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

 

Home Appraisals and Inspections

 

Stone_Bridge_Mortgage_Home Appraisals and Inspections

If you’ve begun looking for your first home, you’ve likely heard of a getting a home appraisal and home inspection. What exactly are home appraisals and home inspections, though? Is there a difference between the two? Are they really necessary?

Home Appraisals

A home appraisal determines the value of a house based on certain factors, including “comparables.” An appraiser will take a few things into consideration when deciding the market value of a home. For example, they often look at comparable homes in the area which have recently sold and certain amenities in the house. It is important to remember that an appraisal doesn’t decide the “worth” of the home, but the market value.

The appraisal helps determine how much money your lender will give you to buy the house. Having the home appraised is therefore necessary when seeking out a loan. If you’re selling a home, it’s more beneficial to you if the appraisal is high. When you’re buying, however, a low appraisal is better. Appraisals can differ from one appraiser to the next, but they’re usually closely based on the assessment of the above-mentioned factors.

Home Inspections

Home inspections involve an inspection of the house itself, focusing on things like structural issues. Generally, home inspections include a look at the roof, the heating and cooling system, plumbing systems, and electrical systems. While home inspections are not exhaustive and therefore may not uncover every possible issue, home inspections are still a very important step in the home buying process.

Some mortgage programs may require specific inspections. However, generally speaking, home inspections are not a hard requirement for every mortgage option. Still, it is best to choose to have a home inspection done anyway. Buying a home without inspections could potentially leave you open for some major issues. It’s better to spend the money on an inspection that could save you more costly expenses down the road.

Count on Stonebridge Mortgage Group for all your mortgage needs.

In addition to appraisals and inspections, there are a lot of ins and outs to familiarize yourself with over the course of the home buying process. 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 are in Gresham, Oregon. Don’t wait to get quality assistance with buying your home!

 

Call us today at 503.661.5580

 

How Does a Reverse Mortgage Work?

Stone Bridge Mortgage Group_Things To Know About Reverse Mortgages

What is a reverse mortgage?

A reverse mortgage allows homeowners of a certain age, 62 years and older, to borrow from their home’s equity without having to make monthly mortgage payments. As the borrower the homeowner may then choose to take funds in a lump sum, line of credit or via structured monthly payments. The repayment of the loan is required when the last surviving borrower vacates the home permanently.

On a traditional “forward” loan, you make payments and the amount you owe is reduced while the equity you have on the property increases over time. A reverse mortgage is the opposite. You make no regular payments, so as you draw out funds and as interest accrues on the loan, the balance grows and your equity position in the property becomes smaller.

How does it work?

First, you must access a portion of your home’s equity. The percentage is based on age of youngest borrower. When the mortgage is reversed, you make no monthly mortgage repayments. The funds you receive from a reverse mortgage are tax-free, and may be used for virtually anything. The loan from your reverse mortgage is repaid when you pass away or sell your home. After that, any remaining equity belongs to your heirs.

Something important to note is that in addition to the fact that there is never a payment due on a reverse mortgage, and there is also no prepayment penalty of any kind. In other words, you can make a payment at any time, up to and including payment in full without penalty.

How much can you receive on a reverse mortgage?

There are several factors that dictate the loan amount, including the age of the youngest borrower, value of the home or the HUD lending limit (whichever is less), the interest rates in effect at the time, any costs to obtain the loan (which are subtracted from the principal limit), and any existing mortgages and liens (which must be paid in full). The current HUD lending limit for 2019 is $726,525.

If there are multiple borrowers, the age of the youngest borrower will lower the amount available because the terms allow all borrowers to live in the home for the rest of their lives without having to make a payment.

Weigh the costs and benefits of taking out a reverse mortgage.

A reverse mortgage doesn’t work for everyone. If you do the math and find that, even with a reverse mortgage you will still be struggling to get by, it may be best not to use your equity at this timed. Do your research and plan carefully. Will the funds and accrued interest add up to more than your home is worth? For those who are thinking of moving to a new home anyway, it may be better to move now. Don’t use your reverse mortgage as a temporary solution.

For professional assistance with mortgages, look no further than Stonebridge Mortgage Group. You can rely on Stonebridge Mortgage Group to help guide you through the home buying process from start to finish. We help get you pre-approved for a mortgage and help with your real estate loans and other We serve the greater Portland area and are in Gresham, Oregon. Don’t wait to get quality assistance with buying your home!

Call us today at 503.661.558 to get started!

 

 

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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