Archive for the ‘Finance & Mortgage’ Category:

July 2007 is considered the peak of Portland real estate’s boom.  Since then, the housing market has dropped nearly 30% in the Metro area.

The way people are paying for homes has changed greatly too and that has affected the type of homes that are favored by buyers.  When mortgage money was widely available the fixer was popular: take a 80% conventional loan and then additional money, often up to or over 100% of the value of the home a second to reduce the cash-to-close of have money to make those sweat equity repairs or hire a contractor to do the work.  In July 2007, 85% of all home sales closed with conventional loans.  Thirteen percent closed with cash according to the report for Multnomah County I ran in RMLS Statistics.  There were no FHA loans and only 1% were VA.

Forward to today (actually June 2011).  Cash purchases jumped to 23%, conventional loans dropped to 50% and the typically low down (3% to start and now 3.5% down) FHA loans now makes up 21% of the payment methods for sales in Multnomah County. (more…)

Boxes packed; 72 hours from closing.  First time buyer is excited and seller is moving up to a bigger home in a location they love.  Poof!  Both deals dead over bounced checks.  We represented the seller, not the buyer.  We’d never represent both sides of the transaction as we do not do dual agency transactions.

Everyone is pretty much aware that your credit score is the initial loan qualifier for a mortgage.  A score of 740 qualifies you for the best rates and as it drops, your rates go up and then at a point you are cut off.  Debt-to-income is another factor.  You’ll supply your taxes and bank statements (and anything else they ask for).  Your mortgage broker will guide you through the process. (more…)

On October 4th, FHA rules will change regarding Mortgage Insurance Premiums collected up front and the monthly rate charged. Any FHA case number issued after October 4th will be subject to the new rules. The application for a case number takes place after there is an accepted offer on a specific property. I worked with Columbia Mortgage’s Liz Marré to put this spreadsheet together to illustrate how the changes impact a buyer.

Every scenario will be different but for this case we used a $300,000 purchase and assumed a 4.25% 30 year principle and interest loan.  Closing costs and other factors are not included.  We added a 6% interest rate column as well. (more…)

Federal Housing Administration (FHA) home loans make up 30% of all home loans; up from 3% in 2006.  Whereas a “normal” loan requires 20% down, a home can be bought with an FHA loan for as little as 3.5% down.  Defaults are up too which means they need to tighten lending requirements and fees.  As a side note it is worth mentioning that for a buyer to buy an condo with an FHA loan, the building must have FHA approval.  Owners/Home Owners Associations of condos in non-FHA approved buildings are urged to investigate what it takes to become FHA approved. (more…)

Do interest rates matter?  For quite a few years now we’ve all been hearing that “rates are at historic lows and will only go up.”  It was true then and it seems to be true now and the statement fuels the “Buy Now” debate.   I think we are better served by educating and giving the tools for the individual to make an informed decision.  Rates have bounced around but most would say that 6% is a really high rate. (more…)

The following eight are things that you need to consider before listing your home for sale if you are delinquent on your mortgage payment.  The list is from a Prudential Northwest Properties’  disclosure.  There are some serious ramifications to some of the options which is why “you may need the assistance of an attorney” shows up so often. (more…)

I mentioned in this morning’s post that interest rates are low.   Google has a Mortgage Comparison search engine which is interesting, if not somewhat misleading.  Note that the image does not mention ads but the url is: https://www.google.com/comparisonads/mortgages. I’ve found it listed as both a sponsored link and a separated result between the sponsored and organic results.  I am not a fan of Internet mortgage companies and we do usually advise our clients to work with a local bank or mortgage broker [Prudential Northwest Properties owns Columbia Mortgage].  The results are instructive though. (more…)

NPR’s This American Life program was titled “Return to the Giant Money Pool this weekend.”  It is a 58 minute podcast that can be streamed for free through this week.  Then it will be available in the archives.  I got to listen to about a quarter of the show live yesterday and will go back to catch up on the rest. (more…)

When the mortgage market collapsed fixed rate jumbo loans disappeared.  Adjustable Rate Mortgages (ARMs) have been available but at very high rates.  When looking at the Market Tracker graphs on PDXBuyers.com it doesn’t take long to see that the market typically financed by the jumbo loan market has been hit harder than the conforming market.  That’s starting to change.  I met with Scott Kirkland of Team Kirkland Home Loans on Wednesday and he explains: (more…)

I stuck my head into the office of Columbia Mortgage’s Shawn Headlee this afternoon. Mainly thinking of myself and that maybe a refinance might be worth investigating. It would be if we were not in a jumbo mortgage situation. He says that rates on jumbo mortgages (over $417,000) haven’t shifted much so no dice for me.

On the other hand, one of our clients that he is working on the loan for got a lower rate than previously locked for free! Things have changed drastically in the mortgage market in the last few days. The refi market may suddenly reappear. Too little too late? Won’t matter, market is toast? Just what the doctor ordered? (more…)