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Home Loan Options

It can be hard to determine what kind of loan works best for you when it comes to choosing a mortgage. It’s hard to break down the benefits and cons of each, so we’re here to explain what each loan is, and how it could possibly affect you. If you’re interested in applying for a home loan, talk to your Bend Realtors and see which lenders they recommend.

Fixed and Adjustable

There are two types of mortgages that you can come by, a fixed rate or adjustable rate. When you have a fixed rate mortgage, your loans have a fixed rate of interest, meaning they have the same rate of interest from the time you get them until when you pay them off. An adjustable mortgage has a rate that adjusts with the market, it might go up or go down as the market changes.

Each kind of loan has benefits and problems, but it’s up to you to decide what you’re willing to commit to. With a fixed rate you know your rate won’t change, even if the market changes. This means that if the rates drop lower than yours, you’re still stuck paying the rate you locked into. The flip side to this is that if you have an adjustable rate and the market rates soar, you’re stuck paying higher prices. Talk to a local lender and discuss which would work best for you.

Government and Conventional Loans

A conventional home loan is one that isn’t issued by the government in any way. Most consider conventional home loans to be regular home loans. A government issued home loan is one that is guaranteed through the government. Here are the different types:

FHA

An FHA Loan is part of a mortgage insurance program. These types of loans are available to first time homebuyers and other home buyers. With this loan the government is insuring the lender against any losses they might have from borrowing money. FHA loans are managed by the Department of Housing and Urban Development. With this loan you can put a lower payment down, as low as 3.5%. With this also comes mortgage insurance, that might make your monthly mortgage payment higher.

VA

If you’ve ever been a military service member or are a family member of one, you qualify for a VA loan program.  This mortgage is guaranteed by the VA. The benefit of this kind of loan is that veterans and their families can get 100% financing when they buy their home which means they have no down payment at all.

USDA or RHS Loans

Managed through the Rural Housing Service, part of the Department of Agriculture, this is for more rural residents. If you have a steady, but low or modest income, and other financing isn’t available to you, a USDA loan might be a good option. It takes into consideration the adjusted median income of the rural area, and bases the loan off of that.

Buying a Home

There are a lot of different steps to take when it comes to buying a home. Picking the right kind of loan is one of them. This can be the biggest part of purchasing a house, other than finding a property that is perfect for you. Talk to your Bend Oregon Realtors today, & see which lenders they recommend. Meet with a lender and find out which mortgage or home loan is right for you.

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Examples of Mortgages You Can Get

Different Types of Mortgages

If you’re looking at becoming a first-time home owner, you may need to brush up on your mortgage knowledge. Talk to your real estate broker and see if they can recommend a lender for you to talk to about your mortgage options. Getting pre-approved when you’re house hunting can be a great advantage to getting the home that you want. If you’re pre-approved you already know what sort of financial situation you are in, and what sort of mortgage you can afford. Check out the following list and learn about different types of mortgages available. Then, talk to a lender to see which mortgage option works best for you.

Fixed-Rate Mortgage

A fixed rate mortgage means that the interest rate for the loan, is locked in at the beginning of the mortgage agreement. Fixed rate mortgages can come in terms of 10-15-30 years. The most common of mortgages is a fixed rate 30 year mortgage. This provides the owner with the lowest mortgage payment per month, as it divides the loan into 30 years of payments, with a fixed rate of interest.

Fixed rate mortgages are also popular because they are the most predictable; the owner knows what their payment will be month to month for the entire timeline of their term in years.

Adjustable Rate Mortgages

There are many different types of adjustable rate mortgages(ARM), but the essential idea is that the interest rate can change over time.  If a home buyer gets a one year ARM, the interest rates on their loan change to the current market rate, once a year on the anniversary of their loan. This can be risky as you could wind up paying different amounts of mortgage payments from year to year. They payment amount may go down, but it also may go up.

10/1 ARM’s also change in interest as time goes on. This features a fixed interest rate for the first 10 years, but then is subject to change every year to the current market interest. This loan is typically for 30 years, and is typically used by homeowners who intend to pay their home off before the initial 10 years have passed.

Balloon Mortgages

Balloon mortgages feature a much shorter term and a fixed rate of interest, much like a fixed rate mortgage. The difference is that balloon mortgages feature a larger or balloon payment at the end of the loan. The monthly payments are lower and typically go to interest being accrued. Balloon mortgages are great for responsible borrowers, and typically are for people who intent to sell the house before the balloon payment is due. These mortgages can get tricky, as you’ll be required to re-finance if you can’t afford the balloon payment when it’s due.

Check out the different types of mortgages and see what you can afford, and how long a payment schedule you want to commit to. Talk to a lender to see what your options are and what makes the most sense for you. We also suggest checking out our monthly Trend Report to learn more about the local market trends.

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There’s no time like the Present to apply for a Mortgage

Buying a home can seem intimidating, and applying for a mortgage can be equally as scary. Most people aren’t applying for mortgages in the current real estate market because they assume that they won’t qualify. The fact of the matter is, this might not be true, and you won’t know until you apply. If you think you might be ready to make the jump into the real estate market, then it’s time to get your ducks in a row.

What you need

To apply for a mortgage, you’ll need to have saved a down payment, have a steady and stable income and also have a good credit history. Don’t let the down payment scare you, with different types of mortgages and home loans, you can save as little as 3 percent or as high as 20 percent. A lender can help with this amount.

Here’s a list of what you’ll need to apply:

  1. Current credit history and score – Don’t let non-perfect credit deter you from applying for a loan. You may already qualify so it’s time to find out.
  2. Gather your documentation – Get together your income verification, like W-2 forms or tax returns. You’ll also need your credit history, and any other assets you have, like bank statements from saving accounts.

Talk to your Bend Realtor.

Bend Realtors have great recommendations when it comes to finding a loan officer. Typically, they have loan officers that they continue to work with time and time again. Ask your realtor for the lender that the recommend highly.

Trust your Lender.

Lenders will help you determine what price of home you can afford. They’re there to help you review your income, monthly expenses and other financial goals you may have. They’ll help you make the best decision when it comes time to choose a mortgage, and how you qualify.

Get Pre-Approved.

If your lender thinks you’re ready to apply for a mortgage, and start your house search, getting pre-approved can make this process even easier. If you’re pre-approved, you know exactly how much house you can take on. It prevents you from putting an offer on a house, that you will later find out you can’t afford. It also shows potential home sellers that you’re serious about buying.

If you’re thinking that you won’t qualify but think you might have what it takes, there’s no harm in meeting with a Bend Oregon Real Estate Agent and Lender. They might help you get things on track to purchase a home in the coming years, or they might help you discover that you’re already ready.

Most people assume that they can’t afford homes in today’s market. Yes, the market seems to be at a high, but there are pros and cons to the current market, and some of them might work in your favor. Instead of assuming that you can’t afford a home now, talk to your  Real, and see what they recommend. You’ll never know if you don’t try.

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Types of Home Loans

It can be hard to determine what kind of loan works best for you when it comes to choosing a mortgage. It’s hard to break down the benefits and cons of each, so we’re here to break down what each loan is, and how it could possibly affect you. If you’re interested in applying for a home loan, talk to your Bend Realtors and see which lenders they recommend.

Fixed and Adjustable

There are two types of mortgages that you can come by, a fixed rate or adjustable rate. When you have a fixed rate mortgage, your loans have a fixed rate of interest, meaning they have the same rate of interest from the time you get them until when you pay them off. An adjustable mortgage has a rate that adjusts with the market, it might go up or go down as the market changes.

Each kind of loan has benefits and problems, but it’s up to you to decide what you’re willing to commit to. With a fixed rate you know your rate won’t change, even if the market changes. This means that if the rates drop lower than yours, you’re still stuck paying the rate you locked into. The flip side to this is that if you have an adjustable rate and the market rates soar, you’re stuck paying higher prices. Talk to a local lender and discuss which would work best for you.

Government and Conventional Loans

A conventional home loan is one that isn’t issued by the government in any way. Most consider conventional home loans to be regular home loans. A government issued home loan is one that is guaranteed through the government. Here are the different types:

FHA

An FHA Loan is part of a mortgage insurance program. These types of loans are available to first time homebuyers and other home buyers. With this loan the government is insuring the lender against any losses they might have from borrowing money. FHA loans are managed by the Department of Housing and Urban Development. With this loan you can put a lower payment down, as low as 3.5%. With this also comes mortgage insurance, that might make your monthly mortgage payment higher.

VA

If you’ve ever been a military service member or are a family member of one, you qualify for a VA loan program.  This mortgage is guaranteed by the VA. The benefit of this kind of loan is that veterans and their families can get 100% financing when they buy their home which means they have no down payment at all.

USDA or RHS Loans

Managed through the Rural Housing Service, part of the Department of Agriculture, this is for more rural residents. If you have a steady, but low or modest income, and other financing isn’t available to you, a USDA loan might be a good option. It takes into consideration the adjusted median income of the rural area, and bases the loan off of that.

Buying a Home

There are a lot of different steps to take when it comes to buying a home, and picking the right kind of loan is one of them. This can be the biggest part of purchasing a house, other than finding a property that is perfect for you. Talk to your Bend Oregon Realtors today, and see which lenders they recommend. Meet with a lender and find out which mortgage or home loan is right for you.

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The difference between traditional sales, short sales and foreclosures

Buying a house comes with many steps, terms and paperwork. Understanding exactly what you’re looking for can be hard. Finding the best Bend realtors to help you find the best house is key, and understanding the market is even better. If you’ve ever wondered what the difference between short sales, foreclosures or just regular sales are, we’re here to explain.

Short Sale

A short sale happens when a home owner decides to sell their home, but they still owe more on the mortgage than what they can sell the home for. Typically, sellers negotiate with banks and work out a deal to sell the home for less than what they owe, so they can pay the bank back. The important thing to note in this situation is that the seller is still in control of selling their home.

In some situations this can make buying a short sale difficult. In some cases there may be a second loan on a the property, and it can be harder to get that party to agree on the sale terms. Typically, they stand to lose the most money in this arrangement. Sometimes the process of purchasing a short sale can take longer than usual because of the multiple parties involved.

Foreclosure

Foreclosure happens when homeowners have trouble making their loan payments. It can happen if the homeowners get extremely behind, and are considered “underwater.”

The process starts when the bank notifies the homeowners that they have started the process of filing with local courts to take over ownership of the home, known as foreclosure proceedings. Sometimes this process can take as little as three weeks, or over a year, but it’s important to note that during proceedings the bank does not own the home.

Once the foreclosure is filed with the courts, the home is in ownership limbo. Sometimes occupants stay and sometimes they are required to leave. Foreclosure properties are auctioned off, sometimes at the courthouse and sometimes at the physical property.

Take Away

Traditional sales are much simpler, as there’s only one party involved. Traditional sales also tend to take less time to close, providing the buyer is pre-approved for a loan, and ready with a down payment. You can find some great properties in either short sales or foreclosures, and some you may find underpriced, in an otherwise competitively priced market.