comparative to the states surrounding the area. On average, mortgage interest rates offered in Wisconsin are comparable to the median range that is offered throughout the United States.
Mortgage rates may be adjusted to fit the type of loan that is offered and the credit history of the applicant. Applicants with less-than-perfect credit will pay a higher interest rate than those that have a higher credit score. Larger down payments and/or the purchase of mortgage insurance can help lower rates.
Mortgage rates are not regulated by the state. Borrowers will find that by investigating different lenders and home buying programs they will secure the best mortgage rates.
Some lenders will offer borrowers a chance to purchase “points” against their mortgage. Each point is worth about 1/4 of a percent of interest. On average, a lender will allow you to purchase 4 points – or reduce your interest rate by 1 full percentage point. Points must be paid for at the time of closing. Usually a point costs about $1000.00, but will vary by lender.
Second Mortgages And Refinancing In Wisconsin
Wisconsin residents will not have any trouble securing a second mortgage or refinancing their home in the state. Residents wishing to obtain a Home Equity Line of Credit (HELOC) or second mortgage simply need to apply to a lender. Second mortgage amounts will be determined by the available equity in the home and the credit file of the applicant. Those seeking a line of credit against their equity will only pay interest on the actual amount that has been used, not on the total amount available. Because a second mortgage/home equity loan is considered a higher risk, applicants will pay more for this type of loan. Wisconsin HELOC rates are very comparable to the adjacent states and are equal to the national median range.
Refinancing is available in Wisconsin and will require the applicant to succumb to the same requirements as the initial mortgage. There are closing costs involved in the process and applicants will have a choice of mortgage styles to refinance into from their current loan. Mortgage insurance programs are available for refinancing in the state and applicants can also apply for a cash-out option. Cash-out allows the home owner to access the available equity in their home when refinancing and receive a lump sum payment at closing. Refinancing is encouraged if home owners can reduce the interest rate they are currently paying.