Best Places to Live

Minnesotans often claim superior quality of life as compensation for six-month-long winters. But it also happens to be true: By any non-meteorological measure, the Twin Cities are hot. The metro boasts 30 Fortune 500 companies, a thriving arts scene, numerous colleges and universities, and abundant opportunities for outdoor recreation. Plus, lots of great places to live. Here we spotlight the communities acknowledged to be supremely livable, as well as some of our lesser-known gems.

MINNEAPOLIS

Bryn Mawr

2009 MEDIAN SALES PRICE: $345,000**
GREEN SPACE: 650 acres of parks, lakes, and trails
RATIO OF NEIGHBORHOOD FESTIVALS TO RESIDENTS: 1:543

If you like biking to work, hiking urban trails, living within shouting distance of the city lakes, check out the more affordable side of Minneapolis’s Calhoun Isles neighborhood. Tucked between Glenwood to the north and Cedar Lake to the south on the western edge of downtown Minneapolis, Bryn Mawr is one of the city’s best-kept secrets, and so charmingly burnished by its residents that Cottage Living magazine named it one of the top 10 “cottage communities” nationwide a couple years ago.

Composed (naturally) of cottages, mostly pre­–World War II bungalows and Tudors, plus a smattering of 1½-story post-war homes—nearly uniformly encircled by tidy yards and gardens tended to a fare-thee-well—Bryn Mawr bills itself as a neighborhood within a park. Rightfully so: It’s literally surrounded by Theodore Wirth Park, Bassett Creek Park, Bryn Mawr Meadows, and Kenwood Park.

Bisected by Interstate 394, the area still manages to hold onto a small-town esprit de corps that’s as unexpected as it is appealing. The activist Bryn Mawr Neighborhood Association sponsors events such as the annual “Festival of Garage Sales,” wherein hundreds of residents reserve a springtime weekend to hawk used stuff, drawing bargain hunters by the thousands to the neighborhood. Every-other-year garden tours show off the neighborhood’s loveliest yards and raise money to beautify “Downtown Bryn Mawr,” the intersection of Penn Avenue and Cedar Lake Road. The diminutive business district includes quirkily outstanding home-accessories shops Nola Home and Cockadoodle Doo. With downtown Minneapolis roughly three minutes away by car and St. Louis Park’s new West End five minutes in the opposite direction, shopping, dining, and entertainment is never far.

 

Downtown/ North Loop

2009 MEDIAN SALES PRICE: $291,100**
DINING/ENTERTAINMENT: Top-shelf
NEWEST ATTRACTION: Target Field

There are few better ’hoods than the North Loop for thirtysomething Power Singles (high income, highly educated), Ramen Metros (urban singles sans high incomes), or downsizing baby boomers. Homes run to lofty open spaces in renovated warehouses with concrete floors and exposed brick. From its gritty industrial past, the North Loop has morphed into a residential neighborhood with the city’s hottest nightclub scene.

Residents walk to work (through skyways come winter) or just settle in with laptops at any one of a half-dozen independent coffee joints in the neighborhood. Corner Coffee offers lattes and a lot more, including an annual “lunch is on us” that served 700 last year. On the patio at Cuzzy’s Bar in dog-friendly North Loop, everybody will know your name (or at least your dog’s name). Great dining abounds—Sapor Café/Bar, Toast Wine Bar & Cafe, Be’Wiched Deli, and Bar La Grassa, to name a few. Groceries? Minneapolis Farmers’ Market in the summer and Lunds just across the river all year round. Then there’s the new kid in the neighborhood: Target Field, which now dominates the skyline and is guaranteed to increase community cachet, and probably property values as well.

 

Prospect Park

2009 MEDIAN SALES PRICE: $257,200**
NEIGHBORHOOD ICON: Hill Top Water Tower
RENTERS + HOMEOWNER = Diversity

As neighborhood lore has it, Bob Dylan immortalized Prospect Park’s distinctive “Witch’s Hat” in “All Along the Watchtower,” a landmark clearly visible from his Dinkytown digs. You’ve no doubt seen it, too, from Interstate 94 or University Avenue, even if you’ve never troubled to explore the neighborhood’s winding, tree-lined streets. It’s worth a detour—if for no other reason than the area claims the largest percentage of architect-designed homes in Minneapolis, including one by Frank Lloyd Wright. No two houses are alike, with early modernist homes and a few 1880s Victorians sprinkled in among gracious brick, stucco, and vine-covered residences that date to the first half of the 20th century.

The neighborhood truly is—in that overworked real-estate agent’s phrase—a hidden gem. Wedged between the University of Minnesota and the Mississippi River, its quiet streets and shady dignity seems worlds removed from the urban hustle just a stone’s throw away. Even so, Prospect Park is a diverse and politically active area. From Tower Hill Park on University Avenue to the river, residents are mostly homeowners and retired empty nesters. A rich blend of rental properties among the single-family homes, as well as student housing, attracts a demographically and ethnically diverse mix.

Nearby Dinkytown, Stadium Village, University Avenue, and Midway businesses ensure shopping, dining, and drinking venues galore. The neighborhood’s own Signature Café, a tiny eatery hidden away on a sedate, tree-lined street, overflows with neighborly ambiance and good eats.

 

Fulton

2009 MEDIAN SALES PRICE: $344,600**
SCHOOLS: Top props in the city
DESTINATION SHOP: Gallery 360

 Just south of trendy (and more expensive) Linden Hills is Fulton, a community with its own special charms. Bordered by Minnehaha Creek, 47th Street, and France and Penn avenues, and snuggled up to Lake Harriet’s southwest corner, Fulton’s amenities draw families looking for an in-the-city neighborhood with gracious livability. Schools are another major attraction: Lake Harriet Community School provides an intimate setting for kindergarten through second grade at its Lower Campus at 40th and Chowen; grades 3–8 are at the Upper Campus at 49th and Vincent. Nearby Southwest High School earns kudos in academics, arts, and sports, and is one of a handful of city schools that placed on Newsweek’s 2009 list of top American public schools (#231, which is more impressive than it looks, considering this list ranks only the top 5 percent of public schools). 

Fulton’s well-seasoned housing stock, built mostly in the ’20s and ’30s, is a pleasing mixture of Craftsman bungalows, 4-Squares, Dutch Colonials, and even a smattering of Spanish Revivals close to Minnehaha Creek and Lake Harriet. Most homes are meticulously maintained and many have been (or are in the process of being) remodeled with such 21st-century amenities as gourmet kitchens, mudrooms, and owners’ suites.

Lake Harriet, Minnehaha Creek, and Pershing Park provide plenty of green space, though Fulton’s pleasant residential streets are themselves park-like in summer. Regular commercial intersections—50th and France, 44th and France, Linden Hills, and 50th and Penn—frame the neighborhood, keeping retail, restaurants, and services handy, yet unobtrusive. Delightful local cafés include Broders’ Pasta Bar and Cavé Vin. At the center of Fulton, at 50th and Xerxes, is a treasure trove of quaint shops. That’s where you’ll find Michael’s Lamp Studio (and a huge selection of lamps), Gallery 360 (artwork and jewelry), Hunt & Gather (antiques), and Xylos (fine, custom wood furniture and accessories).

 

Ericsson

2009 MEDIAN SALES PRICE: $225,000**
SECRET CHARM: Sunset view over Lake Hiawatha
HIPSTER INDEX: 10, especially for cyclists

If you fancy living in the city and within a long slice of a golf course, put Nokomis’s Ericsson neighborhood on your radar. Lake Hiawatha and its surrounding park, a 241-acre recreation area that offers swimming and cross-country skiing, is one of only a handful of 18-hole golf courses in the city limits.

Bordered by East 42nd Street, East Minnehaha Parkway, and Cedar and Hiawatha avenues, Ericsson features lovely walks and biking paths. Ride along the parkway to Minnehaha Falls, just across Hiawatha Avenue, or mosey up the hill at the southeast corner of Hiawatha Park for a great sunset view. The homes here are solid citizens, mostly pre-1940, single-family residences that pay homage to an era defined by Craftsman quality. The handy retail area along Cedar includes Hudson’s Ace Hardware store—where that mysterious piece of a 70-year-old faucet is no mystery to the guys who work there—and newcomer Angry Catfish Coffee and Bike Shop—where hipster cyclists and coffee snobs meet. Dining runs to comfort food and neighborhood pubs. But that can be outstanding: Colossal Café, home of the famous Flapper pancake, and A Baker’s Wife’s Pastry Shop. Just down the block, Buster’s on 28th serves up a good selection of local microbrews, along with excellent eats. If an ice cream is more to your liking of a summer evening, stop in at Grand Ole Creamery on 47th and Cedar for a decadent scoop of Black Hills Gold in a handmade, hand-rolled, malted waffle cone.

Thanks to the Hiawatha line, easy public transportation is now a hallmark of Ericsson. Downtown Minneapolis, the Mall of America, and the airport are each roughly 15 minutes from the 46th Street LRT station.

 

 

ST. PAUL

Crocus Hill

2009 MEDIAN SALES PRICE: $206,250*
HIDDEN CHARM: Bluff-top views of the High Bridge and downtown St. Paul
SHOPPING DESTINATION: Grand Hand Gallery

Part of the Summit Hill neighborhood, this pedestrian-friendly enclave nestles close to downtown and overlooks the Mississippi River. Technically defined by Summit and St. Clair avenues to the north and south, and Dale Street and Lexington Parkway to the east and west, Crocus Hill is as much a brand—much like Kenwood in Minneapolis—as it is a neighborhood. The lovely turn-of-the-century-or-earlier mansions, spacious wood-frame houses, row houses, and apartment buildings—as well as the occasional incongruous mid-century home—give it a demeanor all its own. Some of the prettiest parts of Crocus Hill are along the bluff, where little streets like Crocus Place end with cool views of downtown and the river.

Despite incursions of national chains and franchise restaurants, homegrown still predominates on nearby Grand Avenue. The sublime Grand Hand Gallery took over a former massage parlor and created a stylish venue for artisan wares, as well as regular openings and events for artists. Just down Grand is Barbary Fig, a Moroccan restaurant that is the epitome of funky, serving North African cuisine in an old house evocative of sun and sea.

The neighborhood hosts celebrations throughout the year—Grand Old Day welcomes summer, Boo Bash celebrates Halloween, and Paws on Grand pampers pets with treats and photo ops—all of which keeps this community lively and involved.

St. Anthony Park

2009 MEDIAN SALES PRICE: $244,600*
ARCHITECTURAL TIME CAPSULE: University Park
SUMMER HIGHLIGHT: Walk to the Minnesota State Fair

Near the geographic center of the Twin Cities, close to Interstate 94, Highway 280, and University Avenue, St. Anthony Park was planned as a suburban addition to St. Paul and Minneapolis. Although the lots aren’t as large as the country estates originally envisioned, the area still features curving streets and a park-like setting. The architecture is diverse, ranging from historic Victorians to contemporary homes. University Park is a small enclave between St. Anthony Park and Falcon Heights that was founded by the University of Minnesota for faculty-and-administration housing in the late 1920s. It’s a tour de force of 20th century residential architecture, with the work of Edwin Lundie, Winston and Elizabeth Close, and Ralph Rapson represented.

Nearly half of St. Anthony Park’s residents are renters, not surprising given its proximity to the U of M’s St. Paul campus and Luther Seminary; homeowners tend to be highly educated and prosperous professionals. The resulting diversity gives the area a charm and eccentricity all its own. How many neighborhoods urge you to buy local or have a grass-roots organization like St. Anthony Park Neighbors for Peace?

Neighborhood retail area Milton Square on Como Avenue houses Muffuletta, the ever-popular bistro where regulars cozy up with foodies to dine on one of the best patios around. Also nearby are Bungalow Pottery, Micawber’s bookstore, and the Bibelot Shop.

 

‘BURBS

St. Louis Park

2009 MEDIAN SALES PRICE: $212,500*
SOLID VALUE: Home prices dipped just 6 percent since 2004
RETAIL-TO-COME: West End

This first-ring suburb has more going for it than a quick drive-through or A Serious Man might suggest. Remarkably stable housing prices for one thing: median prices have barely bobbled in the past five years—outstanding performance in this market. Blocks of post-war Cape Cods in the central Texa-Tonka area are just part of the picture in St. Louis Park. First-time homebuyers find plenty to choose from in these compact homes, while gracious-but-not-ostentatious Minikahda Vista, Westwood Hills, and other neighborhoods appeal to move-up buyers.

St. Louis Park’s schools, considered Schools of Excellence by the U.S. Department of Education, are a magnet for younger families. Another attraction: One elementary school offers Spanish immersion.

Excelsior on Grand, the city’s recent re-creation of an “urban center,” in which residents live, work, eat, and shop in close proximity, has paid off in boosting nearby retail despite complaints about parking. Trader Joe’s, Max’s, OPM, and the Guild are just a few neighborhood retailers. St. Louis Park also scored a new lure, the Shops at West End. Though ill-timed recession-wise, it’s already home to hot restaurants Crave and Cooper, Rainbow Foods, and a spanking new Showplace Icon movie theater, which sports reserved seats and serves food and drink. More shops are following suit, despite the economy.

 

Plymouth

2009 MEDIAN SALES PRICE: $252,500*
TOWNS WITHIN THE TOWN: City of Medicine Lake (year-round); Art Shanty Town (each January)
SEASONAL HIGHLIGHT: Music in the Park

Plymouth, home to many a cul-de-sac, is not just a quintessential bedroom/commuter ’burb: Nearly a quarter of the 70,000-plus residents live and work in Plymouth. That’s one reason the suburb 15 miles northwest of Minneapolis ranked #1 on Money magazine’s 2008 “Best Places to Live” survey. Others include reasonable home prices, one of the top school districts in the state, and numerous outdoor amenities, including the Hilde Performance Center, a band shell that hosts Music in the Park. The annual pre–Fourth of July concert, starring the Minnesota Orchestra, ends with some of the best—no kidding—fireworks in the state.

Even in a town that’s all chain restaurants all the time (we’re hard-pressed to name one that’s not represented), a few independent places are hidden away in strip malls: Latuff’s (an area institution for more than 30 years wherein pizza reigns) and Jake’s City Grille. And then there’s Cowboy Jack’s, where happy hour (two each day) and Country Western rules.

But don’t go to Plymouth for the restaurants, go for the parks. Clifton E. French Regional Park wraps around the north shore of Medicine Lake and offers 310 acres of trails for hiking, biking, cross-country skiing, and snowshoeing; picnic and play areas; and a boat launch, swimming beach, and fishing pier. Plymouth boasts 68 miles of trails or designated bike routes, as well as the end of the Luce Line Trail System. Another paved trail winds around most of Parker’s Lake, the center of another city park along County Road 6.

Most Plymouth homes have been built since 1980, as the city expanded west of Medicine Lake, and feature de rigueur suburban amenities such as double garages and deep lots on quiet well-kept streets. But there are a few surprises: the City of Medicine Lake, for example, is a tiny enclave within Plymouth of just 368 residents and 165 households on a peninsula that juts out into the lake. There’s also the Art Shanty Town that materializes on Medicine Lake each winter, created by local artists for the entertainment and edification of well-bundled and adventurous visitors.

 

Chanhassen

2009 MEDIAN SALES PRICE: $285,500*
HIDDEN CHARM: 1:588
SHOPPING DESTINATION: Paisley Park Studios and Prince

Chanhassen, home of the University of Minnesota’s Landscape Arboretum and Chanhassen Dinner Theatres, added another claim to its fame this year when it ranked #2 on Money magazine’s 2009 “Best Places to Live” survey. It has also earned kudos as a great place for families—Family Circle magazine ranked Chanhassen in 2007 as one of the 10 best cities in the country to raise a family. Not too surprising, since Chanhassen has a strong sense of community; low living costs, crime rates, and commute times; and wonderful educational and recreational opportunities.

The city of 20,000-plus residents has grown rapidly in the last 10 years (nearly 20 percent of the housing stock was built in the past decade). Area homes are new and they’re big, with an average of 3,121 finished square feet. Chanhassen boasts 11 lakes, and we’re not talking ponds: Lake Minnewashta, Lake Lucy, Lake Ann, Lake Susan, and Lotus Lake provide plenty of lakeshore and the full smorgasbord of Minnesota recreational opportunities. The city’s 34 parks supply acres of public green spaces. And let’s not forget its most famous park: Paisley Park Studios, Prince’s local recording complex. It also boasts several handy golf courses, with the award-winning Hazeltine in nearby Chaska.

Chanhassen is partly in Hennepin County, but mostly in Carver—the fourth healthiest county in the state, according to a recent survey. Downtown Chan maintains a certain small-town charm, but also offers easy access to Byerly’s, Target, Lakewinds Natural Foods, and, of course, the legendary Chanhassen Dinner Theatres.
 

 

 (‘BURBS CONT.)

Edina

2009 MEDIAN SALES PRICE: $324,950*
METRO SHOPPING MECCA: France Avenue
WAYWARD NEIGHBORHOOD: Morningside

Edina, the first-ring suburb just to the south and west of Minneapolis, has so much to recommend that we can start anywhere: The gracious neighborhoods, outstanding schools, thriving retails areas, easy transportation access, sterling city services, and a booming corridor of health-care providers. It’s also one of the only areas in the metro in which median home values have actually increased (albeit by 1 percent) since 2004. When most others—even our best places to live—have decreased anywhere from 20 to 3 percent, that’s one more indicator that Edina is, indeed, the gold standard of Twin Cities neighborhoods.

It is a prosperous place, though some neighborhoods are relatively affordable; others—the posh Rolling Hills, for example—not so much. Morningside holds the distinction of being the only village (far as we know) to secede from its mother town (Edina), only to rejoin it 46 years later. Judging from the dumpsters sprouting along some Edina streets, residents love updating and remodeling their homes.
Young families covet the excellent schools: Edina has the top graduation rate in the state (97 percent of seniors go on to college) and ranked #111 on Newsweek’s top public-schools list. It has three elementary schools, one of which is French immersion. No wonder when Family Circle magazine put Edina on its 2009 list of “Best Towns for Families,” it gave the schools a 10 out of 10.

Bloomington has the Mall of America, but Edina not only invented the covered shopping mall—Southdale, the country’s first, opened in 1956—it refined the idea. Edina’s shopping mecca now continues down France Avenue, with the Galleria’s collection of 50-some mostly luxe shops, Yorktown Mall, and Centennial Lakes Plaza. Downtown Edina, the immaculately groomed 50th and France area, draws residents as well as urbanites to its movie theater, specialty retailers, and restaurants.

 

Excelsior

2009 MEDIAN SALES PRICE: $330,000*
GENERAL AURA: Almost seaside
THEMED B&B: Birdhouse Inn & Gardens

Drive down Water Street into the heart of Excelsior on Lake Minnetonka, and you can almost imagine you’re someplace like Nantucket, circa 1970 maybe. Boats bob at the municipal docks and buoys, large excursion boats load up riders, and the restored steamboat Minnehaha chugs across the lake to Wayzata. Just 30 minutes west of Minneapolis, Excelsior’s downtown remains picturesque without crossing that line from charming to precious. Water Street, the main drag, bustles with boutiques selling everything from perfume and jewelry to consignment clothing and antiques. In amongst lovely little shops are perfect places to stop for a bite or a drink. Or California rolls at Yumi’s Sushi Bar. Or an ice cream at Licks Unlimited.

The compact town (about one square mile) is home to about 2,400 residents. Comfortably aged cottages, tucked back in narrow streets that wind away from the lake, give the whole place the vacation ambiance of an era when vacation meant months at the shore. The homes, more than 60 percent of them built before 1940, tend to be cozy clapboards. More recent construction usually maintains the cottage vibe and includes townhouses and condos built near the lake. Kids attend Excelsior Elementary through fifth grade, and then go on to middle and high school in the highly ranked Minnetonka Public School system.

Founded in 1853, Excelsior is proud of its history, but has also embraced the new. The waterfront site of the old amusement park, torn down in 1973, now holds condominiums and two popular restaurants, Maynard’s and Bayside Grille. Just a short stroll from Water Street is the Commons, the park where a swimming beach, playground, tennis courts, baseball diamonds, and picnic area draw hundreds of visitors every summer weekend. 

 

Woodbury

2009 MEDIAN SALES PRICE: $239,000*
DOWNTOWN’S HEART: An indoor park
WITHIN A 10-MINUTE DRIVE: Wisconsin fireworks

Woodbury lays claim to being one of Minnesota’s fastest growing and most livable towns, with hundreds of miles of multi-use trails and 3,000 acres of parkland. Home to 58,000 residents, the city boasts 40 parks—including a unique indoor park in the heart of Woodbury. This “city center” park links the Washington County Library and the YMCA, and hosts community events for everyone from kids to seniors.

The municipal golf course, Eagle Valley, opened in 1998. Woodbury also operates the Bielenberg Sports Center, which houses two indoor ice arenas and a field house with a walking/running track. The outdoor complex includes softball/baseball fields, picnic facilities, play equipment, a sand volleyball court, and five miles of winding trails. Eight small lakes pepper this St. Paul ’burb, and most are on public parks and pathways.

Woodbury attracts young families drawn to its reasonably priced housing and planned communities. Dancing Waters and Stonemill Farms, for example, provide swimming pools, gardens, playgrounds, and putting greens for residents, as well as single-family and row homes. Just minutes from 3M—one of Minnesota’s largest employers—and the St. Croix River Valley, Woodbury’s proximity to Interstates 94, 494, and 694 gives it easy access to the east side of the metro. But residents don’t have to leave town to shop: Woodbury Lakes outdoor mall has more than 50 retailers, including an Aveda Day Spa and Trader Joe’s.

 

Stillwater

2009 MEDIAN SALES PRICE: $209,000*
RATIO OF RESIDENTS TO ANTIQUES DEALERS: 60:1
LUMBER BARONS’ FORMER LAIRS: 3

Known as Minnesota’s birthplace, historic Stillwater makes the most of its vintage charms. Victorian homes hold pride of place on the steep hills overlooking the town’s five-block-long Main Street and the St. Croix River. The aged beauties include more than a half-dozen bed-and-breakfast inns and former lumber-baron manses, all restored to their gilded glory. Stillwater preserves its identity through the Stillwater Heirloom and Landmark Sites, which protects its historic neighborhoods. Outside downtown and north and south along the river, homes of more recent vintage come in a range of sizes and styles. The St. Croix is designated a Scenic Waterway, and both Minnesota and Wisconsin take pains to make sure the shores don’t get overly developed.

Stillwater is a river town at heart, and much of its summertime action takes place on the St. Croix or in Lowell Park on its banks. The park hosts music, food, and outdoor movies on Tuesday evenings; spring and fall art fairs; and the big summer festival, Lumberjack Days (yes, it includes log rolling).

The usual big-box retailers and chain restaurants hold sway on the outskirts of town, but Main Street’s antique shops, boutiques, and restaurants give Stillwater its character. Antiquers love Stillwater, but shoppers can also find rare books at St. Croix Antiquarian Booksellers, kitchen items galore at Chef’s Gallery, and fun clothes and accessories at Stella and Collaborations. Food and wine lovers don’t need to leave town to dine well—not with options such as The Kitchen (brasserie-inspired comfort food) and Marx Wine Bar and Grill (small and  crowded, but worth the wait).

Despite the hoards that descend during summer and fall weekends, Stillwater maintains its small-town feel and historical character. It offers the convenience of living near the Twin Cities and great schools, another reason the area has grown almost 20 percent since 2000.

 

Prior Lake

2009 MEDIAN SALES PRICE: $234,700*
FAST GROWTH: Population increades by 50 percent since 2000
MAJOR ATTRACTION: The lake

Prior Lake, once a sleepy small town south of the Minnesota River, has become a booming community of about 24,000. Just 18 miles south of Minneapolis, Prior Lake’s hilly serenity offers more than a typical flatland suburb. Much more: 50-plus parks on 900 acres of land, 100 miles of trails, sidewalks, and 14 lakes. At the center of town—and its chief attraction for residents and visitors alike—is Upper and Lower Prior Lake, the largest lake south of the metro.

Much of the housing stock is relatively new, with 35 percent of homes built since 2000. The largest employer in the county is Shakopee Mdewakanton Sioux Community, which owns Mystic Lake Casino, Little Six Casino, restaurants, a fitness club, and hotel. With five golf courses within the city limits and a streetscape-improvement renovation completed in 2004, Prior Lake’s beauty extends beyond the natural. Locally owned Edelweiss Bakery sells yummy breads and pastries.

The Mall of America is just a 20-minute drive, as is the airport. Transportation to downtown Minneapolis is available by express-bus servicers Laker Lines and BlueXpress. (The commute on coach buses is about 40 minutes.) Kids attend Prior Lake/Savage schools. With a 97 percent graduation rate and a teacher-student ratio of 1:18 at Prior Lake Senior High School, this town gets top marks in education as well.
 

 

Mortgage Madness

Talk about extremes: In 2006, lenders were falling all over themselves to hand out mortgages. Today, even good credit risks can be out in the cold.

Just how tough is it to get a mortgage? We asked Alex Stenback (right), a mortgage banker with the Residential Mortgage Group in Minnetonka.

What does it take to qualify for the best mortgage-interest rates today?
 
Most lenders are looking for a credit score of 740 or above. If you have a 725 score, you can still get the same rate as someone who’s at 740, but you’ll usually need to pay “points” up front to do so, often a quarter of the loan amount.

Debt-to-income ratio standards also have changed. A few years ago, you could be  approved for a conventional loan with a ratio upwards of 55 percent. Now it’s almost universally limited to 45 percent. Income documentation also has become more stringent.

Are banks also requiring larger down payments?
Down-payment requirements have gone up, but it is still possible to purchase a home with as little as 3 percent down for a conventional mortgage.

Are FHA loans, historically designed for first-time buyers, growing more restrictive as well? 
These loans will be more expensive as of April 6, 2010. To offset the losses the FHA has experienced, mortgage-insurance premiums are going up [from 1.75 percent to 2.25 percent of the loan amount]. But FHA loans remain a good option for first-time homebuyers and others. The down-payment requirement is just 3.5 percent—as long as you have a credit score of 620 or above. Allowable seller-paid closing costs are being reduced from 6 percent of the purchase price to 3 percent.

Has it become more challenging for entrepreneurs and the self-employed to get financing today? 
Banks look for two years of tax returns from these groups, which they usually average. What has gone away are the mortgage options in which income isn’t fully documented, such as the low-documentation, no-doc, and other exotic products.

Are tighter lending standards here for the long haul? 
As long as delinquencies and foreclosures stay at the same levels or rise, lending will get tighter before it loosens. That said, there is still plenty of hope for those who don’t qualify as ideal borrowers—as long as you have the income to support the loan amount.

 

 

 

10 Best Home Improvements

Remodeling is expensive and a hassle. But it’s all worth it—if you get the most bang for your buck.

All remodeling decisions lead directly to the age-old dilemma: To be pragmatic or… not. According to Remodeling  magazine, these are your best bets for recouping remodeling investments:

1. Siding is Sexy

No, it’s not as much fun as adding a glass-enclosed, walk-in shower to your owner’s bath, but fiber-cement siding replacement is a better investment.
Average Cost: $14,019
Average Recoup: 94%

 

2. Kitchen Facelift

Add new cabinetry, faucets, tile, or countertops to make your kitchen more livable and improve odds of a fast sale.
Average Cost: $23,757
Average Recoup: 83%

 

3. Space Invaders. 

Converting existing space is almost always cheaper than adding new, and pays dividends upon resale. Instead of an addition, consider transforming a sizeable attic into another bedroom or remodeling an unfinished basement.
Average Cost: $64,520
Average Recoup: 74%

 

4. Pane Relief

New wood windows not only look great, the most energy-efficient varieties save on heating bills and provide green bragging rights. Federal tax credits also are available for qualified replacements.
Average Cost: $21,635
Average Recoup: 70%

 

5. Welcome Home

A new entry door improves your home’s curb appeal to visitors, as well as potential buyers—especially if you replace a humdrum entry door with, for example, a custom fiberglass version with dual sidelights.
Average Cost: $9,046
Average Recoup: 65%

 

6. Inside Out

A deck gives a home a seasonal outdoor room, singularly appealing to Minnesotans after long, cold winters. A 16-by-20-foot deck made of composite material adds livability and value.
Average Cost: $41,822
Average Recoup: 63%

 

7. Kitchen Aid

Major kitchen remodels remain attractive home-improvement projects, both for livability
purposes and to keep pace with comparable homes
when selling.
Average Cost: $123,396
Average Recoup: 6%

 

8. Dream On

Owner’s suite additions aren’t as common as they once were, given diminished home values and equity lines. But if you intend to stay in your home five years or longer—and you’ve always dreamt of a new sleeping haven with custom bookcases, a high-end fireplace, a large glass-enclosed shower, two custom sinks, and walk-in
closets—the investment may prove priceless.
Average Cost:  $269,730
Average Recoup: 56%

 

9. Water Works

Bath remodels remain a good bet because they are small, relatively affordable projects with good payback—that includes “soft” remodels that upgrade tile, sink fixtures, and vanities, as well as dream spas with Jacuzzis and skylights.
Average Cost $61,136
Average Recoup: 54%

10. Spa’s the Limit

A bathroom addition won’t generate quite the payback that a bath remodel will, thanks to a higher average cost. But if selling is your end game and your home is one bath short compared with competitors, the investment may be well worth it.
Average Cost: $92,380
Average Recoup: 48%

 

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