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When is it Smart to Refinance?

We’re constantly bombarded by lenders to refinance our mortgage under a variety of programs. The volume of offers can almost make you numb to the rational consideration.

There are common rules of thumbs that homeowners and agents use such as not refinancing more often than every two years or there must be at least 2% savings from your previous mortgage rate may not always be accurate.

The reality is that if you can refinance for a lower rate and you’ll be in the home long enough to recapture the cost of refinancing, it should be considered. The costs of previous refinancing that haven’t been recaptured by monthly savings may need to be added to the costs of the new refinance.

Take a look at the chart that shows the average rates according to Freddie Mac for 2012. They are lower today than they were in January of 2012 and for the ten years before that.

Refinancing may save you a substantial amount of money, especially if you’re going to be in your home for a long time. It is definitely worth investigating. To get a quick idea of what your savings could be, use this refinancing calculator.

When looking to buy Mt. Hood Real Estate come to MtHoodRealEstate.net for your mountain getaway or new full-time home.

By |February 27th, 2013|Categories: Uncategorized|Tags: , |0 Comments

Preparing To Buy A Home

Preparing to buy a home is a bit like preparing to go on a very long journey. You have to have your finances in order, know where you’re going, what you’re hoping to accomplish and how much time and how much money you can afford to spend.

Financial matters. When it comes to owning real estate nothing is more important, for obvious reasons. As we’ve seen, if you get locked into a mortgage you can’t afford, the result can be devastating. But even if you can afford the mortgage, you might not want to be “house rich and cash poor”. You have to consider other things that are important to you such as travel and your spending habits. If for instance, you like to travel for months at a time, it might be wise to consider a smaller house with a less expensive mortgage instead of a large home with a big mortgage, which could cause you more work and less financial ability to spend on other things you like.

Another consideration is the length of time you want to have the mortgage. Many young people choose a 30-year fixed mortgage but if you’re a senior citizen you might want to opt for a 15-year loan. The best thing you can do is make a list of your financial matters and the questions you have about buying a home and then consult with a highly experienced loan officer. A knowledgeable loan officer can be like having a tour guide with you all the time in a foreign country where you don’t speak the language. The jargon used in the mortgage industry documents can be confusing. Having someone who can clearly explain the documents, what to expect, the time frame, and the process is priceless.

Debt-to-income. The ratio of your debt-to-income is vital when purchasing a home. These guidelines have become more strict since the housing crisis so it’s critical to consult with experts about your personal financial situation. Generally speaking, you should have a debt-to-income ratio of no more that 36 percent–meaning all you owe (including your mortgage, taxes, and insurance) should not equal more than 36 percent of your income. Remember there are still monthly expenses of your home on top of your debt. And, of course, the less you owe and the more you make, the better position you’re in for buying a home and creating your own financial freedom.

These days, along with keeping your expenses and debt manageable, a key factor to buying a home is having a healthy downpayment. Most lenders would consider 20 percent a good downpayment. The more you bring in, the less you have to borrow. Remember the collapse of the housing market was brought on by small or no downpayment loans and many buyers who simply didn’t understand the risks.

Know how long you’ll stay. This is really important because the cost of buying and selling a home is expensive and very time-consuming. If you’re not planning on staying in your home more than seven to ten years, think about renting. You may still decide to buy, but you need to understand the cost of purchasing and maintaining a home. Investigate the economic difference between buying and renting. Be realistic about how frequently you’ve moved in the past and whether you’re now ready to settle in for several years. You can always rent your home out but this assumes that you’ll be a landlord (willing to take on all those duties) and then also have to find another place to live and either rent or buy.

After considering all of these factors and making certain that you’re ready to buy, then take the next step and find the best agent in your real estate market. Your agent will help you further prepare to buy the home of your dreams.

Written by Phoebe Chongchua for the Realty Times

By |February 25th, 2013|Categories: Uncategorized|Tags: |0 Comments

New MIP Guidelines for FHA Loans After 6/3/13

The 3.5% down payment on FHA loans could be more expensive for buyers than expected. Beginning April 1, 2013, the mortgage insurance premium will go up by .1% to 1.35% which may not even be noticeable to most would-be homeowners.

The staggering increase will occur on 6/3/2013 when FHA’s policy on the duration of the required mortgage insurance will be increased for the life of the mortgage. It basically doubles the amount of total MIP if the loan is paid to term.

Example: Purchase Price $175,000
with 3.5% down payment at 4% mortgage rate on 30 year term

 

Current

After 6/3/13

MIP duration 78% of original loan Life of mortgage
Cumulative premium $20,838.24 $42,447.93

Currently, the MIP is required for approximately 9 years 9 months with normal amortization. The new program would require the MIP for the life of the loan. In this example, the initial monthly MIP is $196.88 which decreases based on amortization.

There are buyers that qualify on income and credit who may not have the necessary additional down payment required for 80% and 90% conventional loans. The 3.5% FHA program has provided a great vehicle to get into a home with a minimum amount of cash.

For homeowners that expect to stay in their home for ten years or less, the new changes might not have much financial impact. Homeowners who expect to be in their home long term can refinance with a conventional loan without mortgage insurance once the equity has increased due to amortization and appreciation.

For buyers to avoid these increases, they will need to act now to get the FHA commitment issued prior to these change dates.

If you are looking for Mt Hood Cabins for Sale check out Mt Hood Real Estate.net

By |February 17th, 2013|Categories: Uncategorized|Tags: |0 Comments

Rental Increases Should Prompt More Home Buying Moves

Rents are still going through the roof, just not as quickly.

Rents were up for the third consecutive year in 2012, when they rose a bit slower than in 2011, but forecasts call for rent increases in 2013 to match 2012’s increases, according to MPF Research.

That puts more pressure on housing consumers to buy and lock in housing costs to beat both the rising cost of rent and the growing costs of owning a home.

Buyers who move now can still enjoy record low interest rates, distressed property bargains and relatively affordable home prices.

However, most renter movement in the apartment sector consists of households opting for one apartment over another.

Loss of renters to the owner-occupied housing market sector is having only a very small impact on apartment sector fundamentals, according to MPF Research.

“While the number of apartment renters opting to buy is rising a little, it remains far below the levels apartment operators were accustomed to prior to the recession,” said Greg Willett, MPF Research vice president.

“Families that have been renting single-family homes, rather than apartments, comprise a big portion of the first wave of homebuyers seen in the cycle. By far the biggest component of the apartment resident base, particularly within large urban areas, consists of young singles living alone or young-couple households. Single-family homes just aren’t the right housing option for many of them, regardless of shifts in the pricing relationship,” Willett added.

MPF Research said apartment rents climbed 3.0 percent in 2012, down from 4.8 percent in 2011, but a bit above the long-term norm of 2.5 percent recorded during the past two decades.

An increase of 3.0 percent is similar to the average results posted during shorter past periods when occupancy was sustained at strong and generally stable levels, according to MPF Research.

Those shorter periods of annual price increases of 3.0 percent came in 2005 through the middle of 2008, and earlier in the middle to late 1990s.

Among large individual metros, top markets include three San Francisco Bay Area markets – San Francisco, San Jose and Oakland – where rents rose 8 percent, 7.7 percent and 7.1 percent, respectively.

Other top rent increases were in the Denver-Boulder area where rents rose 5.9 percent in 2012; 5.1 percent in Nashville and New York; 4.8 percent in Houston; 4.6 percent in Charlotte; 4.4 percent in Portland and 4.3 percent in the Seattle-Tacoma area.

MPF also said property owners and operators didn’t push as hard for higher rents in 2012 as they did a year or more ago. They’d rather hold onto existing tenants.

“Many on the operations side of the apartment industry have focused on sustaining their very tight occupancy levels during a period when job growth and new household formation have been fairly sluggish at the same time that renter movement has begun to inch up from the unusually low levels experienced in the previous few years,” Willet said.

The average apartment occupancy rate of 94.9 percent at the end of 2012, was up a tiny bit from 94.7 percent at the end of 2011. The rate was 92 percent in 2009, when the nation’s apartment occupancy rate bottomed, MPF reported.

MPF says look for 2013’s rental market performance to be similar to the strong 2012 marlet.

“Most places are starved for new product right now, so properties that will complete over the coming year appear likely to do incredibly well, generally without hurting the results for the existing stock,” Willett said.

Written by Broderick Perkins, Realty Times


Wondering What Your Home Is Worth? — Let me show you.

By |February 4th, 2013|Categories: Uncategorized|Tags: , |0 Comments

How to Keep Your Mortgage Approval Approved

Written by Broderick Perkins for the Realty Times

You know how tough it is to qualify for a mortgage.

Proof you’ve got a long-term job with ample income. A credit score to the moon. Your life’s savings as a down payment. More cash stashed away. A debt-to-income ratio to die for. For some, tax returns for the last two years.

You’ve been there, done that. For weeks now. Maybe a month or more.

You’ve fought the good fight, you’ve run the gauntlet of mortgage qualifications and you have your signature-tired hands on that coveted home loan approval.

Now, all you have to do is not blow it.

For goodness sake, don’t make any surprise financial moves that could cost you your home loan.

Your mortgage approval is primarily based on documenting your income and assets, your equity stake or down payment, your credit and the cash you’ll have left over after the deal is done.

Once you have a mortgage approval, if you change the profile of any one of those qualifiers, you could have to kiss your mortgage goodbye.

Lenders today don’t just check your qualifying information once or even twice. Three, four or more checks, of one document or another, aren’t out of the question in today’s tight lending market.

Avoid big purchases – If you buy a new car, change the lease, or acquire another large possession, it could show up on your credit report or bank statement.

The lender could think you’ve gone beyond the risk the lender is willing to accept on your mortgage – especially if you qualified by a hair.

If the new loan or purchase amount upsets the debt-to-income ratio the lender used to approve your home loan, your mortgage could go “poof.”

No new credit – Likewise, don’t open new credit cards, even for a zero interest rate. Those credit card offers will come streaming in after you close your mortgage. Just wait. The lender didn’t approve you based on the additional card or extra loan.

Pay your bills – Also, pay your bills on time, even if there’s a dispute. Stop paying a bill and the blotch on your credit report can block your mortgage.

Keep your job – Be kind to your boss and don’t get fired. Also, don’t go looking for new work right now, unless it’s a second job to make more money.

Certain job changes also can affect how the lender rates your creditworthiness.

That includes a job change between industries, a job change to start a new company and changing from a job with a salary to a job that pays by commission.

On the other hand, get a promotion and a raise and you should be fine.

Don’t cash out – Leave your stashes of cash alone. Don’t transfer large sums of money between bank accounts. Don’t make random, undocumented deposits to or withdrawals from your bank account.

Don’t be stupid – It should go without saying, but criminal activity, trying to buy a second home and trying to add a co-signer or name to the loan, after approval, could all also get your mortgage canned.

Remember, stuff happens. There are events beyond your control that could cost you your mortgage. A pink slip. A divorce. Hospitalization. The co-signer bails.

However, once your mortgage is approved, do keep tight reigns on what you can control.

Written by Broderick Perkins for the Realty Times

By |February 2nd, 2013|Categories: Uncategorized|Tags: , , |0 Comments

Rent Vrs Own

How much evidence is needed to make a decision to get out of the rent race and become a homeowner?

Compare your rent with a mortgage payment on a similar size property. If you want a larger home than your current one, use the rent that property would require instead of what you’re currently paying. If it’s considerably cheaper, you may not need any further encouragement.

By the time you consider the principal reduction, appreciation and tax savings, your monthly cost of housing could be much less than the rent you’re paying.

The principal reduction included in each payment is like a forced savings account that increases as your mortgage balance decreases. Your equity in the property will also grow due to appreciation. The equity is part of your net worth and an investment in your family’s future.

The income tax savings can be an additional financial consideration if the combined interest and property taxes exceed the allowable standard deduction.

Trends are showing that both tenants and homeowners are staying in their homes longer. It’s been said that whether you rent or own, you’re paying for the home. Do you really want to buy the home for your landlord? Check out your numbers on a Rent vs. Own.

By |January 28th, 2013|Categories: Uncategorized|Tags: , , , |0 Comments

Shifting from A Buyer’s Market

As the market shifts from a buyer’s market, it’s good to know how to improve your chances to have the seller accept your offer.

Once you decide on a home, don’t waste time; write an offer and submit it as soon as possible. Competing with another buyer happens more frequently than you’d expect. Multiple offers are a seller’s advantage but here are some tips to level the playing field:

  • Realistic offer – don’t give the impression you’re trying to “steal” the property. Submit comparable sales that justify your offer.
  • Pre-approval letter – this satisfies seller’s biggest concern that an unqualified buyer will unnecessarily take the home off the market and the seller will lose other opportunities.
  • More earnest money – it shows you’re serious and makes the seller feel like the contract will actually close.
  • Minimize contingencies – from a seller’s standpoint, each contingency is one more reason why the sale won’t go through. They feel the home is “off the market” and they’re in limbo.
  • Shorten inspection period – your agent can help you set a reasonable date but let the seller know you’re willing to close prior to that if possible.
  • Write a personal letter to the seller telling them why you want their home – this can be the emotional connection to the seller that makes the difference in you getting the home.

A seller wants to feel confident that the offer they accept will actually close so they can plan for their next move. Following tips like these can definitely affect negotiations and help put together an offer that is more likely to be accepted.

By |January 24th, 2013|Categories: Uncategorized|Tags: , |0 Comments

Don’t Delay….If you Have Been On the Fence about Buying

Buyers who have delayed purchasing a home due to concerns about what might happen to the tax laws affecting home ownership should feel comfortable about getting back in the market. The recent legislation passed by Congress and signed by the President continues to value homes as a favored investment.

For a summary of specific real estate provisions in the “Fiscal Cliff” bill, click here. NowLater

Whether the delayed purchase is for a home to live in as your principal residence or to use as rental property, taking action sooner is better than later.

Reasons to buy now:

  1. The house payment with taxes and insurance is probably cheaper than the rent.
  2. Rents will continue to rise making the difference even greater in the future.
  3. Lock-in the principal & interest payment with a fixed-rate mortgage.
  4. 30 year mortgage terms are available to most borrowers.
  5. The mortgage interest deduction is intact for the majority of taxpayers.
  6. The capital gain exclusion for principal residences up to $500,000 remains in place.
  7. Prices are going up due to lower inventories and several years of low housing starts.

Contact me about any specific questions you have or information you need.

By |January 18th, 2013|Categories: Uncategorized|Tags: , |0 Comments

The Market is “Looking Up”

January is always a good time to take a look at Market Trends.  Just how did the previous year shake out when looking at the Total Volume in Residential Real Estate on Mt Hood?  Also, where did the Median Price and the Number of Sales stack up when compared to the year before?

So, I decided to take a look at not just last year, but the last ten years of data for the Mt Hood Area, includingWelches, Brightwood, Rhododendron, Government Camp and part of Sandy Oregon.

It took until the 3rd quarter of 2012 to finally see the market experience “appreciation” for the first time in years! We have to remind ourselves, that this indeed has been a very challenging real estate market nation wide.

Numbers don’t lie.  We have indeed crawled out of a big Hole!!

10 Year Volume Trend on Mt Hood 2

 

 

 

 

 

 

 

 

 

 

The 2012 Mt Hood Residential Sale Volume was over $28,000,000 in 2012. The Median Sale Price was $172,000.

Median Sale Price Trend on Mt Hood 2

The ten year Number of Sales per year is indeed one of the most dramatic graphs. Things are indeed back “On the Way Up!”

10 years of SalesperYear

Check out all unique Homes and Cabins in the Mt Hood area by property type:

Interest Rates are excellent and Home Prices are still affordable, a winning combination to to buy in 2013. When looking to buy Mt. Hood Real Estate come toMtHoodRealEstate.net

By |January 15th, 2013|Categories: Uncategorized|Tags: , |1 Comment