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.

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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