Lake Oswego Deals and Steals on the rise
Reply
Category Archives: home buyers
Credit 101 – Are you ready to buy a Lake Oswego home?
Now is a great time to buy Lake Oswego real estate. Interest rates have never been lower and Lake Oswego prices have come down. We all hear the buzz; sellers are negoiating and buyers have lots of premium choices. Sought after areas like First Addition are within reach and Luxury homes are competing for buyers. A buyers market combined with low interest rates make it a great time to buy.
Interest rates are incredibly low giving additional buying power to many home buyers. But is your financial house in order to get that 4.275% mortgage rate? You may have that great job and income, but in many cases the credit score is the deciding factor or whether a lender will even approve the mortgage at any interest rate.
Simply stated ~ Best Credit Score = Best Interest Rate
The most widely accepted measure of ‘credit worthiness’ is the infamous FICO score. Named after the originator, the Fair Issac Corporation, your FICO score is the lenders gauge of ‘your ability to repay the loan’.
FICO scores range from a low or 300 to a high of 850. Very few consumers have scores above 800. In today’s mortgage world FICO, scores above 760 are considered excellent but lenders will factor in other elements, such as assets and liabilities.
A high credit score can not only help you into the lowest possible interest rate, it can even reduce your insurance premiums, and some employers consider it when deciding whether or not to hire you for a job. It is perceived that the higher your FICO score the more responsibly you may act in other areas of your life.
Lower the score, the harder to get a loan, land a job, or qualify for the best terms on consumer credit contracts like a car or other items.
There are 3 main reporting agencies; Experian, Equifax and Trans Union. By law each are required to provide consumers with a copy once every 12 months. Consider rotating your request between each of the companies every 4 months, so you can see any changes. Visit www.annualcreditreport.com to get started.
Improving your credit score
Now is the time to get your financial house in order, so you are ready to put that offer in on your West Linn dream home? This great tool www.mint.com is highly rated by both Money Magazine and Kiplinger’s. Not only will it help you get your ducks in a row, you just may find some money to add to your down payment!
Ready to take advantage of lower home prices and incredibly low interest rate. Let’s discuss your real estate goals.
Roberta Nopson, ABR, SFR
Tax Credit Trumped by Low Interest Rates
Buyers take notice – now is the time. These historically low interest rates combined with adjusted property values equal a win-win for buyers today and won’t last forever.
Rates are at ridiculously low levels and buyers seem to be taking this for granted. I find this just fascinating that vey few buyers are focusing on how rates affect their purchase power. Check out these low rates when you take the time to actually pencil it out.
Buying Power – Example using the 250K Median Price of a home in the Portland metro area August 2010
- Consider a $250,000, 30 year mortgage at 4.375%. The monthly payment would be $1,248 per month.
- That same monthly payment at 5.375%, where rates were a year ago, would be for a mortgage of $222,870. This is a $27,000+ difference or 3.5 times bigger than the $8000 tax credit. That is one way to look at the incredible savings today’s low interest rates offer buyers.
Savings over the life of the loan – HUGE!
- Looking at the difference in payment for the same mortgage amount, the payment on a $250,000, 30 year mortgage at 5.375% is $1,399 per month, or $151 per month more compared to the 4.375% rate.
- In just five years, the savings would be over $9,000!! And over the life of a 30 year loan would be more than $54,000.
These numbers are mind boggling! Yet, first time home buyers tripped over each other to get in on the tax credit before the expiration date of April 30th.
How many of you remember the late 90’s into 2000. Rates were at 8% and that’s not that long ago!
- For a $250,000 mortgage, the monthly payment would be $1,834, which is an additional $586 per month.
- In 1990, rates were at 10%, which would be $2,194, an additional $946 per month (over today’s 4.375% rate).
If you or someone you know is considering whether it is time to buy; Don’t ignore the numbers! Today’s rates are only 4.375 points above ZERO. Think Zero is coming..
Rates can and will go only one way – UP. They go up and your buying power goes down. As the economy improves, rates will increase and purchasing power will begin to erode.
Roberta Nopson
Short Sales – the new norm?
What has been in the press is here in Lake Oswego, West Linn and many Portland areas – the short sale. Yes real estate prices have come down and that makes opportunity knock on the buyers door, but lenders are knocking on doors as well. Overall Lake Oswego and West Linn have seen the average price come down 12-18% year to date and many areas of Portland range in the high 20′s.
Great news for those sitting on the side lines with cash stashed for a down payment and interest rates now in the mid 4%. The step up buyer of the McMansion has many to choose from, but not so great news for a seller that is upside down because they did a refi at the peak in 2007 to consolidate bills, take a lifetime vacation, or send kids off to college. Or maybe 100% financing with an 80/20 loan package. What are their options now.
The answer is “It Depends”. Pretty grey I know…
Every home owners situation is different; as different as the many lenders that own the paper or are serving the loan. How many liens are against the property? Does the seller have other assets? Does the loan have MIP or are the HOAs on lien as well? These are just the starting questions in our conversation with a distressed homeowner.
NAR - National Realtors Association has stepped up their position to help real estate home owners, buyers and their agents understand that this may very well be the “New Norm” in real estate transactions. They have established a standard to assure Agents have the knowledge and tools to navigate the short sale and foreclosure waters.
SFR – Short Sale & Foreclosure Resource is a designation given to those agents that have completed course work and demonstrated an understanding of the options, pitfalls, and opportunities facing the real estate industry today. I work together with you and your lender as your 3rd party representative, and do not charge a fee for this service.
Sellers – there are many options for us to discuss. You may be seeking a loan modification, forbearance, reinstatement or another of the many “Loan Work Out Options”. Should none of these meet acceptable terms and a short sale is your next step, we can help.
Banks have taken their head out of the sand and are positioning themselves to help. They really do not want any more homes in their inventory. In the past 60 days Bank of American has hired over 5000 employees to assist in moving these files along (they have all the Country Wide & Greenpoint paper as well as others). Additionally, many lenders have signed on with Equator. An online system to help us agents keep up to date on exactly where the “short sale package” is in the system. This is a real benefit for all parties. And hopefully more and more lein holders will sign on to the program.
Should this be the road that makes the most sense – Remember, you “apply” for a short sale in much the same way as you made loan application to purchase the property. They want all the financials that support your distressed position. Now is not the time to get tricky.
There is so much I could write on the subject, but every situation is different. If you or someone you know is facing this stressful situation, give me a call. We will start at the beginning and see if a short sale is the right rode.
Roberta Nopson, ABR, SFR
503-495-5231
