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Archive for the ‘Misc’ Category

What Lenders Look for in Home Loan Applications

Once your loan application is filled out and sent to the lender for review, the first thing they will look for is your ability to pay back the loan you are requesting. My team and I have a streamlined loan process to help you get your ducks in a row prior to this review. A grand slam loan package is in perfect order and answers all the important questions up front. We know what the lenders are looking for, based on long-term relationships with them and extensive knowledge of guidelines for a multitude of loan programs that are available today.

What is the lender looking for when they review the loan application?

The lender wants to know about your personal financial picture, including savings and credit history and your employment stability. The co-borrower’s history is also taken into consideration. The lender also considers the loan amount and appraised value of the home you are looking to purchase. Not every applicant is approved the first time through the process. If the underwriter has any questions or concerns, he or she will require certain conditions be met before they approve the loan. Pre-approval prior to house hunting lets you know exactly how much you are qualified to borrow in advance.

What can I do on my end to make it easier?

Before taking out a home loan it helps to establish a consistent record of paying your bills on time. If you have utility bills that are overdue, bring these up to date. Make sure you are paying credit card installments in a consistent and timely manner.

We can help you evaluate your debt-to-income ratio to determine what mortgage payment will be comfortable and affordable for you on a monthly basis. Aim for having enough savings to cover your down payment, closing costs if necessary, and two month’s expenses in case of emergency. We’ll help you find the loan program that works for you.

If I just started a new job six months ago, can I still apply for a loan?

A stable employment history is important, but the lender does take human factors into consideration. If you’ve recently completed college or vocational training, or were released from the military, you have good cause to have a lack of consistent work history. If your profession is seasonal, and gaps in employment are normal in your field, there are loan programs that can work with your situation. If you are a freelancer or do contract work, the lender will look for consistency in income over the last two years. Also, if you recently changed jobs in the same line of work, this would be considered stable, consistent employment.

Consistency is the key word in the lender’s mind. But know that lenders have developed many different loan structures to meet the needs of the general public. When your grandparents bought their first home, they probably put 50% down and made a lump sum payment when the note was due. Times have changed, and so have loan programs. My team and I stay on top of current mortgage trends. We monitor rates daily and have a support network of Realtors®, CPAs, Financial Planners and Credit Repair Consultants to lend you additional assistance.

Call me directly for a free consultation. 503.931.4490 We can help!

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Buying a new Home?

Getting Ready to Move? Here’s a Checklist!

4 WEEKS PRIOR TO MOVE:

__ Set up a “move” file or folder
__ Set up a “move” calendar.
__ Have a garage sale.
__ Collect financial, tax and employment documentation needed for your loan.
__ Donate un-needed furniture to charity.
__ Contact insurance company to transfer policies (life, auto, homeowners).
__ Contact doctors, dentists for copies of medical records.
__ Contact schools for copies of student records.
3 WEEKS PRIOR TO MOVE:

__ Review tax deductions on moving expenses.
__ Arrange cut-off date for utility companies (telephone, gas, electricity, water, garbage, cable television).
__ Call friends and relatives to let them know you are moving.
__ Request change of address kit from post office.
__ Check out voter registration information for the new area.

2 WEEKS PRIOR TO MOVE:

__ Transfer stocks, bonds, bank accounts and contents of safe deposit boxes.
__ Prepare a list of clothing that will not be packed with household goods.
__ Take time to check off previous listed items while you still have time!

1 WEEK PRIOR TO MOVE:

__ Label items you will need to access easily and place them in separate room or closet.
__ Clean out your refrigerator and let it air out at least 24 hours before moving.
__ Drain outdoor equipment: Water hoses, propane tank from BBQ grill, gas and oil from lawnmowers.
__ Discard all aerosols, paint, oils, and other flammable or toxic chemicals.
__ Schedule with utility companies to have utilities turned on at your new home.

MOVING OUT DAY:

__ RELAX!!!
__ Remember, items packed last will be unloaded first.
__ Conduct a final review of the house, including attic, stairwells, closets, cupboards, storage, garage, and behind doors.

MOVING IN DAY:


__ Have the house ready for delivery prior to the truck’s arrival.
__ Take a break, sit back, relax and ENJOY YOUR NEW HOME!!

Take the stress out of moving by being organized!
Give us a call if there’s anything we can do. 

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The Art of Home Purchase Negotiation

There is much give and take involved in negotiating a property purchase. That’s why it’s important to have a checklist of what you want to get out of the deal as a buyer. Bear in mind, the home must be appraised and the lender will be looking at the fair market value on a given property. Since property values fluctuate, your Real Estate Agent should do a comparative market analysis so you are aware of what the trends are for the area in which you are shopping. This will give you an idea as to whether the seller’s asking price is realistic. You will also want to know how long the property has been on the market, and if any price reductions have occurred during that time.

Make sure your Real Estate Agent is on the same page with you so he/she is able to represent you properly. You also want to know that you are working with an agent that is experienced in representing the buyer. Not all agents have the ability to provide strong representation for both a buyer and a seller. If you have not yet selected a Real Estate Agent to represent you, my team and I can provide you with contacts that have a proven track record of success with our clientele.

Remember a good deal is mutually beneficial.

The seller will also have a wish list of what they want out of the negotiation. Listen attentively to determine what their hot buttons are. You can use this information to leverage what you want out of the deal at some point along the way.

Find out if the seller has a deadline. Perhaps they have already purchased their new home, or have to relocate because of a commitment to a new employer. Find out what the seller’s current mortgage balance is and use this to your advantage. Also find out what the seller’s bottom line is and how much room there is to negotiate. If possible, see if you can negotiate that the seller pays for your closing costs and pre-paid items. We can explain how much seller concessions are allowed with various loan programs.

On the other hand, if the seller wants to move because they can’t manage upkeep on the home, or don’t want to invest in repairs, these problems will be passed on to you. If you are prepared to go into a deal that involves a fixer-upper, there is an FHA financing program designed to provide funds for both purchase and repair. My team and I can provide you with more information on FHA loan programs.

You would also want to know if the seller is planning this move because there are problems in the neighborhood. Take a walking tour of the area and ask the residents what the neighborhood is like. You can also ask the local police department about the crime rate, or check the local newspaper for crime listings. Don’t be afraid to ask questions.

When the seller is intent on getting their way on a certain point, make sure you are getting something in return. Typically the built-in amenities such as the dishwasher and garbage disposal will stay with the home. You can negotiate other items that would normally be associated with a home purchase in exchange for something that ranks high on the seller’s wish list. Keep in mind that personal property like a lawn tractor or flat screen television cannot be included or financed. Be prepared to split the difference so everyone involved is satisfied with the negotiation. A win-win situation for both the buyer and the seller is critical to a smooth close.

Keep it simple and be direct, but above all, know that my team and I are here to assist you.

Call me directly for a free consultation. 503.931.4490

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Home Buyers Face Decisions that Affect Their Long-Term Financial Picture
 

Oregon – Taking the step into home ownership is one of the most important financial decisions a person will make in their lifetime. There are many factors to consider when embarking on this venture. Literally hundreds of loan programs are available, and it is important to find the one that best fits your personal long-term goals.

 

First and foremost, you must have a mortgage consultant in your corner that is willing to take the time to know what your long-term goals are. Communication is the key factor here.

Curious prospective home buyers sometimes turn to Internet-based services just to see what current interest rates are. But a faceless web site will not take the prospect’s future financial planning into consideration or guide the potential borrower through the many nuances of the loan process. When shopping for a home loan, be wary of web-based services that offer programs to reel prospects in with attractive rates that are based upon unrealistic time frames.

If a lender is offering a terrific rate based on a 10-day lock-in period, it is unlikely that the potential home owner would actually be able to find their dream home, get through the negotiation process and win approval from a lender within such a short period of time. This is called short-pricing, and when it comes time to close the transaction, the rate that was originally offered is simply no longer available. As a result, the unfortunate prospect is bulldozed into a loan program with a higher interest rate.

It is highly unlikely that a qualified loan originator whose business is based upon referrals will use unscrupulous tactics such as this to get new customers in the door!

 

Once you have found a mortgage consultant that you feel comfortable working with, lay your goals out on the table because it will have a tremendous impact on choosing a loan program that meets your specific needs. One of the most important factors to consider is how long you wish to borrow the money for. For example, if you know you will only be in the home for five years, it wouldn’t make sense to opt for a 30-year loan program or pay points up front to secure a lower interest rate. You would not be in the home long enough to benefit from such action.

Your mortgage consultant should be able to narrow down a selection of programs based on the information that you have provided, and present you with an easy-to-read spreadsheet that clearly defines viable options for your interest rate and amortization schedule, monthly payment and any potential savings you may realize by paying points up front.

 

Moreover, a reputable loan originator will not hesitate to share this information with your tax consultant or financial planner so they may offer additional feedback on your behalf.

 

Home ownership imparts a rewarding vehicle for building wealth and a strong financial future. The mortgage consultant that you choose should be there not only when your loan closes, but should also provide you with ongoing service to assist you in managing that debt over time.

Looking for homes in Salem Oregon? Try this home search site: www.salemoregonpropertysearch.com

Looking for a  Home in Central Oregon? www.bendoregonrealestate.com

 

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Refinance Your Mortgage for Rate and Payment Reductions

By Travis Newton,

Branch Manager, ENG Lending

Oregon – One of the biggest reasons homeowners refinance their mortgage is to obtain a lower interest rate and lower monthly payments. By refinancing, the borrower pays off their existing mortgage and replaces it with a new one. This can often be accomplished with a no-points no-fees loan program, which essentially means at “no cost” to the borrower.

In the no-points no-fees scenario, the mortgage consultant uses rebate monies paid by the lender to pay off non-recurring closing costs for the borrower. These are “one time” fees such as escrow or attorney fees, title insurance, document preparation, tax service, flood certification, processing and underwriting fees, etc. The borrower is still responsible for recurring fees such as interim insurance, property taxes or insurance policy payments.

Refinancing typically occurs when mortgage interest rates drop significantly, but borrowers with recently improved credit scores (from paying off credit card debt, making mortgage payments on time, etc.) are often candidates for better interest rates as well. If you haven’t checked your credit score in a while, it’s a good time to call a mortgage consultant.

The question most asked is, “But why should I go back into a 30-year loan?”

There are two schools of thought on this subject, and the mortgage consultant should work hand-in-hand with the borrower’s financial planner to determine what works best for their mutual client.

One option is to take the route of the “same payment” refinance, and actually pay off the loan faster and save money on interest fees in the long-run. If refinancing results in a lower monthly payment, the borrower can still continue making the same payment they made in the original loan, and the extra money will be applied to the principal balance.

 

For example: Let’s say you have 25 years remaining in your current loan, and you refinance back to a 30-year loan with a slightly lower interest rate, resulting in a payment reduction of $200 per month. (Note: This is just an example. The actual amount could vary.) You could then take that extra $200 per month and apply it toward the principal on the new loan. At this rate, the loan will be paid off in 22 years and 4 months, which is 2 years and 8 months less than the original loan.

 

On the other hand, if the borrower’s financial planner is a proponent of best-selling author and investment guru Douglas Andrew’s philosophies (see Missed Fortune), he or she may suggest investing the extra money in a side-fund that could earn a better rate of return and grow to the amount of the mortgage (and beyond) in even less time. This method provides excellent liquidity, but having more direct access to this money may be too tempting for some homeowners.

 

Regardless of the reason for the refinance, the mortgage consultant will need to know what the existing loan scenario entails, review the homeowner’s long-term goals, and provide a comprehensive spreadsheet that compares and contrasts the various loan programs available.

Bear in mind, refinancing to obtain a lower interest payment could also result in a lower deduction at tax time. The homeowner’s mortgage consultant and financial planner should work hand-in-hand with their mutual client’s best interest in mind.

Please call with any questions, we are here to help!

by the way, if you are looking for a new home in Oregon, please check out  www.salemoregonpropertysearch.com

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Tips for Remodeling in Any Market

When the housing market’s hot, it seems like just about any remodeling project is a good investment and adds value to your home. But when the market is tight, you want to be more selective about which projects you undertake, and know what you stand to gain in return.

So whether you’ve been thinking about boosting your home’s value, its curb appeal, or just making your living space more comfortable for you and your family, the ideas below can help you cost-effectively achieve your goals in any market.

First Things First. Buyers often decide whether to look at your house before they even get out of the car. Before you spend a lot of time and money remodeling the inside, you may want to look at the outside. Washing windows, repainting trim, planting flowers, and fixing screens can make a big difference. For even more impact, you may want to consider replacing your siding or even adding a patio or deck. The added value for these bigger projects won’t yield as high of a return on investment, but may help your house stand out from the rest. So, weigh your options and ask your REALTOR® for advice before starting a big project.

Make Yourself at Home. Making a cozy first impression is critical. To make sure your entryway is inviting, try adding a fresh coat of paint to your foyer or a wicker chair and table outside the door. For even more impact, replace those old light fixtures and update the floor in your entryway.

Sparkle up that Old Bathroom. Remodeling an old bathroom can make a big impact. For very little money, you can add a new faucet to your sink, a new medicine cabinet on the wall, and even new paint or wallpaper. For a little more oomph, you can update the bathtub, add a double sink, or re-tile the floor.

Even Better: Add a Second Bathroom. Perhaps no improvement makes a bigger impact on your family’s comfort and your house’s appeal than adding a second bathroom. The number of bathrooms is always a big sticking point for potential buyers, especially families with two or three children. Although adding a bathroom costs more than simply fixing up your old one, it also increases the value of your house more. Plus, having that second bathroom may help you sell your house faster than if it only has one…an important point to consider in any market.

Make it Hot in the Kitchen. Renovating an outdated kitchen is a great way to improve your home and its value. Plus, you don’t have to splurge on extravagant items like hand-painted Italian tile or built-in espresso machines. Focus on the basics: installing new flooring, adding a backsplash and a new coat of paint, re-facing existing cabinets, installing new counter tops, and possibly installing new appliances. These go a long way to making you, or a potential buyer, feel right at home.

Remember, start small, work your way up, and always plan ahead. You don’t want to get halfway into a renovation only to find that you have to update your entire electrical system, or that you forgot to apply for a permit. So, check your local zoning codes before starting any remodeling project.

Renovating your home doesn’t have to mean huge and expensive changes. You can make your house more comfortable and valuable with very little time and money.

If you would like more tips on easy ways to improve your home’s appeal, don’t hesitate to give us a call. We are also here to help with any Mortgage needs you may have! We are Oregon’s Expert in USDA, VA, FHA and Conventional Mortgage Loans.

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From  Edelman’s Inside Personal Finance

If you’re saving money to pay for future college costs, the best place to put that money is in a Section 529. And yet, a survey by the College Savings Foundation found that 48% of parents – almost half of all parents in this country – don’t know what a 529 plan is or have never even heard of one.

Six percent of those surveyed said that while they’ve heard of 529 plans, they think the plans are “too complicated.” Another 7% said (incorrectly) that other savings vehicles have better tax savings.

Section 529 plans (named for the section of the tax code that created them) offer you something you can’t get anywhere else: The ability to enjoy unlimited profits completely free of all federal and state taxes.

It’s true: You can set aside as little as $25, or as much as hundreds of thousands of dollars. Once the money is in the account, it grows tax-deferred, meaning you don’t pay annual taxes on the profits. And when you withdraw the money for college, the withdrawals are 100% tax-free.

There is no other vehicle that allows you to invest virtually unlimited amounts of money into investments that earn market-based returns where the profits are completely tax-free.

And it gets better. You can use the money to pay for an education at any college or university in the country, public or private. In fact, the student can attend college at any accredited institution in the world.

(There’s no requirement that your child attend an in-state school.) And, you can use the money for any college expense – not just tuition and fees, but also room and board, computers and books. Virtually any cost except travel or purchase of housing is eligible.

Also, it’s no problem if your child ends up not needing the money (thanks to a scholarship, or if he or she doesn’t go to college). Simply transfer the money to another child in the family, including your child’s cousins. You can even use the money yourself, transfer it to your parents or leave the money untouched for use by your child’s future children – your as-yet-unborn grandchildren! (Yes, you can actually enjoy decades of tax-free growth down the generations!)

Any child can have an unlimited number of 529 accounts. That means you can establish an account, and so can both sets of grandparents. Or they can contribute to the account you establish, if they prefer. And in many states, you get a state tax deduction when contributing to a 529 plan, further sweetening the benefits. (The tax deduction goes to the person who established the account. Thus, if a grandparent contributes to an account set up by the parent, the parent gets the tax deduction, not the grandparent. If the grandparent wants the tax break, he or she should create his or her own 529 account.)

If you have a child headed for college, open a Section 529 plan now.

If you are looking for a SDA, FHA, VA or Conventional Mortgage loan in Oregon? Give me a call!

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