What is the best way to pay your mortgage?
Posted On: March 10th, 2011 by James Posted In: Financial Health • Mortgage Programs • Mortgages
So now you’ve got a mortgage. What is the best way to pay it? Should you make extra payments? What about bi-weekly payment programs? Should you sign up for auto pay directly with your mortgage lender? There are lots of choices to make, and you’ve got to make the one that you can live with. One thing that I recommend to all of my clients is to be sure that they stay consistent with their payment plan. New homeowners can sometimes get into the trap of waiting until the 15th of the month to pay because “that’s when they want it.” Its just a dangerous habit to get into, in my opinion. My advice is to make the full mortgage payment no later than the 5th of the month. I also think that signing up for direct auto pay with the mortgage lender may not be the best approach, either. The way I suggest my clients set their payments up is with a scheduled bill pay “push” from their checking accounts. This is different than the auto pay ACH “pull” from the mortgage lender, and I think it gives you more control over your cash flow. Continue Reading – What is the best way to pay your mortgage?
Potential Jumbo Refinancing Candidates
Posted On: January 28th, 2011 by James Posted In: Financial Health • Mortgage Programs • Mortgage Rates • Mortgages • Portland Real Estate • Refinancing
So, if you pay attention to this blog, you know that interest rates have popped up from their mind-boggling lows in early November. Mortgage Refinances still make a ton of sense for many, but some are waiting for a return to the glory of those heady days… and I believe they will continue to wait for a long long time. However, there are two types of borrowers that I believe will still benefit GREATLY from a refinance:
- Those who tried to refinance and couldn’t qualify due to an appraisal issue.
- Those who currently have a Jumbo mortgage and think that Jumbo rates haven’t improved enough to warrant starting the process. Continue Reading – Potential Jumbo Refinancing Candidates
First Time Home Buyer Programs in Portland, Oregon
Posted On: November 2nd, 2010 by James Posted In: FHA Mortgage • Financial Health • Government Actions • Local Interest • Mortgage Programs • Mortgages • Portland Real Estate
I was recently made aware of an OLD program called the “MCC” (Mortgage Credit Certificate). The MCC Program is a special benefit for the first time home buyers in the Portland, OR market. If you are a first time home buyer (defined by not having owned a home in the previous 3 tax years) AND you qualify for the income threshold* AND are purchasing a home in the city of Portland, OR the MCC program can provide a significant discount to the cost of your mortgage.
*INCOME REQUIREMENTS TO QUALIFY:
- Families of 1-2 must make less than $71,200/year
- Families of 3 or more must make less than $81,880/year
Here is how it works:
Continue Reading – First Time Home Buyer Programs in Portland, Oregon
The Difference Between New & Old FHA Rules
Posted On: September 27th, 2010 by James Posted In: FHA Mortgage • Government Actions • Mortgage Insurance • Mortgage Programs • Refinancing
Just recently for Portland Home Loan, I prepared an analysis for 4 purchase scenarios on the same property. It is a purchase of $300,000 here in Portland, OR, and the 4 options are:
- 5% down conforming
- 10% down conforming, and
- 2 FHA options
One FHA option is the current FHA cost structure, which has been in place since April of 2009. The other option is the new FHA cost structure, which becomes unavoidable after October 4th of 2010. FHA mortgage insurance has always been paid in two places on the loan:
- The monthly premium (which is discounted based on a large upfront lump sum), and
- The Upfront Mortgage insurance Premium (which is 2.25% of the loan amount and automatically added to, and financed into the life of the FHA mortgage.
The major change starting Oct 4th 2010 is a shift of the mortgage insurance cost away from that “financed upfront premium” and more towards the monthly premium.
In short — FHA loans are about to become a little bit more expensive.
I have prepared an interactive FHA loan report that shows the breakdown more clearly.
The new Upfront FHA mortgage insurance premium will be reduced from 2.25% to 1% of the loan amount. However, the monthly mortgage insurance cost will almost double — being increased from 0.55% annually to 0.90% annually. In my example above, this shows up as a jump in payment of $69 per month on the same $300k mortgage.
Ultimately, FHA loans are still going to be amazingly popular, and continue to make a lot of sense for borrowers as we move forward. They still have the smallest available down payment requirement (at 3.5%) as well as the most flexibility around borrower credit history.
But I do think that this change will make a loan with 5% down and private mortgage insurance more attractive to borrowers with top credit scores. Additionally, the FHA streamline refinance will become much less attractive for many borrowers. I am scouring my client list and the wider community for last minute FHA streamline refinances! Last call for the good stuff!
7 Critical Things to Avoid During the Loan Process
Posted On: September 15th, 2010 by James Posted In: FHA Mortgage • Financial Health • Mortgage Programs • Mortgage Rates • Mortgages • Refinancing
Our new credit environment is fast becoming one of extremely rigid guidelines. Your ability to obtain a mortgage is dependent on the financial scenario presented in the loan application. Think of this application as a snapshot of your existing circumstance. If there are any material changes to this picture, it can mean the difference between having a loan approved, and having it declined.
Certain things are verified and then re-verified at different points in the process, and here is a list of common bugaboo’s that uninformed mortgage borrowers can sometimes find themselves in.
