How To Shop Around For A Mortgage, Part One

How To Shop Around For A Mortgage, Part One

Stone Bridge Mortgage_Mortgage Broker vs Bank Lender

 

Shopping for a Home Mortgage

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

For professional assistance with mortgages and related services, look no further than Stonebridge Mortgage Group. You can rely on Stonebridge Mortgage Group to help guide you through the home buying process. We help get you pre-approved for a mortgage and help with your real estate loans and other mortgage solutions, both residential and commercial. 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

 

Mortgage Rates Explained For Gresham First Time Home Buyers

Mortgage Rates Explained For Gresham First Time Home Buyers

Stone Bridge Mortgage_Mortgage Loans - Fixed Rate vs Adjustable Rate

 

What is the difference between a fixed-rate mortgage and an adjustable-rate mortgage?

Gresham home buyers will be faced with many decisions over the course of their home buying process. One of the things Gresham locals looking to buy a home need to be prepared for is choosing the type of mortgage they want.

Buying a home for the first time is a big responsibility. Stonebridge Mortgage Group helps first time home buyers in the Gresham area find the answers to their home buying questions so they can make the best decisions toward achieving their home buying goals. By arming yourself with common sense and the right knowledge, you can make the search for your home all the easier.

Fixed-Rate Mortgage vs. Adjustable Rate Mortgage

Gresham home buyers can get an idea of what each mortgage offers based on its name alone. A fixed-rate mortgage is, like it sounds, a mortgage that stays at the same interest rate for as long as you are paying down the loan, regardless of whether interest rates, in general, go up or down. On the other hand, an adjustable-rate mortgage can go up or down based upon the overall interest of the rate market. Some home buyers find adjustable mortgage rates tempting because it is sometimes possible to get an adjustable-rate mortgage at a much lower interest rate than a fixed-rate mortgage. However, the rate of an adjustable mortgage could rise quickly in a matter of a few years.

Other adjustable rate mortgages include a very low introductory mortgage rate for five or seven years, followed by a much higher rate. These loans are designed to be useful to Gresham home buyers who expect to live in their home a very short period of time, to refinance at a later date, or to flip the home for investment purposes. Gresham locals looking to buy a home should remember that while adjustable-rate mortgages can be a valuable home buying tool in certain situations, they can also be dangerous. Consider the possibility of your mortgage rate rising dramatically, and think seriously about the flexibility of your finances and whether it could support those types of fluctuations.

Stonebridge Mortgage Group Offers Guidance On All Mortgage Matters

For professional assistance with mortgages and related services, look no further than Stonebridge Mortgage Group. You can rely on Stonebridge Mortgage Group to help guide you through the home buying process. We help get you pre-approved for a mortgage and help with your real estate loans and other mortgage solutions, both residential and commercial. 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

 

What Percentage Of Your Income Can You Afford To Put Towards Your Mortgage Payment?

What Percentage Of Your Income Can You Afford To Put Towards Your Mortgage Payment?

Stone_Bridge_Mortgage_Simple Saving Tips For Hopeful Homebuyers

 

How Much Home Can I Afford?

Gresham locals looking to buy a house need to know how much they can afford to pay each month towards mortgage payments. Before you even begin looking for a home, you should have a solid idea of how much you can comfortably pay each month towards your home loan. There are a number of particulars to consider in order to figure out how much home you can afford.

Stonebridge Mortgage Group is eager to help Gresham locals take steps towards homeownership. Gresham home buyers should consider the following in their home buying process: What percentage of your income can you afford to put towards monthly mortgage payments? Do you use gross monthly income or take-home pay? Does that percentage include property taxes, private mortgage insurance (PMI), or homeowners insurance? Stonebridge Mortgage Group can help you answer those questions.

Consider Total Housing Payment, Not Just Mortgage

When figuring out how much you can afford, there is more to consider than just the mortgage payment itself. Gresham home buyers should also calculate property taxes and all housing-related insurance – homeowner’s insurance and PMI – into their monthly costs. Calculate your numbers based on your pre-tax income.

What Percentage Of Income Should Be Dedicated To Monthly Housing Costs?

Depending on who you ask, there are a number of suggested percentages that you could consider for your monthly housing costs and mortgage. For Gresham home buyers who want to be conservative, putting no more than 25% of your monthly income towards your mortgage and other housing payments is wise. Some people will even go as high as 35% or 45%, with 35% being about average and 45% being on the higher end of things. How much you spend will depend on your needs.

Keep in mind that the more you spend on monthly housing costs, the less you’ll be able to save for other things. You want to be prepared for possible costs down the road. If you find yourself needing a new car, if you have kids, or if you find yourself temporarily unemployed, you may find that keeping up with paying 35% of your income is too much of a strain. The most important thing is to choose a percentage of payment that you can keep up with. After all, if you aren’t able to comfortably pay for your housing costs then you may wind up losing your home.

For advice on all mortgage matters, rely on Stonebridge Mortgage Group. We are eager to help you become a Gresham homeowner!

Stonebridge Mortgage Group Offers Guidance On All Mortgage Matters

For professional assistance with mortgages and related services, look no further than Stonebridge Mortgage Group. You can rely on Stonebridge Mortgage Group to help guide you through the home buying process. We help get you pre-approved for a mortgage and help with your real estate loans and other mortgage solutions, both residential and commercial. Stonebridge Mortgage Group serves the greater Portland area and is located in Gresham, Oregon. Don’t wait to become a homeowner!

 

Call us today at 503.661.5580

 

How To Save For A Down Payment For Your First Home, Part 2

How To Save For A Down Payment For Your First Home, Part 2

Stone Bridge Mortgage Group_How To Save For A Down Payment For Your First Home, Part 2

One of the most important first steps Gresham locals can take towards home ownership is to begin saving for a down payment. Once Gresham home buyers know just how much of a mortgage they can afford, they should start saving for a down payment. By figuring out how much you need to save and how soon you’d like to buy a home, you’ll know just how much you need to save per year to put towards the goal of owning your own home.

Stonebridge Mortgage Group is eager to help home buyers in the Portland and Gresham area find the mortgage that is right for them and set our clients on the path to home ownership. Use our mortgage calculator to figure out the amount you can afford on a  mortgage loan, as well as how much you’ll need for a down payment. Then use the following steps to reach that goal of saving for your new home.

Make Room In Your Budget

You’re going to need to save a lot of money for a down payment, so you’ll likely need to either earn additional income, cut back on expenses, or both. Making room in your budget, though, will not only help you save the money you need for a down payment – it will also prepare you for managing for a tighter budget that is often required with homeownership.

Set Up An Automated Savings Plan

Automating the savings process can make it easier for Gresham home buyers to stick to their savings goal. Set up some sort of payroll savings plan. You should allocate a certain percentage or dollar amount of your regular pay to go directly into a savings account or money market account dedicated to accumulating the funds for your down payment. By making the process automatic, it also becomes invisible. The money goes directly into your savings account without you having to see it, which removes both temptation and the ability to spend those hard-earned funds.

Bank Your Windfalls

To make your savings easier, those looking to buy a home in the Portland or Gresham area locals should take any occasional windfalls and put them in the bank. This includes income-tax refunds, gifts received, bonuses, large commission checks, or even the sale of personal assets. This can help you make huge strides towards your savings goal.

Build Flexibility Into Your Savings Plan

Whatever the size of your required down payment for your dream home in the Portland or Gresham area,  home buyers should always be prepared and build flexibility into their savings plan. You’ll never know when there will be other demands on your finances. You can minimize stress on your finances by being prepared for unexpected emergencies. You may find yourself needing to cover major car repairs, replacement of a car, uncovered medical expenses, or even the temporary loss of a job. Establishing an emergency fund for such contingencies is not only smart but a necessity as a homeowner. In fact, before you even begin saving for a down payment you’ll need to be sure that you have an emergency fund in place.

Stonebridge Mortgage Group Offers Guidance On All Mortgage Matters

For professional mortgage solutions, look no further than Stonebridge Mortgage Group. You can rely on Stonebridge Mortgage Group to help guide you through the entire home buying process. We help you with the pre-approval process and assist with real estate loans and other mortgage services, both residential and commercial. Stonebridge Mortgage Group serves the greater Portland area and is located in Gresham, Oregon. Don’t wait to buy your new home!

Call us today at 503.661.5580

 

How To Figure Out How Much Of A Mortgage You Can Afford

How To Figure Out How Much Of A Mortgage You Can Afford

Stone Bridge Mortgage_How to Calculate a Mortgage

 

Aim for a Mortgage Budget You Can Comfortably Afford

When it comes to buying a home, one of the first things Gresham locals should do is find out just how much of a home they can afford. The overall cost of the home you hope to buy will determine how much you need to qualify for on your mortgage loan and how much of a down payment you’ll need to have saved. Gresham home buyers should figure out how much of a mortgage they can afford before looking for a home. Better to know what your budget is and stick to it rather than get your hopes up for a house that is over your limit.

The 28/36% Rule

Most financial advisers agree that people should spend no more than 28 percent of their gross monthly income on housing expenses and no more than 36 percent on total debt. That includes housing as well as things like student loans, car expenses, and credit card payments. The 28/36 percent rule is the tried-and-true home affordability rule that establishes a baseline for what you can afford to pay every month.

Calculate Your Income and Expenses

To figure out how much of a mortgage payment you can afford, follow these steps:

  1. Figure out how much you (and your partner or co-buyer, if applicable) earn each month. Include all revenue streams, from alimony and investment profits to rental earnings.
  2. Then, list out all housing costs and your total down payment. Include annual property tax, homeowner’s insurance costs, estimated mortgage interest rate, and the loan terms. The popular choice is 30 years, but some people opt for shorter loans.
  3. Lastly, tally up your expenses. This is all the money that goes out on a monthly basis. Be accurate about how much you spend, as this will dictate what you can reasonably afford.

Once you know all of your income and debt, you’ll be able to figure out how much you can afford to put towards mortgage and housing payments each month. With Stonebridge Mortgage Group’s mortgage calculator, you can then figure out what your monthly payment on a house would be based on the total cost and your down payment. Gresham home buyers should remember that staying within budget is always the best choice. Stretching your funds too thin can lead to financial disaster. Gresham home buyers who need further advice on mortgages can rely on Stonebridge Mortgage Group.

Stonebridge Mortgage Group Offers Guidance on All Mortgage Matters

For a professional who can assist you with mortgages and related services, look no further than Stonebridge Mortgage Group. You can rely on Stonebridge Mortgage Group to help guide you through the entire home buying process. We help get you pre-approved for a mortgage and help with your real estate loans and other mortgage solutions, both residential and commercial. Stonebridge Mortgage Group serves the greater Portland area and is located in Gresham, Oregon. Don’t wait to get assistance with buying your first home! Call Stonebridge Mortgage Group.

 

Call us today at 503.661.5580

 

Tips for Gresham First Time Home Buyers, Part 1

Tips for Gresham First Time Home Buyers, Part 1

Stone Bridge Mortgage Group_5 Types of Mortgage Loans Every Homebuyer Should Know About

Buying a home for the first time can be an exhilarating and nerve-wracking experience all at once. On the one hand, buying a home means taking the first steps toward long-term stability. On the other hand, if you are underprepared for buying a home in Gresham, you could easily find yourself in over your head. Gresham locals looking to buy a home for the first time can feel more confident with the home buying process with Stonebridge Mortgage Group. We’re here to walk you through the steps you need to prepare yourself for buying your Gresham home.

Pay Off All Debt and Build an Emergency Fund

Even if the monthly house payments are similar or cheaper than the current cost of renting your home, owning a home is often still more expensive than renting. Gresham locals will find that, as a homeowner, you are responsible for all of the maintenance and upkeep costs. To make sure you can keep up with these costs, make sure you are debt-free and have an emergency fund of three to six months in place to cover the expenses that come with owning a home. Having an emergency fund to fall back on when huge expenses come your way means you won’t have to stress or worry about falling behind on house payments. Once your debts are gone, stay debt-free as long as you can manage. Gresham locals looking to buy a home should especially be wary of taking on additional debt in the middle of buying a house, because it could delay your approval for a mortgage.

Determine How Much House You Can Afford

Decide on a budget before looking for a home. When shopping for a home in Gresham, you don’t want to get too emotionally attached to a home you can’t afford. Make sure you have enough money not only to pay for your monthly mortgage, but also for HOA fees, taxes, insurance, and so on. Your monthly housing costs should be no more than 25% of your monthly take-home pay.

For example, if you bring home $5,000 a month, 25% of your monthly income is $1,250. Based on a 15-year mortgage with a 4% fixed interest rate, here are the home options you can afford (not including taxes and insurance):

  • $187,767 home with a 10% down payment ($18,777)
  • $211,238 home with a 20% down payment ($42,248)
  • $241,415 home with a 30% down payment ($72,424)
  • $281,650 home with a 40% down payment ($112,660)

Be sure to account for insurance and other fees in your monthly house payments.

Save for a Down Payment

When looking to buy a home in Gresham, it will benefit you most to save for a down payment of 20% or more. With a down payment of 20%, you won’t have to pay for private mortgage insurance, which protects the mortgage company in case you can’t make your payments and end up in foreclosure. There are first-time home buyer programs that offer lower down payment options, but they do end up costing you more in the long run.

The same thing applies to mortgage terms. With a 15-year mortgage term, your monthly costs will be higher but you’ll pay it off more quickly and save thousands of dollars. Carefully consider your options before making a final decision.

Save for Closing Costs

Gresham first time home buyers may be wondering how much closing costs typically are. On average, closing costs are about 3–4% of the purchase price of your home. Your lender will give you a specific number so you know exactly what to bring on closing day. These fees pay for important steps in the home-buying process, including:

  • Appraisal
  • Home Inspection
  • Credit Report
  • Attorney
  • Homeowner’s Insurance

You will need to be ready to pay the closing costs upon closing deal. So it’s important to have money for this saved ahead of time.

Get Preapproved for a Loan

Once you have your down payment saved, it’s time to secure the rest of your home’s costs by talking to a mortgage lender. Getting preapproved for a loan and having a preapproval letter when you start the search for your Gresham home gives you a huge edge. Preapproval shows sellers that you’re a serious buyer, which is a great way for first-time home buyers to get ahead in a competitive housing market. To get preapproved, your lender will need to verify your financial information (proof of income, taxes, etc.) and submit your loan for preliminary underwriting.

Stonebridge Mortgage Group Offers Guidance On All Mortgage Matters in Gresham

For professional assistance with mortgages and related services, look no further than Stonebridge Mortgage Group. You can rely on Stonebridge Mortgage Group to help guide you through the home buying process. We help get you pre-approved for a mortgage and help with your real estate loans and other mortgage solutions, both residential and commercial. 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