FIVE MORTGAGE TIPS FOR TODAY'S HOUSING MARKET

You want to beat the rising cost of homes and increasing interest rates by buying a home soon — but are you going to be able to get a mortgage? 
The latest Case-Shiller housing data shows prices have gone up a little over 12% in just a year, and the National Association of Realtors’ latest numbers are even more optimistic, showing a nearly 14% year-over-year increase. Meanwhile, the rate for a 30-year mortgage has shot up by more than a percentage point in the past three months and is now hovering a bit over 4.5%.
Of course, those home prices haven’t rebounded to anything close to their pre-recession peak in most markets, and interest rates are still low by historical standards, so if you’re thinking of buying a home sometime in the future, doing so sooner rather than later might make economic sense.
The “but” here is that getting a mortgage, though easier than it was a couple of years ago, is still a challenge for many Americans. Data from the Ellie Mae Origination Insight Report shows that in July, the average mortgage applicant approved for a conventional loan had a FICO score of 759. Meanwhile, even the ones who applied and were rejected had FICO scores averaging 726. This is actually an improvement over last year, when borrowers had an average FICO score of 763. But the days of waltzing into a bank with a 640 FICO score and getting pre-approved on the spot are over.
(MORE: Housing Report: Tight Inventory, Still-Rising Prices)
As a result, about a third of home purchases are being made by people — investors, foreign buyers, or wealthy Americans — who just plunk down cash for a house. That’s great if you happen to have $213,500 — the average amount of an existing-home sale in July, according to the National Association of Realtors — laying around, but if you don’t, here are some tips on how to give yourself the best shot at getting a mortgage.
Improve your credit score. ”Credit is getting a bit looser recently, but even people with high credit scores are being denied loans,” says Jed Kolko, economist at real estate site Trulia.com, an observation that’s borne out by that Ellie Mae data. Order your credit report from annualcreditreport.com so you know what you’re dealing with, especially if you’ve never checked your credit before. Getting any mistakes corrected should be your first order of business. After that, look to lower your utilization ratio — the percentage of your available credit you’ve used at any given time. The typical rule of thumb is to keep it under 30%, but lower is better.
Don’t open any new cards. This is old advice, but it’s even more important now that lenders have such high expectations. You might think adding a new credit card would help your utilization ratio, but applying for credit shortly before or during the application process pulls down your credit score. It could be only a few points, but that could affect your rate and even whether you’ll be approved for a loan at all.
Here’s the exception to this rule: If you’re new to the world of credit, apply for the best credit card you think you can get six months or more before you plan to begin the mortgage application process. Since you’ll ding your credit score a little bit, you want to space it out so you get the benefit that credit has on your utilization ratio without taking the hit for opening the new card.
(MORE: Rising Interest Rates and the Fate of the Housing Market)
Put more money down. ”Zero-down loans are rare nowadays compared with the bubble years,” Kolko says. That said, don’t despair if you don’t have 20% of the purchase price saved up.
“Lenders are more willing to work with consumers these days even if someone doesn’t have a perfect score,” says Ken Lin, CEO of CreditKarma.com. “For example, if you have a little lower credit score, but can put down 20% or maybe you only have 5% to put down but a great credit score, you can still qualify for a mortgage,” he says.
Pay down your debt. “Because home prices are rising faster than incomes, and also because mortgage rates are rising, the debt-to-income ratio will become a hurdle for more buyers,” Kolko warns. He says monthly payments have risen 20% in just a year thanks to the combination of rising home prices and interest rates.
“When you think about just your housing costs, your debt load— which includes taxes and homeowners insurance — should be 28% or less of your gross monthly income,” Lin advises. But once you add debt from credit cards and auto and student loans, the amount shouldn’t be higher than 36% of your income, he says. The Ellie Mae data shows that successful mortgage borrowers have an average housing debt-to-income ratio that’s even lower, at 24%.
Give yourself more time than you think you need. Improving your credit score and socking away a down payment takes time. Lin suggests giving yourself a six-month head start. In theory, credit report errors can be cleared up in 30 days or less, but an investigation last year found that getting even simple stuff fixed can drag on for months in some cases.




*courtesy of Time

PORTLAND, OREGON A POPULAR MOVING DESTINATION

Remember those reports about how Portlanders are more likely to move to Seattle than vice-versa?
It turns out there’s more to the story.
Portland is plenty popular, according to United Van Lines' annual tally of moving destinations.
Portland saw 42 percent more inbound moves than outbound during the peak summer moving season, placing it second in the nation for net migration.
Overall, Portland was the No. 7 most popular destination for movers and Seattle was No. 5.
St. Louis-based United credits the growing tech sector for the overall migration patterns, which show the Pacific Northwest and Northern California as the fastest-growing areas.
“The continued growing in the tech sector is drawing people to Northern California, but the high cost of living in Silicon Valley is causing tech companies and workers to migrate north to Seattle. Portland is also experiencing unprecedented growth attracting a range of millennials and retirees relocating for amenities such as public transit, green space, local arts and a vibrant urban culture,” said Michael Stoll, chair of the Department of Public Policy at the University of California, Los Angeles.
United Van Lines said the summer 2013 moving season was one of the busiest since the recession, with an 85 percent increase compared to the prior year.
Washington, D.C., had the dubious distinction of being both the most popular city to move to and the most popular city to move from.
United studied domestic moves between May 1 and Aug. 31, when approximately 35 percent of all household moves take place. Its data included nearly 45,000 interstate moves managed by United itself.



*courtesy of Portland Business Journal

HOW TO MAKE THE MOST OUT OF SMALL KITCHENS

Many people complain about small kitchens but tiny spaces aren't always to be dreaded. If you're selling your home and your kitchen is, well, compact, know that you can find ways to achieve big appeal with a little creativity.

Bring in the light. Sometimes small kitchens can be dark, making them feel even smaller. But if you remove the curtains from any windows in your small kitchen, it'll let light in and open up the area. Instead of curtains, you can use small blinds that are recessed inside the frame of the window. These are easy to clean and still provide some privacy even when the blinds are open.

De-Clutter the counter tops and the walls. Most people have a tendency to let kitchen clutter build up on the counter tops and walls. Removing items from the counters, kitchen table, and even off the walls will make the space feel bigger. Yes, I know these items on the counters are useful but when you're selling your home, a little inconvenience may help you receive a higher offer and you'll probably agree, that's worth it! Take the appliances and either store them in the kitchen cabinets or, if there isn't enough room, pack them up. You're moving soon, anyway. Clearing off photos and miscellaneous papers that are stuck on your refrigerator door or kitchen walls will also help make your kitchen look bigger. If you're tight for space, mounted storage units can be added to your kitchen walls to free up limited counter-top space. But again, too many storage units, even the decorative kind, will give people a feeling like the walls are closing in on them. The same goes for hanging pot racks from the ceiling. Be sure to leave some open wall space and to use storage units that aren't completely solid. The open units, if the shelves aren't stuffed, will give a less closed-in feeling.

Opt for lighter and brighter wall color. Going with lighter colors tends to open up a room. Light and bright colors are also very inviting and friendly, making them a perfect choice for the kitchen. You can use a darker accent trim to create some contrast. You can also use decorations including floral arrangements or even some colorful kitchen appliances to add spice to the kitchen.

Wall-mounted appliances and reduced counter-top depth. Wall-mounted or under-the-cabinets-mounted appliances can save valuable kitchen counter-top space. You might even have a way to wall-mount your kitchen faucet. In one small home design, the faucet was mounted to the wall, creating a very distinctive look. The counter-top was a standard 24 inches deep but elsewhere the counter-top was reduced just slightly down to 21 inches–very subtle and hardly noticeable but it allowed more floor space in a tiny kitchen. Small kitchens don't have to be an eyesore. Some even prefer less space because there's less to clean. If you know the audience you're marketing your home to, you can play up the home's best features–including, perhaps, a small, quaint, and simple kitchen.

*courtesy of Realty Times

THE EXPERTS AGREE, NO SIGNS OF HOUSING MARKET SLOWING DOWN

Despite all odds against the housing recovery, the market is steadily improving and housing experts do not expect the sector to lose its momentum any time soon.
Regardless of an inadequately housing supply, rising home prices reacting to strong demand and difficult lending environment, market expectations remain bullish on housing.
Nonetheless, housing is in its early stages of recovery and panelists at the Bipartisan Policy Center’s conference believe it’s not time for the Federal Reserve to take their foot off the bond-buying gas pedal just yet.
"There is a cyclical and structural nature to the problem," explained Paul Weech of Housing Partnership Network.
He added, "We haven’t solved for the underlying structural problem and if we revert back to the norm, we still have millions of homes trying to get back in the full market recovery."
One of the major factors still impacting the housing market is underwriting standards.
Fannie Mae senior vice president and chief economist Doug Duncan pointed out that there is a high correlation between the business cycle and the credit cycle, which will ultimately lead to an established fixed floor of the credit box.
"If in the regulatory process we can establish a fixed floor then we’ll change fundamentally the level of housing," Duncan explained.
Looking to the future state of housing, experts agreed that immigration will play a significant role in the housing recovery.
Data taken from 2012 and estimated through 2050 shows that the economy will have 15 million less workers if the immigration rate continues, meaning less people in the housing market and less people paying into their entitlements, Duncan noted.
Another group of Americans that will affect the future of housing is the baby boomer generation, which is the fastest growing age group.
Many have a desire to remain in a home, but want to be mobile. As a result, homebuilders are trying to find new ways to accommodate these needs as well as attract first-time homebuyers to market.
Conine Residential Group president Kent Conine explained that homebuilders are introducing new innovations and productions into the marketplace.
For instance, Conine is in the process of developing a system in which seniors sell their current homes and downgrade to plain vanilla property, which will allow them to travel, while still maintaining a home.
On the reverse side, many homebuilders are going back into the inner cities to tear renovate properties in the hopes of enticing first-time homebuyers into the market.
"While it’s far from where it needs to be, housing is improving," stated Realogy Holdings Corp. chairman and chief executive officer Richard Smith.
He concluded, "If given a little nudge from regulators and Congress to put in some definitive rules, housing has only one way to go, up."



*courtesy of Housing Wire

NEW FORECLOSURE PROGRAM FOR OREGON

A new state program to prevent home foreclosures launches today in 33 Oregon counties.

The Home Rescue Program will provide a year’s worth of mortgage payments, up to a total of $20,000, and up to $10,000 in back payments to bring mortgages current.

The Eugene Register Guard reports that the program aims to provide help to about 25-hundred homeowners.

The Oregon Housing and Community Services agency started accepting applications online today at noon.

To qualify, applicants must be able to show that their income is at least 10 percent lower than it was in 2011 or 2012, and meet other eligibility requirements.

But you do not have to be behind on your mortgage payments to qualify.

Only 100 homeowners will be accepted in the first round, because it will take time to process the applications.

Multnomah, Clackamas and Washington Counties will be added to the program later.

 

 

*courtesy of OPB

5 THINGS TO KNOW ABOUT RISING INTEREST RATES

1. No more record rates, but still cheap loans
If the economy continues to improve as anticipated, rates will keep inching up. Freddie Mac expects the 30-year to reach 4.7% by the end of 2014. IHS Global Insight forecasts that rates won't hit 6% until 2017.
2. The refi window is starting to close
The rate bump is already cooling off refis, but most homeowners with the equity and stellar credit to refinance have already done so.
If you didn't have enough equity to qualify, check again -- rising prices pushed 850,000 homes into the black in the first quarter, according to CoreLogic. Plus, the recovery may lead lenders to loosen up.
The average credit score for an approved mortgage has been 761, says the National Association of Realtors, up from the normal 720.
3. Higher rates won't scuttle the housing recovery
At worst, this turnaround will only dampen the pace of growth, says IHS U.S. economist Patrick Newport. A healthier economy is what's boosting prices. Rates would have to rise sharply to make a mark. "Going up three percentage points would be a major wet blanket," says Bob Walters, chief economist of Quicken Loans.
Related: Mortgage rate rise will not push up home prices
With prices rising, sellers can be patient. For buyers, mortgages are still historically cheap.
4. Once you're ready to buy, lock in
To avoid any short-term spikes, Washington, D.C., mortgage banker Frank Donnelly recommends locking in as soon as you can (typically when you sign a contract).
Most lenders won't charge for a 45-or 60-day rate lock. Pay for a 90- or 120-day lock only if deals close slowly where you live (ask your lender); the typical cost is a quarter of a point per 30 days. With a float-down option, you'll pay less when rates fall at least a quarter point. Skip that add-on unless it's free.
5. Fixed loans usually beat adjustables
You may be eyeing adjustables, which are up less than fixed loans. An ARM is the better call only if you plan to own your home for a short time.
Related: What will your mortgage payment be?
"When you need five or six years, you might save with an adjustable," says Keith Gumbinger of the research firm HSH.com.
A monthly payment on a $250,000 mortgage is $1,194 with a 30-year loan at 4%, or $999 on a five-year ARM at 2.6%. But it's crucial to get a loan that matches your time frame.


* courtesy of CNN Money

NO FEAR OF ANOTHER HOUSING BUBBLE IN PORTLAND

Recent rapid climbs in home prices don't add up to a new housing bubble, the real estate data firm CoreLogic said in a report released Tuesday (pdf). 

Although home prices rose 12.2 percent in May compared with a year earlier -- 15.5 percent in Oregon -- CoreLogic said overall housing affordability remains near record highs and that rising interest rates will slow further home-price increases.

"Because mortgage rates are, by historic standards, still low, housing remains highly affordable, even with the recent increase in prices," the report said.

Bubbles are most often spotted in hindsight, CoreLogic acknowledged. But it added that "there is a long way to go before housing again becomes unaffordable." To return to affordability levels seen between 2000 and 2004, prices would have to rise 47 percent or interest rates would have to rise to 6.75 percent, the firm said.

The affordability analysis was conducted when interest rates were near an average of 3.5 percent nationally. Rates have since risen above 4.51 percent for a 30-year fixed loan, according to Freddie Mac. In the Portland area, prices and sales slipped slightly in June, perhaps reflecting a reaction to the first hint of rising rates.

 

 

 

*courtesy of The Oregonian