Portland First Time Home Buyer

Home Buyer Tax Credit Extended for Some Buyers

2010-04-14T14:45:00.000-07:00

Many people are unaware that the First Time Home Buyer Tax Credit, as well as the current home owner credit, are extended for one year for Military personnel and the following:

US Foreign Services
US Intelligence
90+ Days of service in the armed forces

The extension will allow for purchase contracts to be accepted on or before April 30th, 2011.

You won't believe the sweetheart deal that the Indymac boys were given by the FDIC - please watch this short video

2010-02-08T10:32:00.000-08:00

http://TwitPWR.com/Dk2/

Quality of Life, at a Discount

2010-02-04T16:26:00.000-08:00

Check out this excellent article from Forbes regarding the Portland Real Estate Market:

Quality of Life, at a Discount Portland, Ore., makes our list for much the same reason that San Francisco does: It's a picturesque, culture-driven city with good local services and amenities. The city is still not particularly cheap for buyers--but it's cheaper than normal.

A family hoping to put down roots there would normally pay a 62% premium to go from renting to buying. In the third quarter of 2009, however, that premium shrank by 16 percentage points. At the same time, Moody's Economy.com anticipates that home prices will jump 19% over the next five years. That's partly because, like San Francisco, Portland has strict government limitations on building and a coastal location that keep sprawl in check.

"Portland has one of the most controlled environments in the country in terms of development rights," says Stuart Gabriel, director of the Ziman Center for Real Estate at the UCLA Anderson School of Management. "Those supply constraints will push prices up."

Great new offer from Fannie Mae on their foreclosed properties

2010-02-01T10:54:00.000-08:00

FannieMae Announces 3.5 Percent Seller Assistance on HomePath® Properties
Incentive Part of Ongoing Effort to Stabilize Neighborhoods

WASHINGTON, DC — Fannie Mae (FNM/NYSE) announced today that people purchasing a Fannie Mae-owned HomePath® property will receive up to 3.5 percent of the final sales price to be used toward closing cost assistance or their choice of appliances. The offer is available to any owner-occupant who closes on the purchase of a property listed on HomePath.com before May 1, 2010.

"Attracting qualified buyers to the market and reducing the inventory of vacant homes is critical to stabilizing neighborhoods and helping the market recover. Many families are taking advantage of the federal homebuyer tax credit to buy a new home so this is a great time for Fannie Mae to offer some additional help," said Terry Edwards, Executive Vice President of Credit Portfolio Management. "Homebuyers have the option to choose between financial assistance toward closing costs or new appliances for their home."

Properties eligible for this incentive are listed on www.HomePath.com and most listings include detailed property descriptions, photographs, community and school information and more. In addition, many Fannie Mae-owned properties are eligible for special HomePath Mortgage and HomePath Renovation Mortgage financing which offers homebuyers an opportunity to purchase with as little as 3 percent down.

FHA Changes: How Will They Affect You?

2010-01-28T09:48:00.000-08:00

You have heard of the big changes that will take hold this Spring in regards to FHA Financing – but I think it is important to take them in context and see how much (if any) these changes will affect you as a home buyer.

To quickly summarize the changes coming, here they are:

The Upfront mortgage insurance fee will increase by .500% to 2.25%.
The seller concessions have been decreased from 6% of the sales price to 3%.
For credit challenged borrowers (sub 580 credit scores), the minimum down payment required will be 10%.

I think the best way to illustrate this is to use an average home buyer profile and see how the numbers are affected.

Joe is a home buyer and has found a home priced at $250,000. He is planning on the 3.5% down payment option and having his closing costs credited by the seller. The closing costs are $5100 and the prepaid taxes, insurance and interest total $1750 for a total cost to close of $6850. Under the new FHA guidelines, we have 3%, or $7500, that the seller can credit on this price point, so we have the closing costs covered with room to spare.

The upfront mortgage insurance that is financed into the loan would currently total $4221.88 (1.750%). When added to our base loan amount of $241,250 we have a total loan amount of $245,471.88. At a rate of 5% the payment is 1317.75. When the upfront premium is changed to 2.25%, the funding fee for this borrower would equal $5428.13, taking the loan amount to $246,678.13 with a payment of $1324.22. The borrower’s payment is virtually the same, differing by only $6.47.

Lastly, Joe does not have great credit. We review his credit and notice that his mid score is 605. He has some late pays hurting his score but also has a credit card that is maxed out. He holds two other cards but they both have small balances. We advise Joe to transfer the balance across all 3 cards to get his balance on each card below 50% of the limit of each card (preferably below 33% of the limit). Joe makes the changes and we review his score the beginning of the following month – are mid score is now above 620, so we move forward with this loan approval.

FHA lenders (not FHA directly) have typically required borrowers to have a 620 mid score in order to lend to them. There are a few niche lenders that go as low as 530, but they require something else in return which is normally a larger investment from the borrower to offset the risk. The new change being made with FHA will not have much impact other than requiring these niche lenders to obtain 10% down payments on these risky borrowers before FHA will insure the loan.

I hope this example helps illustrate the new FHA changes and their true impact on you as a home buyer. Please call or email me anytime if you have questions.

Barney Frank Looking to Dismantle Fannie & Freddie

2010-01-25T09:01:00.000-08:00

Financial Services Committee Chairman Barney Frank (D-Mass) is looking to do away with Fannie Mae and Freddie Mac, the government chartered institutions that securitize mortgages. Mr. Frank's intention is to improve the oversight and regulation of this industry but unfortunately, he has no plan for how to replace these vital organizations if removed.

The purpose of Fannie & Freddie is to securitize mortgages so that they may be traded in the secondary market, freeing up bank/lender funds to loan more money to home buyers. This process keeps the market liquid and allows for the demand of borrowers to be met. Of course there might be a better way to conduct this process, but until one has been developed and purposed, let's hope we stay the course and not run into new issues in the housing market while we are still inching our way toward a recovery. In addition, making this announcement will only damage the stock value of these companies; totaling 5.4 trillion in bond assets and 1.7 trillion in unsecured debt.

Recent Changes to FHA Loans

2010-01-22T13:49:00.000-08:00

As a First Time Home Buyer, using the FHA loan is a very important tool in acquiring a home with lower out-of-pocket cost and very favorable terms. The recent changes are attracting a lot of attention, however they will not have much impact on your buying power. Most importantly, these changes will help ensure that the FHA stays around and helps new buyers become homeowners during this amazing real estate market.

The basic changes are:

The Upfront Mortgage Insurance premium has been increased .500% to 2.25%. This is typically financed into your loan. It does increase the loan amount, but in all honesty at the low prices and low rates of interest, this change will very little impact on your loan.
For borrowers with credit scores below 580, 10% will be the minimum down payment amount. This change makes perfect sense, and any of my clients that are in that credit score range work with me to improve their credit before buying a home to take advantage of better rates and lower downpayment requirements.
Decrease the allowable seller concessions from 6% to 3%. In some instances, this change might negatively impact a purchase in which considerable credits are being negotiated to the buyer. However, in the case of covering your closing costs, 3% will typically cover that amount - and any repairs the seller would like to credit you money for versus fix can now be requested to be completed by them before you take ownership of the home.

These changes will start in mid Spring and Summer, so if you are considering buying a home, now is a great time to get prepared.

Forecast for 2010

2010-01-11T14:39:00.000-08:00

Stock Market:
Has room to move higher but will have a hard time sustaining the gains. We will likely see stocks end the year near current levels. Until jobs increase, not much true growth will be realized.

Good stock picks for this year are in the Medical supply/service companies and also Insurance companies depending on how the new health care bill is structured.

Jobless #s:
In order to keep up with population growth 125,000 jobs need to be created each month. During times like these where we are losing thousands upon thousands of jobs - it will take decades to get back to 6% unemployment rates. I believe the norm moving forward will be far higher levels of unemployment.

Home Prices:
We are near the bottom, however home prices will likely decline during the summer months after the tax credit rush in the Summer. Prices will then climb back up and end slightly up on the year. 2011 and 2012 should yield around 3% annual appreciation.

Mortgage Rates:
They will go up, no question. We will likely see some inflationary pressure begin to push rates up, the gradual increase in rates is due to the Fed backing off and eventually canceling their mortgage backed securities purchase program (March 31st). We will likely see rates around 6% at the end of 2010, however they will likely peak around 7% during fluctuations in the market along the way.

It Still Makes Sense to Buy Versus Rent

2010-01-08T16:45:00.000-08:00

Nearly a full third of households are still renting. If you’re one of them, you could be paying a hefty price.

Before talking about purchasing a house, it’s important to note two things. First—and this is extremely important—the housing market is actually localized. So the outlook in your hometown may be different than another city across the state or on the other side of the country. Second, home prices are tied to employment. For example, if someone feels like their job is in jeopardy, it might be enough to stop them from making a move. So, if your local job market is feeling a pinch, the home prices in your area may be down as well.

But with all those factors under consideration, it still makes sense to buy instead of rent. In fact, renting may be costing you a bundle.

Let's look at an example…

If you are paying rent at $1,500 per month and your landlord increases your payment by a modest 5% each year, you would wind up paying just about $100,000 over a 5-year period! Worse yet, after forking over $100,000, you still would have nothing to show for it.

And speaking of having nothing to show for it, how about any improvements you might make to a rental property? It's not uncommon for renters to freshen up the paint, install new light fixtures or plant some nice flowers outside. But guess what… all your efforts, labor and the benefit of that improvement belong to the landlord, not to you.

With convenient down payment options still available for qualified buyers, affordable home prices and low interest rates, the very same money could have been used towards home ownership.

Even using a standard 30-year fixed program, a mortgage of $300,000 could be obtained with a total monthly mortgage payment—including property taxes and insurance—of around $2,200. Assuming a 25% tax bracket, this would be equivalent to the average amount spent on rent during the same period after your tax benefit.

And the benefits of home ownership are quite considerable. Because the mortgage is being paid down each month, equity is being built. After 5-years, the $300,000 mortgage could be reduced to $279,000, adding $21,000 to your net worth!

But if laying out the initial increase in monthly payment and having to wait for your tax benefit to show up next April is a tough nut to crack, the IRS wants to help. Instead of waiting to file for the tax benefits derived from your new home purchase, you can simply adjust the amount of your withholding. This allows you to have less tax withheld from each paycheck so you can handle the new mortgage payment more comfortably throughout the year. In essence, you are taking your tax refund as you go instead of letting Uncle Sam hold it all year, interest free.

Visit www.irs.gov and use the IRS withholding calculator. This very handy tool can quickly show you the impact that a change in withholding will do to your net paycheck. Remember to balance this with the expected refund and it is always a good idea to check with your tax advisor.

Don't fall victim to the national headline hype. Talk to a professional who understands your local market. And remember, buying a home is a big step, but it is almost always one in the right direction.

Goal Setting: Actually Achieve your New Year’s Resolutions

2010-01-07T17:13:00.000-08:00

Setting goals is paramount to achieving success at anything we do; from goals of losing weight, eliminating debt or receiving a promotion at work. The problem is many people are very uneducated on how to properly set and achieve their goals. When people fail at the goals they have set, it is rarely due to their inability to achieve them, but rather their lack of properly identifying the Why and the How. Below is a goal setting system I use and have found extremely successful in realizing my own goals.

6 Areas of Goal Setting
FAMILY FINANCIAL SPIRITUAL BUSINESS MENTAL PHYSICAL

To illustrate an example, let’s focus on Financial goal setting.

Step 1 - Define your Committed Objective
Ex. ‘Be free of credit card debt in 24 months’

Step 2 - Figure out the ‘why’ behind your Objective
Why is it important to you?
Ex. *Feeling in control of your finances
*Allocate more $$ toward cash reserve (safety)
*Have more freedom with your money

Step 3 - Who is your Champion?
This will be an advisor that can keep you accountable to your objective
Ex. Your Financial Planner or CPA

Step 4 - Action Steps
You need to put actions in place that will get you toward your goal on a daily basis
> Create Debt Elimination Plan
> Cut up credit cards so you do not use them
> Use cash and only pull out the amount you allow for spending each day

Step 5 - Accountability Structure
Create a system to eliminate the ability to fail
> Weekly call/meeting with your champion to keep you on target and motivated

The Basic Benefits of Home Ownership

2010-01-04T13:16:00.000-08:00

When I was a first time home buyer, I remember the anxiety and doubts I had about buying a home. Was it a good investment? Could I afford the type of home I wanted to live in? Would the possible costs of repairs put me in a bind financially? I did plenty of research, but what really pushed me forward to action was seeing all of my friends buying homes. I asked them why they felt so confident and they told me their parents convinced them, and looking at what prices their parents bought their homes and what the values were currently put $$ in their eyes and they were sold. I followed suit and spoke with my parents, relatives and so on and arrived at the same conclusion - over the long term real estate has always appreciated and before you know it, you have accumulated a large sum of equity.

It is always vital to figure out what you can truly 'afford' on a monthly payment level to determine if you are ready to buy (and I stress the word 'afford' because it has to include your ability to save for cash reserves and retirement). The big benefits are:

Appreciation - the value of your real estate will move up and down, but the trend is upward over the long term. The long-term is relative, and depending on what type of real estate market you buy into will dictate the term needed to reach the appreciation (or increase in value) level desired.
Leverage - there are very few investments you can buy where you can leverage up to 100% of the cost. Real Estate allows you to obtain a large asset, let's use a $250,000 home for example, for a few thousand dollars in cost (and in some instances for $0). This allows you the compounding appreciation on an investment vehicle worth $250k versus a stock where you have to pay full price for it. In a few years time, your $250k investment could be worth $295k - and that $45k increase is something you could likely not achieve on a smaller asset that you could not leverage. Along with leverage, owning your home can allow you to easily purchase an investment property with the equity earned in the home.
Tax Savings - the mortgage interest you pay to the bank, along with several other costs involved in owning real estate, are tax deductible allowing you to keep more of the money you earn. Depending on your tax bracket, the amount you save by being a home owner can be considerable.

There are many factors to consider when buying your first home. Please contact me anytime if you have questions and would like to learn more.

Mortgage Rates are Still Low but Days are Numbered

2009-12-21T09:14:00.001-08:00

I have been stressing this message for the past 6 months, and since I cried wolf earlier I am sure it is harder to trust me now, but try ;-)

I am pretty conservative, and I was certain that inflation would be of more concern right now to the Fed than it is. With the enormous amount of government spending to try and pull us out of this recession, and 1.25 Trillion of it being directed at supporting low mortgage rates, I felt that rates would have to start coming up sooner than later to avoid hyper inflation - but so far that is not the case. But what we do know for certain is that the Federal Reserve will stop buying mortgage backed securities (mortgage bonds) on March 31st of 2010. They have also recently decreased the frequency of their purchasing, about one half of the amount they were buying up during the majority of 2009. So what does this mean?

Mortgage rates will become more volatile. The swing in rates will likely be .250% every week. Working with a mortgage professional that tracks the mortgage bond market as well as government policy is a must in order to lock in rates at their low points.
Mortgage rates will start to climb. The trend will be upward, and come March 31st, they will likely begin to climb quickly.

You First Time Buyers know that the current housing market is in a perfect storm; with low rates, low housing prices and large amounts of inventory. Also, loan programs still exist that allow low down payments and flexible guidelines (gifted down payment, non-occupant co-borrowers, etc.). Strike while rates are still at their low point and buy a home while the prices are still low ... oh, and I almost forgot - you will get paid up to $8,000 by the government to buy a home! Need I say more?

Selecting a Target Price Range of Homes

2009-11-18T09:27:00.000-08:00

Determining the 'right' price range for you can be a challenge - the best place to start is by carefully monitoring your current spending habits for 30 days to see where your money actually goes each month. Surprisingly, most people when asked have no idea how much they spend each month on things such as groceries, going out to eat, entertainment, clothes and so on. The key to figuring out the proper housing payment for you is to know exactly where your money goes and control it by enforcing a spending plan on your spending.

For 30 days, track every single purchase you make. The best way to track this is to collect receipts for every purchase (even cash purchases) and tally up the totals each week.
Enter the weekly totals into the Spending Plan Worksheet and be sure to record the expenditures under the proper categories.
After you have tracked your spending for 30 days. Review the information and start to see where you might be overspending, underspending and so on. This is your chance to take control of your money and start directing it toward the things you really want.
Now try to work in a housing payment, keep in mind the property taxes, home insurance and other expenses that go along with a home. You will likely find that you need to reduce your spending in other categories in order to afford the home you are looking to buy.

The great thing about the spending plan is that you will now be able to weigh in all of your expenditures and be able to make decisions on whether giving up a few restaurant visits is worth buying a $225,000 home versus a $235,000 home.

For more information on budgeting and controlling your expenditures - please contact me at 503-488-1818 or mike@strategy7pdx.com.

Home Buyer Tax Credit - The New Credit is Signed into Law! Here are the Details ...

2009-11-06T11:28:00.000-08:00

The revised Home Buyer Tax Credit has been signed into law today. Below are the details as well as some frequently asked questions to help you determine your eligibility. Please call me at 503-488-1818 if you have additional questions or concerns.

Who Gets What?
First-Time Homebuyers (FTHBs): First-time homebuyers (that is, people who have not owned a home within the last three years) may be eligible for the tax credit. The credit for FTHBs is 10% of the purchase price of the home, with a maximum available credit of $8,000 Single taxpayers and married couples filing a joint return may qualify for the full tax credit amount.
Current Owners: The tax credit program now gives those who already own a residence some additional reasons to move to a new home. This incentive comes in the form of a tax credit of up to $6,500 for qualified purchasers who have owned and occupied a primary residence for a period of five consecutive years during the last eight years. Single taxpayers and married couples filing a joint return may qualify for the full tax credit amount.

What are the New Deadlines?
In order to qualify for the credit, all contracts need to be in effect no later than April 30, 2010 and close no later than June 30, 2010.

What are the Income Caps?
The amount of income someone can earn and qualify for the full amount of the credit has been increased. Single tax filers who earn up to $125,000 are eligible for the total credit amount. Those who earn more than this cap can receive a partial credit. However, single filers who earn $145,000 and above are ineligible. Joint filers who earn up to $225,000 are eligible for the total credit amount. Those who earn more than this cap can receive a partial credit. However, joint filers who earn $245,000 and above are ineligible.

What is the Maximum Purchase Price?
Qualifying buyers may purchase a property with a maximum sale price of $800,000.

What is a Tax Credit?
A tax credit is a direct reduction in tax liability owed by an individual to the Internal Revenue Service (IRS). In the event no taxes are owed, the IRS will issue a check for the amount of the tax credit an individual is owed. Unlike the tax credit that existed in 2008, this credit does not require repayment unless the home, at any time in the first 36 months of ownership, is no longer an individual’s primary residence.

How Much are First-Time Homebuyers (FTHB) Eligible to Receive?
An eligible homebuyer may request from the IRS a tax credit of up to $8,000 or 10% of the purchase price for a home. If the amount of the home purchased is $75,000, the maximum amount the credit can be is $7,500. If the amount of the home purchased is $100,000, the amount of the credit may not exceed $8,000.

Who is Eligible fort FTHB Tax Credit?
Anyone who has not owned a primary residence in the previous 36 months, prior to closing and the transfer of title, is eligible. This applies both to single taxpayers and married couples. In the case where there is a married couple, if either spouse has owned a primary residence in the last 36 months, neither would qualify. In the case where an individual has owned property that has not been a primary residence, such as a second home or investment property, that individual would be eligible.

As mentioned above, the tax credit has been expanded so that existing homeowners who have owned and occupied a primary residence for a period of five consecutive years during the last eight years are now eligible for a tax credit of up to $6,500.

How Much are Current Home Owners Eligible to Receive?
The tax credit program includes a tax credit of up to $6,500 for qualified purchasers who have owned and occupied a primary residence for a period of five consecutive years during the last eight years.

Can Homebuyers Claim the Tax Credit in Advance of Purchasing a Property?
No. The IRS has recently begun prosecuting people who have claimed credits where a purchase had not taken place.

Can a Taxpayer Claim a Credit if the Property is Purchased from a Seller with Seller Financing and the Seller Retains Title to the Property?
Yes. In situations where the buyer purchases the property, even though the seller retains legal title, the taxpayer may file for the credit. Some examples of this would include a land contract or a contract for deed.

According to the IRS, factors that would demonstrate the ownership of the property would include:

Right of possession
Right to obtain legal title upon full payment of the purchase price
Right to construct improvements
Obligation to pay property taxes
Risk of loss
Responsibility to insure the property
Duty to maintain the property

Are There Other Restrictions to Taking the FTHB Credit?
Yes. According to the IRS, if any of the following describe a homebuyer’s situation, a credit would not be due:

They buy the home from a close relative. This includes a spouse, parent, grandparent, child or grandchild. (Please see the question below for details regarding purchases from “step-relatives.”)
They do not use the home as your principal residence.
They sell their home before the end of the year.
They are a nonresident alien.
They are, or were, eligible to claim the District of Columbia first-time homebuyer credit for any taxable year. (This does not apply for a home purchased in 2009.)
Their home financing comes from tax-exempt mortgage revenue bonds. (This does not apply for a home purchased in 2009.)
They owned a principal residence at any time during the three years prior to the date of purchase of your new home. For example, if you bought a home on July 1, 2008, you cannot take the credit for that home if you owned, or had an ownership interest in, another principal residence at any time from July 2, 2005, through July 1, 2008.

Can Homebuyers Purchase a Home from a Step-Relative and Still be Eligible for the Credit?
Yes. As long as the person they buy the home from is not a direct blood relative, the purchase would be allowed.

If a Parent (Who Will Not Live In The Property) Cosigns for a Mortgage, Will Their Child Still be Eligible for the Credit?
Yes, provided that the child meets the other requirements for the tax credit.

Interest Rates are on the Rise

2009-10-26T12:00:00.000-07:00

All of you first time home buyers and current home owners that have refinanced have enjoyed the amazingly low interest rates we have experienced the majority of 2009. Being able to secure fixed rates below 5% will save you homeowners thousands upon thousands of dollars over the life of your loans. What is important for those of you who have NOT purchased your home yet or have waited to refinance until rates were even lower - it is time to make your move.

I will touch on the basics as to why NOW is the time:

The Federal Reserve is going to stop buying mortgage backed securities soon. Currently, the government is buying 80% of these bonds. These bonds are comprised of the mortgages you and I have on our homes. The investor demand for these bonds directly correlate to the rates on the mortgages. With the government stepping away from these investments, the large supply and largest buyer being removed will drive interest rates up.
Inflation is becoming the main concern with the Fed, and they will soon be looking at increasing the Federal Funds Rate. This increase will trickle through the economy and create an increases on all forms of lending as money becomes more expensive to obtain.
The government is issuing more and more debt to pay for the stimulus plan and these debt offerings compete with mortgage bonds for investor dollars. This will also bring the demand down and cause rates to move up as a result.

The great news is that home prices are still low, rates are still low and you can still purchase and refinance with low down payments/equity in the home. Be sure to take advantage of the great opportunities available.

HVCC on the way OUT

2009-10-23T10:13:00.000-07:00

The House Financial Services Committee has passed a new bill to remove the new appraisal rules/code of conduct and once again allow the mortgage bankers and brokers to order appraisals directly from the appraiser, select the appraisers we know and trust and be able to communicate with them freely. This is a huge step, as HVCC has been a large part of the continuing decline in market values and failed sales. This will be voted on by the House and Senate soon and we anticipate it being passed!

$8k Tax Credit Set to Expire

2009-10-19T19:07:00.000-07:00

The expiration of the $8,000 first-time homebuyer credit is only 52 days from today. For those who qualify for the $8,000 credit they must close on their transaction no later than November 30th. And although there has been much speculation about an extension of the credit; to date nothing has been passed by Congress so better to be safe than sorry.

Market Snapshot for September 16th, 2009

2009-09-16T08:27:00.000-07:00

The stock market is at 2009 highs today and gaining strength in part by comments from Warren Buffet - stating recently that we have seen the worse of the housing crisis and that the US economy has bottomed out. Let's hope the famous billionaire investor is right. Mr. Buffet's comments were inline with Fed chairman Ben Bernanke's comments yesterday in which he stated the recession is technically over. In the same breath, he stressed that recover - especially in the job market, would be slow.

The year over year core rate of CPI (Consumer Price Index) is up 1.4% helping boost the view that no inflation is on the horizon. This is good news for the Bond market and should help improve mortgage rates!

FHA & USDA - great loan options for home buyers

2009-09-10T14:29:00.000-07:00

The FHA and USDA are not new, and the loans they offer have been around for years but with the lack of lending options in the private sector - these government loan options have gained an enormous amount of popularity ... and for good reason.

Down payment is the major hurdle for most home buyers, especially first time home buyers. FHA allows for a 3.5% down payment, of which the entire down payment can be gifted from a family member. Coupled with the $8,000 first time buyer tax credit (which you can apply to your 2008 return and obtain this year) creates an amazing buying opportunity with the low mortgage rates available and low home prices. In addition, the seller is allowed to contribute credits toward closing costs in the amount of 6% of the sales price!

The USDA loan program allows 100% financing and no mortgage insurance! This is obviously an incredible loan, however it is limited to certain rural areas (Wilsonville, Sherwood, Newberg, etc.) and income limits. Give me a call to determine your eligibility for this loan. just like the FHA loan program, the seller can credit funds toward the closing costs to allow for a $0 out-of-pocket purchase.

The $8k tax credit is only valid on purchases that are closed on or before December 1st, 2009 - so act fast.

Is HVCC On the Way Out?

2009-08-21T10:43:00.000-07:00

The new appraisal guidelines have been hurting the ability for new home buyers to purchase homes and many current home owners from taking advantage of the great low rates today by refinancing. The good news is the big issues with the appraisal process is now getting some media coverage and coming under fire.

The intent of HVCC (Home Valuation Code of Conduct) was a noble one; in that they want to keep the appraiser (3rd party assessor of home value) to not be influenced by the lenders to inflate or support a given value. The problem is that the process created to order appraisals has created a situation in which appraisers are working in areas in which they are not experts, being ultra conservative in order to stay in the various pools of appraisers that lenders use, not to mention adding additional costs to the consumer with extension fees of rate locks and additional appraisals.

There will likely be an 18 month moratorium on the HVCC while the impact of its inception is researched - let's hope this is enacted soon!

Strategy7 First Thursday Event: Art Drawing Winners

2009-08-07T08:57:00.000-07:00

Good morning everyone! Thank you so much for attending last night! We had a great turn-out and we enjoyed having you at our office to enjoy the art and conversation. Kristin and Carrie (are two featured artists) wanted to thank you all as well!

We drew the names this morning for the art give-away and here are the winners:

Jennifer Conley
Matt Ricker

Congratulations! We will arrange with both of you for pick-up of the art work.

Again, thank you for making last night such a great time! We hope you enjoyed it as much as we did. We look forward to having another First Thursday event very soon!

The $8,000 Tax Credit Expires December 1st

2009-08-06T10:56:00.000-07:00

If you are a first time home buyer (which includes those of you that have not owned their home in over 3 years) I strongly advise you look into your buying options soon. Prices are very attractive and based on the sales data from June, the bottom in prices is very close if not already here. In addition, interest rates on mortgages are very low as well. Rates will fluctuate throughout the year but the long term trend is certainly up, so keep in mind that with an upward trend in rate, your buying power becomes diminished.

One final note to keep in mind - the $8k tax credit is a fully refundable credit. this means that regardless of whether you are already getting a return after you file, you will get an additional $8,000! If you end up owing taxes, the credit will offset the amount you owe and you keep the difference ... in cash.

If you are a first time buyer and interested in learning more about home ownership, please give me a call.

Tips on Preparing to Buy Your First Home

2009-07-29T09:37:00.000-07:00

Often times people stumble upon being a home owner. They go to an open house, or see a For Sale sign by a nice looking house and they slowly began to all in love with the concept of going from a renter to an owner. I think 99% of people fall into this category (which is fine), but far too many people stumble into the financing aspect as well which is not fine. Too many home buyers start the process by looking for a home, falling in love with one, and then begrudgingly meander about searching for a loan to get the house. I cannot stress enough how important it is to review your financial position and goals BEFORE you fall in love with a house.

First time buyers do not typically know all the costs involved in home ownership, or start to look more closely at their savings and retirement goals before taking on a housing payment. Most first time buyers are pretty young and have a lot of working years ahead of them - but it is SO important to start looking at retirement at this phase in your life because you have complete control over where you end up at the end of your working career. By reviewing your current income, expenses and controlling the flow of your funds with a spending plan, you can start to figure out how much you need to invest and save each month and how much you can truly afford in a housing payment. Knowing these figures empowers you to focus on homes that are affordable for you and are in line with your overall financial goals. If you are a first time home buyer and interested in completing this process, feel free to contact me to learn more.

Existing Home Inventory at 22 Month Low (That's good news)

2009-07-23T15:46:00.000-07:00

RMLS released this information for the Portland Metro Area. The stats show that housing inventory fell for the fifth consecutive month and is representing increased sales activity. The current inventory level is 8.2 months. This is a great indicator that the real estate market is starting to see some improvements. First time home buyers are a major contributor to this pick-up in sales activity, as the $8,000 first time home buyer tax credit plus very low interest rates are motivating them to take action.

With low down payment options, as well as $0 down loan options for certain areas of town - this is a great time to investigate your buying options.

Importance of a Good Realtor

2009-07-06T08:20:00.000-07:00

Over the weekend I heard from several new clients interested in buying a home. I was happy to learn that the majority of these people were either already working with a Realtor or wanted a referral to one as they understood the value a Realtor provides. Now, the main reason these future home buyers called me was because the Realtor they are working with stressed the importance of getting their loan options figured out before they fell in love with a house. With mortgage lending as tight as it is these days, it is really important to review your loan options and get approved before you start looking at homes, and good Realtors know this. This is just a small example of the value of a good Realtor.

A Realtor knows the market and what a property 'should' be priced at. Armed with this knowledge, your ability to negotiate a fair market price are much higher than going at it alone. In addition, it is always easier to have someone else negotiate on your behalf, especially when it comes to price.

Realtors also know about properties that are about to come on the market, or homes that were recently taken off the market that will be put back on soon that may be a good buy for you, since they study the local market on a daily basis.

Structuring the purchase is also where the Realtor adds a lot of value. Good Realtors know the down payment options, how to apply seller credits and get the most for you as a buyer.

If you are preparing to purchase a home, second home or investment property and do not have a good Realtor to work with, I suggest you ask your friends/family/co-workers for a trusted Realtor to start helping you right away.