How To Shop Around For A Mortgage, Part Two

Stone Bridge Mortgage_Mortgage Broker vs Bank Lender

 

Gresham first-time home buyers may feel daunted with all that the information that comes along with buying a home. However, Gresham home buyers shouldn’t feel overwhelmed. By carefully educating themselves, they can ensure that they get the best experience when shopping for a home. Stonebridge Mortgage Group is eager to help our Gresham clients understand the ins and outs of mortgage.

Keep in mind that shopping around for your mortgage is important. Just like you wouldn’t settle on the first house you saw, you shouldn’t settle on the first mortgage you discuss with one lender. Shop around and do your research to find a mortgage that truly works for you.

To aid in shopping for your mortgage, here are a few more terms you should know about when shopping for a mortgage:

Interest Rates

To make sure your mortgage is affordable, it is crucial to get the best interest rate possible. Do your research to find out what the latest mortgage interest rates is before seeking out a mortgage lender. This means you will know what to expect and prepares you for potential negotiations. For example, if you know that the national interest rate average is around 4.5% in the morning and a particular lender offers you 5%, you know you have room to negotiate. Get quotes from at least four lenders to compare your options, but make sure you are comparing rates on the same types of loan.

Points

When speaking to potential lenders, ask about how many points you will have to pay to obtain the specific interest rate. Mortgage points are pre-paid interest. One point equals 1% of the loan amount. The more points you pay upfront, the lower your loan’s interest rate. This can be beneficial for Gresham home buyers in the long run.

Annual Percentage Rate (APR)

Although some people use “APR” and “interest rate” interchangeably, your APR is something very specific. Your Annual Percentage Rate shows the true cost of obtaining a loan, including points, the interest rate, broker fees, and any other charges. Ideally, Gresham home buyers want to aim for an APR that is as low as possible, because a lower APR means you are getting a better deal.

After taking into consideration the type of loan, interest rate, repayment terms, and APR Gresham home buyers can sit down and make the choice about which loan is best.

Locking In Your Rate

The next step for Gresham home buyers, after finding a mortgage loan that suits them and receiving preapproval, is to ask the lender to lock in the interest rate and provide you with a document in writing that states the interest rate you locked in, the number of points you must pay, and how long the interest rate will be locked in before the offer expires.

This is a way to secure your mortgage being what you need it to be. Locking in an interest rate means that even if interest rates rise within the specified time that you were guaranteed, you can still option a mortgage loan for the lower rate that you locked in. However, this can also work the other way. Should the interest rate lower within that time, you could be stuck with a higher rate. All things considered, though, it is generally a wise idea if to lock in your interest rate if you are serious about purchasing a home soon.

After all of the above, it is time to shop around. There are a variety of ways to shop around for a mortgage in today’s market – whether it be by going to an independent mortgage broker, calling local banks and credit unions, or shopping online. Carefully consider your options before committing. If you have any questions about mortgages, you can always rely on Stonebridge Mortgage Group for help.

Stonebridge Mortgage Group Offers Guidance On All Mortgage Matters

Stonebridge Mortgage Group serves the greater Portland area and is located in Gresham, Oregon. Don’t wait to get quality assistance with buying your home!

Call us today at 503.661.5580

 

How To Shop Around For A Mortgage, Part One

Stone Bridge Mortgage_Mortgage Broker vs Bank Lender

 

Most home buyers, even beginners, know that you don’t settle on the first home you find. You’re meant to shop around. Something else Gresham home buyers may not know, however, is that it’s wise to shop around for a mortgage, too. Finding the right mortgage loan is incredibly important. Choosing your mortgage has a big impact on your finances for the foreseeable future.

Gresham home buyers should consider all of their mortgage options before settling on just one. Here’s a quick guide to understanding mortgages as you start shopping around:

The Stages of a Mortgage Application

  1. Pre-qualification: Before shopping for a house, Gresham home buyers should get a mortgage pre-qualification letter. In today’s competitive housing market, a pre-qualification letter lets your Realtor and other potential sellers know that you are serious about looking for a home. It acts as an assurance that you have the ability to by the home you are interested in. Remember that having a pre-qualification letter does not mean you’re approved for a mortgage. These letters informal and optional, but they just might ease sellers’ fears that financing will fall through if they accept your offer.
  2. Pre-approval: Gresham home buyers can get mortgage pre-approval after putting an offer on a home. Getting a pre-approval involves submitting a mortgage application to the bank. The bank will run your credit and research the home you want to buy. If you meet qualifications, they’ll give you pre-approval. This means that if all the conditions are met, the bank agrees to finance the home.
  3. Closing: This is where the mortgage is finalized and you become a homeowner.

Loan Types

The four most common types of institutional mortgage loans include conventional, FHA, VA, and jumbo mortgages. Gresham locals looking to buy a home should first research which types of loans they qualify for and which would be best suits your needs. Each type of loan has benefits and drawbacks.

  1. VA loans are guaranteed by the Department of Veterans Affairs. VA mortgages require as little as no down payment, but they are only available to qualified veterans.
  2. FHA loans are backed by the Federal Housing Administration and require as little as 3.5% down if you qualify. For Gresham home buyers who have trouble putting back savings, this can be a good option. The drawback, however, to putting less than 20% down payment is that you will be required to pay private mortgage insurance (PMI), a monthly payment used for security in case of default.
  3. Conventional mortgages require at least 20% down and don’t require PMI. Generally, a conventional loan the best choice for Gresham home buyers who have enough money in savings to cover the down payment and associated closing costs.
  4. Lastly, jumbo mortgages must be used if you are financing more than conventional conforming loan limits. Due to their amount, these loans have special restrictions and credit requirements.

Repayment Terms

Your repayment term is the term over which you pay back your mortgage. The two choices Gresham home buyers have for repayment terms include a fixed interest rate mortgage, where the interest rate remains the same over the life of the loan, or an adjustable interest rate, where the interest rate can decrease or increase at specific intervals such as annually.

  1. Fixed-rate mortgages tend to be a safer option, especially for Gresham families who plan on staying in a home for more than a few years. There are many different mortgage terms to choose from, such as mortgage terms of 15, 20, or 30 years. 30 years is the most common mortgage rate terms and keeps your monthly payments low. However, while monthly payments on a 15-year mortgage are higher, you ultimately save money because there is less interested accrued over 15 years than over 30.
  2. Adjustable-rate mortgages can save you a lot of money if you play on living in the residence a short time. Your interest rate is much lower than a fixed-rate mortgage for the first five or seven years, but will then adjusts to the average interest rate every year thereafter, which could be much higher. If you still own the home, your mortgage payment could go up dramatically, so it is riskier.

Stonebridge Mortgage Group Offers Guidance on All Mortgage Matters

Stonebridge Mortgage Group serves the greater Portland area and is located in Gresham, Oregon. Don’t wait to get quality assistance with buying your home!

 

Call us today at 503.661.5580

 

How To Prep Your Credit To Buy A Home

Stone Bridge Mortgage Group_Loans to Help Gresham Borrowers Build Credit

 

Gresham Locals Looking To Buy Homes Need To Build Credit

One of the most important things to have in order as you prepare to buy a home is your credit score. Gresham home buyers should know that their credit score plays a huge role in being able to secure a mortgage. Conventional mortgage lenders will typically want a FICO score of at least 720, or in some cases 740, but those with a score above 580 may still qualify for an FHA loan.

In order to build your credit up to where you need it, try the following:

Review Your Credit Report

The first step Gresham home buyers should take, several months before they plan to get a mortgage, is to check their credit report for any issues. Checking two to three months in advance should suffice if you generally pay your bills on time. This leaves you time to correct any possible errors. However, if you have late payments or other derogatory items on your account, check six to nine months in advance.

Dispute Any Inaccuracies

Check closely for any inaccuracies on your credit report. For example, there may be an item you’ve paid for that is marked as unpaid, or an account showing up that isn’t your own. If this happens, file a dispute with the credit reporting agency.

Have Several Tradelines

Gresham home buyers will find that conventional loans require at least three tradelines (any combination of credit cards, student loans, car loans, and so on) that have been active within the past 12-24 months. FHA loans only require two tradelines. While it’s fine to have more, if you have fewer you won’t be able to qualify for a mortgage. If you need to open additional tradelines, try getting a major credit card like a Visa or a Mastercard at least six months before you apply for a mortgage and using it for items you would buy anyway. Never charge more than 30% of your allowed limit and be sure to pay it off in full when you get your bill.

Leave Older Credit Lines Open

Older tradelines actually help boost Gresham home buyer’s credit scores. Even if you don’t use them often, keep them open. Use those credit cards every few months and pay off the balance in full so those tradelines remain active.

Avoid Opening New Credit Lines

Don’t open any new credit lines within up to six months before applying for a mortgage, as this can temporarily lower your credit score. Because the credit bureau doesn’t know how you’ll handle the new credit, it is a risk factor.

Stop Buying On Credit

Gresham home buyers may be tempted to rush out and charge new appliances or furniture for a new house before closing. This is a bad idea. Having a debt utilization ratio above 30 percent right before closing could disqualify your loan. Unless you can pay cash, wait to purchase the new furniture until after the loan is closed.

Don’t Shuffle Money Around

When Gresham home buyers apply for a mortgage, you’ll find that you’ll need to provide several months of bank statements for your checking and savings accounts. Suddenly having large transfers between your accounts will show on those statements. Leave your money and accounts the same for at least 3 months.

Stonebridge Mortgage Group Offers Guidance On All Mortgage Matters

You can rely on Stonebridge Mortgage Group to help guide you through the entire home buying process. We can help get you pre-approved for a mortgage and assist with real estate loans and other mortgage solutions—both Stonebridge Mortgage Group serves the greater Portland area and is located in Gresham, Oregon. Don’t wait to get quality assistance with your home buying needs!

 

Call us today at 503.661.5580

 

Reverse Mortgages Gaining Acceptance In Gresham

Stone Bridge Mortgage Group_Things To Know About Reverse Mortgages

Once Controversial Reverse Mortgages Gaining Acceptance in Gresham

Though some people remain skeptical of reverse mortgages, many are beginning to see reverse mortgages as a useful tool for those who lack enough savings to augment their retirement income. The bad reputation that Reverse Mortgages gained over the years was mostly due to overly aggressive brokers, some of whom reaped outsized commissions on loans to financially unsophisticated seniors.

The Federal Housing Administration, which insures the mortgages, has recently taken steps to impose stricter lending standards. These stricter standards make reverse mortgages safer and more predictable than they once were. Gresham locals who need assistance with augmenting their income may find that a reverse mortgage is the way to go.

New Reverse Mortgage Reforms

How are reverse mortgage loans different for Gresham homeowners now?

To remove the temptation of taking out too much at once, the reforms limited the amount of equity a homeowner can take out in the first year to 60%. Additionally, credit standards have been tightened. Gresham homeowners whose finances were not quite up to par can be required to put money aside in an escrow account to cover future expenses. Other basic requirements to take out a reverse mortgage include the homeowner being at least 62 years of age and having substantial equity in our home, as well the ability to keep up with taxes, insurance, and home repairs.

How Can A Reverse Mortgage Benefit Gresham Homeowners?

When utilized correctly, reverse mortgages can be an extremely useful financial planning tool for Gresham homeowners. As mentioned above, reverse mortgages can provide Gresham homeowners with additional retirement income. They can also act as a more cost-effective replacement for Long Term Care insurance, or to help Gresham locals put off taking Social Security and reap a higher monthly payment by delaying retirement.

Gresham Homeowners Can Learn More About Reverse Mortgages With Stonebridge Mortgage Group

For professional assistance with mortgages, look no further than Stonebridge Mortgage Group. If you’re ready to apply for a loan and want to go through the process online, Stonebridge Mortgage Group offers online applications. We also help get you pre-approved for a mortgage and help with your real estate loans and other Stonebridge Mortgage Group serves the greater Portland area and is located in Gresham, Oregon. Don’t wait to get quality assistance with buying your home!

 

Call us today at 503.661.5580

 

Important Information to Understand

  1. At the conclusion of a reverse mortgage, the borrower must repay the loan and may have to sell the home or repay the loan from other proceeds.
  2. Charges will be assessed with the loan, including an origination fee, closing costs, mortgage insurance premiums and servicing fees.
  3. The loan balance grows over time and interest is charged on the outstanding balance.
  4. The borrower remains responsible for property taxes, hazard insurance and home maintenance, and failure to pay these amounts may result in the loss of the home.
  5. Interest on a reverse mortgage is not tax-deductible until the borrower makes partial or full repayment.

 

Home Buying Made Easier in Gresham with Maximum Loan Increases for Freddie and Fannie

Stone Bridge Mortgage Group_Fannie Mae and Freddie Mac New Conforming Loan Limits for 2019

Federal Housing Finance Agency Raises Freddie Mac and Fannie Mae Maximum Loans For Third Consecutive Year

Gresham first time home buyers in need of a larger loan may find themselves in luck if they qualify for Fannie Mae and Freddie Mac loans. After a long period of maintaining the maximum conforming loan limits on mortgages to be acquired by Fannie Mae and Freddie Mac, the FHFA has decided to increase the loan limits. For 2006 to 2016, the FHFA did not opt to increase loan limits. This year, 2019, will make the third year of increasing loan limits for Fannie Mae and Freddie Mac loans.

Gresham Home Prices Are On The Rise

The original conforming loan limits for Fannie Mae and Freddie Mac were determined by the Housing and Economic Recovery Act of 2008. This act established the baseline loan limit at $417,000. Additionally, it was decided that, after a period of price declines, the baseline loan limit would not be allowed to rise again until home prices return to pre-decline levels. So why the change over the past three years?

Home prices across the country, and in Gresham, are on the rise. According to the FHFA’s third quarter 2018 House Price Index report, home prices increased 6.9%, on average, between the third quarters of 2017 and 2018. The maximum conforming loan limit in 2019 is, therefore, rising to match – from $453,100 to $484,350.

Gresham Home Buyers Will Be Able to Keep Up With Increased Home Prices

The increased conforming loan limit on Freddie Mac and Fannie Mae is good news for the Gresham home buyers. Those looking to buy a home in Gresham will more easily be able to keep up with price increases when the maximum loans they qualify are higher.

Looking For Help With Mortgage Services? You Can Rely On Stonebridge Mortgage Group!

We help get you pre-approved for a mortgage, and offer services for real estate loans and other Stonebridge Mortgage Group serves the greater Portland area and is located in Gresham, Oregon. Call us today for personal mortgage solutions to your home buying journey.

 

Call us today at 503.661.5580

 

Reverse Mortgages Are Becoming More Accepted

Stone Bridge Mortgage Group_Things To Know About Reverse Mortgages

Though reverse mortgages were once considered highly controversial, financial planners are beginning to see reversing your mortgage as a legitimate option for those who struggle with retirement savings. More and more people are finding it difficult to save up for a retirement fund. However, home equity “conversion” loans can aid those who have struggled to save by augmenting their retirement income. Part of the widely growing acceptance of reverse mortgages is due to the Federal Housing Administration tightening lending standards. Reverse mortgages are now a good tool for retirees.

What gave reverse mortgages such a bad reputation?

Put simply, overly aggressive brokers took advantage of the reverse mortgage system. These brokers gave loans to senior citizens who lacked financial savvy and profited from them in the form of large commissions. The system of reverse mortgages wasn’t polished enough, and during the Great Recession as many as 10% of all reverse mortgages fell into default.

Growing acceptance and higher standards

The FHA tightening the standards for those looking to reverse a mortgage helped to rectify a system that had previously made it easy to take advantage of clients. The newer standards make it harder for clients to make themselves vulnerable to financial disaster. For example, now the amount of equity a homeowner can take out in the first year is limited to 60%, removing the obvious temptation of taking out 100%. Taking out too much too soon can easily lead to the client being overwhelmed and causing their loan to go into default.

Credit standards were raised as well. Homeowners who don’t have robust finances or who have struggled with making payments in the past may now be expected to put money aside in an escrow account to cover future expenses. Additionally, to qualify for a reverse mortgage you must be at least 62. You must not only have substantial equity in your home, but also be able to keep up with taxes, insurance payments, and home repairs.

Balancing your funds while in retirement

If you decide to take out a reverse mortgage, it is recommended that you have another source of money to draw upon. For example, being able to draw funds from cash, home equity, and investments, can make your finances more stable. Having the choice to tap into different funds, depending on how the market is doing, can be extremely useful. When the markets are up, you can tap into your investments. When they’re down, you can shift to real estate.

Talk to the professionals at Stonebridge Mortgage Group about the possibility of reversing your mortgage.

For professional assistance and advice on reverse mortgages, look no further than Stonebridge Mortgage Group. If you’re ready to apply for a loan and want to go through the process online, Stonebridge Mortgage Group offers online applications. We can help you get pre-approved for a mortgage, walk you through the real estate loan process, and assist you with Stonebridge Mortgage Group serves the greater Portland area and are located in Gresham, Oregon.

 

Call us at 503.661.5580

 

Important Information to Understand

  1. At the conclusion of a reverse mortgage, the borrower must repay the loan and may have to sell the home or repay the loan from other proceeds.
  2. Charges will be assessed with the loan, including an origination fee, closing costs, mortgage insurance premiums and servicing fees.
  3. The loan balance grows over time and interest is charged on the outstanding balance.
  4. The borrower remains responsible for property taxes, hazard insurance and home maintenance, and failure to pay these amounts may result in the loss of the home.
  5. Interest on a reverse mortgage is not tax-deductible until the borrower makes partial or full repayment.

 

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