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