8 things you should know about down payments

8 things you should know about down payments

Troy Batson is a licensed broker in the State of Oregon ~ lowes-group.com ~ The Lowes Group ~ 920 NW Bond St. Suite 107 Bend, OR 97703 ~ (541)312-2113

Ready to Buy? What Should I Do?

Getting preapproved for a home loan is the first step you should take before searching for a new home. If you haven’t already been pre-approved for a home loan, make sure you get pre-approved before searching for a home or contacting a real estate agent so you have an idea of what you can afford and what you should (or should not) be looking for.

Around 80% of all home searches begin on the Internet. Through all the resources available, homebuyers can conveniently search through hundreds of online listings, view virtual tours, and sort through dozens of photographs and street views of neighborhoods and homes. You've probably defined your goals and have a pretty good idea of the type of home you want. By the time you reach your real estate agent's office, you are halfway to home ownership.

Good real estate agents will listen to your wants and needs and arrange to show you only those homes that fit your particular parameters. Your agent should preview homes before showing them to you as well. If you are a motivated buyer, it shouldn’t take too long for you to find your new home.

When rating the inventory of homes you are shown:

• Bring a digital camera and begin each series of photos with a close-up of the house number to identify where each group of home photos start and end.




• Your agent can provide you with a print out of the listing for you to make notes on. Ask for a listing print out for every home you view to help you stay organized.




• Take notes of unusual features, colors, and design elements.




• Pay attention to the home's surroundings. What is next door? Do larger homes tower over your single story? What is the parking situation like if you want to have guests over? Does the neighborhood seem well kept?




• Do you like the location? Is it near a park or a power plant?




• Immediately after leaving, rate each home on a scale of 1 to 10, with 10 being the highest.

When you know how to start your search for a new home and you have a good agent to assist you, the home buying process should be enjoyable, and you can feel confident in your decision.

Troy Batson is a licensed broker in the State of Oregon ~ troybatson.com ~ Duke Warner Realty ~ 1033 NW Newport Ave. Bend, OR 97701 ~ (541)382-8262

New FHA Loan Forbearance Program

The Obama administration recently announced that loan servicers who are collecting payments on FHA loans will be required to allow qualified borrowers who lose their jobs to miss up to 12 months of mortgage payments before initiating foreclosure proceedings against them. See the press release here.

The new forbearance program allows unemployed borrowers to stay in their homes while seeking new employment.

Currently, the FHA’s policy is four months of required unemployment forbearance. Housing Secretary Shaun Donovan claimed the current time period is “inadequate for the majority of unemployed borrowers.”

Donovan also stated, "Today, 60 percent of the unemployed have been out of work for more than three months and 45 percent have been out of work for more than six. Providing the option for a year of forbearance will give struggling homeowners a substantially greater chance of finding employment before they lose their home."

Not all borrowers will qualify for the new forbearance program, but the Obama administration said it is removing the “upfront hurdles” for qualification. Servicers are required to provide any borrowers who are denied forbearance with the reason for denial and allow the borrower at least seven days to submit additional information that may impact the evaluation.

All FHA-approved servicers must participate in the new forbearance program.

The administration said it hopes that the changes will "set a standard for the mortgage industry to provide more robust assistance to unemployed homeowners in the economic downturn."

Troy Batson is a licensed broker in the State of Oregon ~ troybatson.com ~ Duke Warner Realty ~ 1033 NW Newport Ave. Bend, OR 97701 ~ (541)382-8262

Pricing Your Home to Sell

Choosing the right price for your home is one of the most important aspects of selling your home. If your price is above market value, you run the risk of it sitting on the market too long.

An overpriced property:

• Minimizes the number of offers


• Limits qualified buyers


• Reduces the number of showings


• Lowers prospects


• Limits financing


• Will attract buyers in a higher price range that have high expectations

Most buyers today are educated about the home buying process and have done their homework before purchasing a home. They will know if your home is overpriced.

In choosing the right price for your home, the market is the most accurate indicator. The condition of the current market, the number of buyers, and current competition will dictate your home’s value. If your home does not meet the competition price, it simply will not sell.

Keep in mind that the value of your property is not dictated by what you’ve invested in the property, what you paid for the property, or by the amount you feel you need to receive from the property.

Choosing the right price for your home will increase advertising response, stimulate buyer interest, compensate for property shortfalls, and provide you with a negotiating advantage.

Feel free to contact me if you are interested in selling your home and finding the right price to get it sold in today's market.

Troy Batson is a licensed broker in the State of Oregon ~ troybatson.com ~ Duke Warner Realty ~ 1033 NW Newport Ave. Bend, OR 97701 ~ (541)382-8262

Mortgage Standards Rising

The National Association of Realtors (NAR) recently reported that existing home sales increased in March, which is good news. However, while homes might be more affordable right now, qualifying for a mortgage loan requires higher standards than it did 5 years ago.

Because Fannie Mae, Freddie Mac, and the FHA cannot guarantee mortgages over the conforming loan limit, mortgages over the limit will face higher interest rates and tighter restrictions. Fannie Mae increased costs for borrowers with lower credit scores, less home equity, and second mortgages when it changed what it calls its loan-level price adjustments.

Many consumers today are facing credit problems due to unemployment, under-employment and lower home values, but credit score requirements remain high. While a 580 credit score was acceptable a few years ago, Fannie Mae and Freddie Mac require at least a 620 score for all programs except the Home Affordable Refinance Program (HARP). FHA home loans require a minimum credit score of 640.

Debt-to-income (DTI) ratios, which entail your monthly debt payments relative to your income, are still required to be high as well. Fannie Mae used to allow DTIs up to 55 percent but now typically requires at least 45 percent. Freddie Mac wants at least 50 percent DTI. To compute your DTI, divide your monthly debt payments, such as credit card, car loan, and other loan payments, by your gross monthly income.

Home loans with no down payment have all but disappeared. The minimum required down payment when buying a primary home is typically 3.5 percent of the sales price, which will allow you to get an FHA loan. Conventional loans typically require 5 percent to 10 percent down.

Home loan qualification standards will likely remain high for now, so plan carefully if you’re considering a new home purchase. Focus on improving your credit score, saving up for a down payment, and lowering your debt-to-income ratio, and you can be on your way to owning a new home. Contact us to discuss your options.

Troy Batson is a licensed broker in the State of Oregon ~ troybatson.com ~ Duke Warner Realty ~ 1033 NW Newport Ave. Bend, OR 97701 ~ (541)382-8262

Buying a Foreclosed Home

While the market seems to be slightly improving, there doesn’t seem to be a shortage of foreclosed homes. Purchasing a foreclosed home can save you money and even possibly prove a lucrative investment, but it’s important to be educated on what to look for when buying a foreclosed home.

• Budget carefully. The “total price” of a foreclosed home is not necessarily the agreed upon price or the bid made at auction. The total price takes into account all back taxes, liens, and any other financial responsibilities the purchaser inherits from the purchase of the property, which takes us to our next point:
  


• Do your research. Once you have found a foreclosed home you are considering buying, go to the County Recorder's Office. The County Recorder's Office can provide you with the amount in back taxes owed, which generally isn’t included in the sales price. They can also provide you with the Trust Deed, the Notice of Foreclosure Sale, and the Notice of Default on the property. These documents are public record and reflect how much was originally loaned to the homeowner, when the loan was issued, how much was owed at the time the Notice of Default was filed, and how much the bank paid for the property.
  


• Schedule an inspection. Before making any offer, have the foreclosed home thoroughly inspected by a professional. Make sure the electricity is turned on when you go to inspect the property. Check the roof, all electrical appliances, the air conditioner, and load bearing beams. Check for termites, mold, structural damage, and bad grout. Once the home is inspected, have the inspector give you an estimate for any costs and add it to your budget. Foreclosed homes are usually sold “as is” and once the contract is signed, any repairs are your responsibility.
  


• Consider the selling process. Is the sale an auction or is the property Real Estate Owned (REO)? Auctions can be a good option in market liquidation; however, purchasers at auction do not often have time to make necessary inquiries. Auctions can also cause a competitive and emotional environment, so be very cautious not to overbid. You are not in competition with the other bidders. You are in competition with the market value of the foreclosed home. Also, back taxes or liens are usually not included in the bid price, so keep that in mind. REO properties are those that fail to sell at auction and are being sold by the bank. This process tends to offer the purchaser more time to discover any drawbacks and react accordingly.
  


• Choose the right lender. Good financing options are still available to many qualified homebuyers. A good, reputable lender will take the time to review your financial long- and short-term goals. They will explain the process of buying a foreclosed home to you clearly and help you find the best solution for you.

We keep your goals in mind and want you to get into a home that is right for you. If you are interested in purchasing a new home, or want to learn more about what to look for when buying a foreclosed home, contact us to discuss your options.

Troy Batson is a licensed broker in the State of Oregon ~ troybatson.com ~ Duke Warner Realty ~ 1033 NW Newport Ave. Bend, OR 97701 ~ (541)382-8262

Special Home Loan Program for Oregon Veterans

The Oregon Department of Veterans Affairs has a new home loan program in addition to the Federal VA Home Loan Guaranty Program.

In November 2010, Oregon voters approved ballot Measure 70, expanding veteran eligibility for the ORVET Home Loan as well as eliminating the constitutional 30-year eligibility restriction. The ORVET Home Loan is now a lifetime benefit for eligible veterans. This constitutional amendment takes effect January 2, 2011.

Veterans must establish their eligibility for the ORVET Home Loan. This eligibility is separate and distinct from the federal VA home loan.

Some of the benefits of the ORVET Home Loan are:

• Interest rates are generally below market.


• Closing costs are limited.


• Up to 100% financing may be available.


• Loans are NOT limited to "first time homebuyers".

For more information on this program follow this link to the ODVA website or feel free to call me and I will help get you started to homeownership.

Troy Batson is a licensed broker in the State of Oregon ~ troybatson.com ~ Duke Warner Realty ~ 1033 NW Newport Ave. Bend, OR 97701 ~ (541)382-8262

Outdoor Life Ranks Bend, Oregon #1 Town for Sportsmen

Metolius River

Outdoor Life has ranked Bend, Oregon as the number one town in the United States for sportsmen.

Just another reason to make Bend, Oregon home!

Troy Batson is a licensed broker in the State of Oregon ~ troybatson.com ~ Duke Warner Realty ~ 1033 NW Newport Ave. Bend, OR 97701 ~ (541)382-8262

Home Owner Associations

Homeowners associations, or HOAs, are formal entities created for certain communities to maintain common areas and enforce set rules, regulations, and bylaws. An HOA has the authority to enforce Covenants and Conditions & Deed Restrictions. HOAs are usually established to ensure that homeowners in a specified community adhere to specific regulations in order to maintain the quality and value of the properties in the HOA community.

When buying a new home, you need to carefully consider whether or not you want a home in a neighborhood maintained by an HOA.

Here are some pros and cons to homeowners associations.

Pros

• HOAs generally pay for and maintain common areas such as swimming pools, tennis courts, playgrounds, and clubhouses. Without an HOA, you may not have access to these amenities in your neighborhood.
  


• HOAs may often provide lawn care services and/or snow removal for each residence. You won’t have to do this yourself or hire someone to do it for you, which can free up your resources and your time.
  


• HOAs maintain or raise property values by regulating aspects of your community that help keep a neighborhood looking well kept. Some HOAs have restrictions on the percentage of homes in a neighborhood that can be rented. This can positively affect property values as well.
  


• HOAs often host neighborhood parties and BBQs, which can help build relationships among neighbors.
  


• If you disapprove with the condition or appearance of a neighbor’s home or yard or are concerned with how a neighbor’s home may be affecting your own property value, the HOA acts as a mediator to ensure all guidelines are followed by everyone in the community.

Cons

• Some homeowners feel that having an HOA doesn’t allow them the freedom they want. There are restrictions with an HOA that you won’t have without one such as pet restrictions, parking restrictions, yard maintenance regulations, and regulations regarding the outside appearance of your home.
  


• If you want to rent your property, you often have to approve the rental with the HOA. Some HOAs only allow a certain percentage of renters in the community to maintain property values.
  


• With every HOA, there are monthly or yearly dues. This is an expense you’ll need to consider when buying a home. Also, HOA fees can increase without warning, so you will need to budget in advance.
  


• HOAs have the right to file a lien on your home if you don’t pay your fees.
  


• Some HOAs are poorly managed. Many HOAs have volunteer board members that are usually a part of your community, but they don’t manage the HOA full-time. Often, a management company is hired to oversee the HOA, and some residents don’t like having an outside management company that isn’t part of the community overseeing their neighborhood.

If you are considering buying a home that’s part of an HOA, ask to get a copy of the rules, regulations, and bylaws before you make your offer so you can thoroughly review whether or not having an HOA is right for you. Be aware of what the HOA fees cover. Some HOA fees may even include cable T.V. or Internet service, which might even save you money. Also, look at the budget, financial records, and minutes from the previous board meetings. These will give you some indication as to how well the HOA is run.

Troy Batson is a licensed broker in the State of Oregon ~ troybatson.com ~ Duke Warner Realty ~ 1033 NW Newport Ave. Bend, OR 97701 ~ (541)382-8262

Hardest Hit Fund Available in Oregon

A number of states are currently utilizing the Hardest Hit Fund, which was established in February 2010 to provide aid to families who were most affected by the economic and housing market downturn.

The U.S. Department of the Treasury has allocated $7.6 billion to 18 states so far and the District of Columbia. Each state housing agency has implemented the program to meet the distinct challenges of struggling homeowners in each individual state. The states that received this fund were chosen either because of low unemployment rates or steep home price declines greater than 20% since the housing market decline.

The program is designed to help families avoid foreclosure. The Hardest Hit Fund programs complement the Making Home Affordable Program, but they aren’t limited to homeowners eligible for Making Home Affordable.

Hardest Hit Fund programs will vary state to state, so go here to see if your state was chosen for the program and if you may qualify. Oregon is a state chosen for the program.

Troy Batson is a licensed broker in the State of Oregon ~ troybatson.com ~ Duke Warner Realty ~ 1033 NW Newport Ave. Bend, OR 97701 ~ (541)382-8262

Must Have Mobile Apps for Home Buyers

There’s an app for nearly everything these days. The real estate market is no exception. Here are a few helpful apps for people searching for a home or those who may just be interested in the market and new technology:

App: Move Inc.’s Realtor.com Home-Search

Price: FREE

Realtor.com’s home-search app provides users with new listings, saved searches, and open house information, among many other things. It lets consumers rate and comment on listings for personal reference and share listings of interest.

App: Quick Mark

Price: FREE

Have you seen barcodes like this one all over lately?

These barcodes are everywhere including the real estate market right now. Once you download the app, you can take a picture of the barcode with your phone, and it will send you to a website. The Quick Mark barcode function is similar to clicking a link online.

App: Google Maps

Price: FREE

Google Maps comes standard on most Android phones, so you may already have it installed. The Google Maps app is especially helpful when you’re searching for a home or have lost your way while house hunting. It offers step-by-step driving directions as well as map views .

App: Zillow

Price: FREE

The well-known online real estate community’s app allows you to search for nearby homes for sale and get “Zestimates” using your phone’s GPS. You can also filter homes by bedrooms and bathrooms, save your searches, and view full size photos.

App: Suburb Scout

Price: $1.99

Suburb Scout is an app that searches for possible neighborhood nuisances like airports, sewage plants, nuclear plants, landfills, railroads, and prisons. If you’re searching for a new home, this can be a useful tool in helping you make your decision.

App: Where

Price: FREE

Where is an app that provides information on the surrounding amenities of a specific area. You can find anything from nearby news, dining, movies, events, gas prices, coupons for local businesses, and reviews. Conveniently explore the area around a home without even getting in your car.

App: Karl’s Mortgage Calculator

Price: FREE

This app is useful for determining how much your monthly house payment may be.

App: iHandy Carpenter

Price: $2.99

Do you need a plumb bob, surface level, bubble level bar, steel protractor, and/or ruler, but you don’t find yourself often carrying around a carpenter tool kit? Then this app is for you!

App: Evernote

Price: FREE

This app is great when you're out looking at homes. There are a lot of things you need to remember about each home you look at. Evernote allows you to take notes, pictures, or even use the voice recording function so you can have all your notes handy. You can then load the information from Evernote right to your computer of laptop.

.

Troy Batson ~ Broker Duke Warner Realty 1033 NW Newport Ave Bend, Oregon 97701 541.678.3725 or 541.382.8262 troybatson@dukewarner.com troybatson.com

Will my Bend, Oregon home ever appreciate?

The bad news: It’s unlikely that we will ever see homes appreciate the way we did leading up to 2006.

The good news: It’s likely home prices will eventually rise, albeit modestly, and your home could appreciate.

So what do you look for in a home when buying to increase the chances of appreciation?

Location, location, location! It’s a real estate cliché, but it makes sense once an investor understands the impact of land value on appreciation.

The reason that land is an appreciating asset is because of supply and demand. Land is in limited supply, and no one is producing any more. The demand for land is constantly growing as the population increases. The reality is that the physical structure will likely depreciate over time. With regard to appreciation, homebuyers should look past the physical attributes of the home and focus how its location in the market will affect overall return.

Other considerations regarding the location of a home that is more likely to appreciate: Is the home in a more private and desirable cul-de-sac or on a more frequently used street? What is the condition of the neighborhood? What is the proximity to recreation such as golf courses, parks, and colleges?

• Buy during the winter. Often, many sellers who choose to sell during the wintertime are looking to sell quickly. Also, many homes listed for sale in the winter are generally not new homes and may consequently have price reductions. You will have less competition during the winter because most people don’t want to move during cold months. If you buy your home during a time when there is less competition, the chance of appreciation will increase.


• Be mindful of potential future development. Future development can change your property’s value for better or worse. Be mindful of the present state of local amenities as well as the future prospects for commercial and governmental development. The demand for real estate is affected by the availability of jobs, the availability of land, proximity to shopping, schools, parks, churches, population changes, desirability of an area, crime levels, zoning changes, etc.


• Consider cost-effective improvements. Certain improvements can increase the value of your home. However, other improvements, dollar for dollar, produce a low return. Plan carefully and make improvements that result in the highest level of appreciation for the money that you spend. If you make too many costly improvements, you will likely not recover those costs when you sell. Adding a garage door can get you a higher return on your investment than some other upgrades. A wood deck or a minor kitchen remodel can recoup a higher percentage of their costs than major remodeling projects such as adding a wing to your home. Remodeling your basement or adding an attic bedroom can also generally get you a high return.

When asking yourself, “Will my home appreciate?” it’s important to look beyond the physical attributes of the home and focus on the potential for land appreciation. When buying a home, concentrate on properties that provide opportunities for improvement to enhance the value of the land. If you are interested in tracking appreciation, visit the site of the Office of Federal Housing Enterprise Oversight (http://www.fhfa.gov/), which allows you to check the housing appreciation in your area.

Troy Batson ~ Broker

Duke Warner Realty

1033 NW Newport Ave Bend, Oregon 97701

541.678.3725 or 541.382.8262

troybatson@dukewarner.com

troybatson.com

Financial Wounds Heal with Planning, Discipline, Determination

Financial Wounds Heal with Planning, Discipline, Determination

"Discipline is the basic set of tools we require to solve life's problems. Without discipline we can solve nothing. With only some discipline we can solve only some problems, with total discipline we can solve all problems."-- M. Scott Peck, M.D., The Road Less Traveled

If you're like the majority of would-be homeowners today grappling with financial difficulties, take heart. The American Dream of owning a home is within your reach.

No matter how bad your financial situation is today, there are steps you can take to improve your ability to buy a home. According to the National Association of Realtors (NAR) 2009 Housing Opportunity Pulse Survey, down payment and closing costs are among the greatest obstacles to buying a home. Home prices are down and while it's a buyers' market, the current economic climate is tough right now. People are concerned about job security. High prices are taking huge bites out of tight budgets.

Fight the frustration with the best weapons of all, planning, discipline and determination.

In his book, The Road Less Traveled, M. Scott Peck, M.D. said, "Discipline is the basic set of tools we require to solve life's problems. Without discipline we can solve nothing. With only some discipline we can solve only some problems, with total discipline we can solve all problems."

The desire to own a home is only the first step. It's a good step, but it's one that requires careful consideration. How badly to you want to own a home? To what lengths will you go to achieve your dream? It's okay to brainstorm - dream even - about the home you will one day own. Dreaming is never enough. Action is required. There's no better time than right now to get started.

1. Write it down.

Get your dreams out of your head and onto a piece of paper. Ask yourself some tough questions and write down the answers. Here are some examples of questions you might ask. If you have a partner, include that partner in the conversation:

Why do I want to buy a home?

When can I realistically expect to be able to buy a home?

When will I buy a home?

What kind of a home will I buy?

Where will my new home be located?

What are the most important considerations in searching for my home?

How much should I expect to pay for a home?

How much money will I need to make a down payment on my home?

How much should I expect to pay for closing costs?

How long will I remain in my first home?

2. Examine obstacles.

This step requires total honesty. What is keeping you from achieving your dream? Systematically examine every obstacle. Evaluate reasons for the existence of each obstacle and identify multiple solutions.

3. Set goals.

Start from the end. Imagine where you will be in one year, two years or five years. Draw a road map if you have to and label the path you will take to get to where you want to be. Be sure to include the hurdles you will have to jump over and hoops you will have to jump through. There will be mountains to climb and rivers to cross. Now that you have identified the obstacles, you can deliberately eliminate them one at a time.

Some obstacles on your list might be:

• Overspending


• High debt-to-income ratio


• Poor credit score


• Lack of savings


• Not enough income

Some possible solutions on your list might be:

Overspending

Track spending for two weeks to see where money leaks occur in your budget. Create a strict budget. Separate wants from needs. Find ways to cut back such as packing a home lunch instead of eating out, carpooling to save gas, renting movies to watch at home instead of going to a theater.

High debt-to-income ratio

Make a list of creditors. List them in order based on the amount you owe each. Concentrate on paying off the smallest bills first. When one bill is paid, take the monthly amount of money you spent on that bill and apply it to the next. Make a commitment to avoid taking on any additional unnecessary debt.

Poor credit score

Now that you're accepting responsibility for your finances you can begin to improve your credit score today. Get a copy of your credit report. Federal law entitles you to one free credit report in a 12-month period from each major credit reporting agency. You can easily obtain your free report at http://www.annualcreditreport.com/. Dispute any errors. You can also call the three major nationwide consumer credit reporting companies for your free report:

• Equifax: 1-877-576-5734; http://www.equifax.com/


• Experian: 1-888-397-3742; www.experian.com/fraud


• TransUnion: 1-800-680-7289; http://www.transunion.com/

Do whatever you have to do to get in good standing with your creditors. Call them, negotiate with them, keep the promises you make to them. Show a sincere effort to rebuild your credit and you will find debtors are willing to help you achieve your goals. Pay your bills on time.

Lack of savings

Pay your bills, but pay yourself first. The loss of a job, illness, emergency repairs, travel and other unplanned expenses will throw your carefully-planned budget into chaos if you're not prepared. Identify a certain percentage of your income - start small if you have to - and put it away in an emergency fund. Eventually your emergency fund will grow and you will start a new savings account for your down payment!

Not enough income

If your expenses are higher than your income and you have shaved as many frills as possible from your spending, it may be time to take on a second job. Also, consider selling personal items you no longer need and are willing to part with in order to live your dream of owning a home. Look for higher-paying promotion opportunities at work.

4. Design your plan.

Your plan will include specific dates, goals and road markers on your map to success. Create a timeline and monitor it carefully. Review your plan each night before you go to bed. Identify milestones and celebrate when you reach those milestones. These can include paying off a bill, acquiring a certain amount of savings, reaching a goal income level and more.

5. Visualize yourself in your new home.

Can you see it? Can you feel the warmth of your new home around you? Can you actually imagine yourself living the American dream? Do it often. Close your eyes and feel the satisfaction of achieving your goal - a goal that once seemed impossible. Talk openly about the day you will move into your new house. Stay positive, focused and committed.

Troy Batson ~ Broker @ Duke Warner Realty 1033 NW Newport Ave Bend, Oregon 97701 541.678.3725 or 541.382.8262 troybatson@dukewarner.com troybatson.com

FHA Mistakes to Avoid

When buying your first home, there are many mistakes that can cost you thousands and hinder the process to get you into the home that is right for you.

One long-standing program that has assisted millions of first-time homebuyers is the FHA (Federal Housing Administration) mortgage program. An FHA loan is a loan the government agency insures against default. Approved lenders can issue these loans, which tend to be less restrictive to borrowers facing economic hardship.

Here are a few common mistakes to avoid when considering an FHA loan for your first home:

Failing to consider an FHA loan. If you are thinking of purchasing a new home, considering an FHA mortgage could be a vital step. The FHA program allows lenders to offer home loans to borrowers with limited or less-than-perfect credit histories. While FHA mortgages require that you pay a mortgage insurance premium, FHA mortgage rates could be lower than you would get otherwise.

Making a major credit purchase immediately prior to applying for a loan. Your debt-to-income ratio is a major determining factor in whether or not a lender will approve your loan application. Your debt-to-income calculation is based on your current debts and the percentage of that debt against your income. Major credit purchases will seriously alter that ratio sometimes enough to significantly hurt your chances for obtaining an FHA loan. You can also improve your debt-to-income ratio by paying off credit card balances or other outstanding loans.

Not reviewing your credit report. An FHA-loan approved lender will always look at your credit report and credit score. Your credit report gives the lender an idea of your debt, your ability to pay your bills on time, and your overall credit reliability. Before you apply for an FHA loan, review your credit report and score. It could contain errors that could affect your ability to purchase a home. Once you’ve carefully reviewed your credit report and are confident in your credit history and score, you should initiate the preapproval process.

Neglecting to save enough money upfront. While an FHA loan generally requires a lower down payment than other loan types, there are still upfront costs involved in an FHA mortgage. Ensure that you’ve budgeted carefully and saved enough for the necessary down payment. There are also fees and expenses due at closing for things such as mortgage processing, insurance, home inspection, and lawyers. Make sure you have a generous amount of savings above and beyond your down payment to cover any closing costs and upfront expenses.

FHA loans have helped countless homeowners in the past. An FHA mortgage may be a good fit for you as long as you avoid these common mistakes.

Troy Batson ~ Broker Duke Warner Realty 1033 NW Newport Ave Bend, Oregon 97701 541.678.3725 or 541.382.8262 troybatson@dukewarner.com troybatson.com

2011 Home Buyers Resolutions

Happy New Year! It's time to get out your pen, paper, and nearest napkin to write down your resolutions for 2011. Some of the most popular resolutions include: losing weight, eating healthy, drinking less, managing debt, managing stress, saving money, and resolving to stop making resolutions.

If one of your goals for 2011 is to become a homebuyer, here are 5 tips that will help you actually achieve your New Year's resolution to buy a home this year.

1. Determine exactly what you will be able to afford before even starting the buying process, and set a budget.

Utilize a mortgage calculator to help you determine what you can afford. The amount you're preapproved for isn't necessarily the amount you can afford. When you've analyzed your income and savings, stick to your budget. Don't even look at homes that are out of your price range. Resolve to live within your means so you're not in jeopardy down the road of losing a home you couldn't afford in the first place.

2. Save for a significant down payment.

No-money down loans are hard to obtain and extremely risky. With an FHA loan, you'll need at least a 3.5% down payment. However, a 5%-10% down payment for a conventional mortgage is a smart goal to set.

3. Clean up your credit before applying for a mortgage.

Ideally, to get the best interest rate, you want your FICO credit score to be 700 or higher. If you haven't pulled your credit report in the last 6 months, plan on going to annualcreditreport.com to pull your free credit report. You will not receive a free credit score from this report, but you can purchase your credit score here. By reviewing your credit report prior to applying for a home loan, you can determine what shape your credit is in, start working to improve your score, and dispute any errors that may be erroneously listed on your credit report.

4. Shop around for the best home loan.

Make sure you talk to at least three or four lenders before you sign your application. Try to include a "big box" lender, a small local lender, a credit union, and a mortgage broker. Use the information you collect from each lender to negotiate the best loan for you.

5. Hire a professional real estate agent.

As a first-time homebuyer, the best resolution you can make when deciding to buy a home is to consult a trusted, professional real estate agent to assist you with the process. Professional agents have access to properties in your desired area, market comparisons for homes available for sale, and the expertise to draw up an offer to present to a home seller. Find an agent that you connect with and trust to have your best interest in mind.

If you're currently renting but want to become a homeowner by the end of 2011, following these tips will help you succeed in achieving your New Year's resolution to buy a home.

Troy Batson ~ Broker
Duke Warner Realty
1033 NW Newport Ave
Bend, Oregon 97701
541.678.3725 or 541.382.8262
troybatson@dukewarner.com
troybatson.com

NAR's Positive Outlook for 2011

The National Association of Realtors (NAR) is optimistic about home sales in 2011. Pending homes sales in November increased 3.5 percent, which indicates a gradual recovery for this upcoming year.

NAR chief economist Laurence Yun said, "All the indicator trends are pointing to a gradual housing recovery. Home price prospects will vary depending largely upon local job market conditions. The national median home price, however, is expected to remain stable even with a continuing flow of distressed properties coming onto the market, as long as there is a steady demand of financially healthy home buyers."

Low mortgage rates, high housing affordability, and a little economic growth are pushing the housing market toward a slight recovery. The high number of foreclosures is still keeping the market from recovering more quickly, however.

Other NAR projections for 2011 include:

- New home sales are estimated to rise 24 percent;
- Existing-home sales are projected to rise about 8 percent;
- Housing starts are expected to rise 21 percent;
- The unemployment rate is expected to drop in 2011.

We should expect some peaks and valleys, but it's important not to panic. In general, the trend is expected to be an increase over the next few years.

Troy Batson is a licensed broker in the State of Oregon ~ troybatson.com ~ Duke Warner Realty ~ 1033 NW Newport Ave. Bend, OR 97701 ~ (541)382-8262