It’s About to Become Easier to Qualify for a Mortgage – Here’s Why

| Jun 20, 2017
 

We’re living in expensive times—when a bottle of fresh juice can run you $5, rents and home prices are soaring, and the bills never seem to stop piling up. But aspiring homeowners might soon get a break as it becomes a little easier for those with student, credit card, and car loan debt to qualify for a mortgage.

Fannie Mae plans to increase its allowable debt-to-income ratio from 45% to 50% on July 29. This means that more borrowers on the cusp of getting a loan (e.g., millennial, first-time, and lower- to moderate-income borrowers carrying more debt) could potentially qualify for a mortgage backed by Fannie.

The debt-to-income ratio is calculated by taking a potential borrower’s monthly gross income and dividing it by the borrower’s recurring debts such as monthly car payments. Lenders use this ratio to figure out if borrowers can afford to make their mortgage payments each month.

“They’re trying to make more loans available,” says mortgage loan originator Don Frommeyer of Marine Bank, in Indianapolis. “When interest rates go up, the debt ratios go up. And that limits the number of people who can buy a house.”

Fannie, which purchases and guarantees mortgages, was already granting ratios of up to 50% with certain conditions—such as if the borrowers had deeper cash reserves, underwent financial counseling, or had higher incomes. The change opens the door to borrowers with more debt who can’t meet those conditions.

Your bank might have its own debt-to-income ratios

However, not everyone will be benefit from the change. Fannie Mae insures mortgages, but it’s still banks, credit unions, and other financial entities that make the loans—and those lenders have their own criteria.

But the increased debt allowance could encourage more lenders to make changes to their debt-to-income ratios. And that could help more buyers on the brink.

“The best thing the consumer can do is ask the lender if they underwrite to Fannie Mae guidelines,” says longtime mortgage broker Jeff Lazerson, based in Laguna Niguel, CA. If they don’t, “you [might] just have to find another lender. Or maybe you push back on that lender” to see if it’ll raise the limits.

Lower debt-to-income ratios won’t help everyone

A higher debt ratio isn’t a silver bullet for loan seekers, though.

“Mortgage borrowers need to keep in mind, it’s the person’s whole application that will determine whether or not they get approved,” says Eric Tyson, co-author of “Mortgages for Dummies.”

“If you don’t have a good credit score, if you don’t have a sufficiently large down payment, it won’t change the outcome of your application.”

Buyers who can’t qualify, even with the higher ratios, should consider other alternatives.

“Most people are looking to buy at the high end of their budget. They want to qualify for as much house as they can get, partly because homes are so expensive to begin with,” says Lazerson, who is also a mortgage columnist.

“They could look for a smaller-sized property [with a] lower sales price. They could find a co-signer, someone who they trust, usually a family member or a close friend,” Lazerson says. “Or [they could] come up with more down payment money.”

Posted on July 17, 2017 at 8:11 pm
MJ Steen | Category: Uncategorized | Tagged , , , , , , , , , , , ,

Mid-Century Inspiration

My listing on SW Greenleaf Court was built in 1981 but was inspired by the styles seen so often in mid-century architecture. By incorporating some of the colors, furniture, light fixtures and details from that time, this property would feel fresh yet stay true to its inspiration. For more information on my listing, click here. 

Posted on July 14, 2017 at 8:54 am
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6 Surprising Reasons to Go to an Open House – Even If You’re Not Buying

Perusing online real estate listings can be nothing less than addictive. We’ve all spent time scouring the internet, ogling homes for sale that we don’t intend—or can’t afford—to buy. Because it’s fun!

But would you ever hop in the car and go look at a house in person, even if you’re not at all ready to make an offer?

Before you dismiss the idea, consider what you stand to gain by turning house hunting into an extracurricular activity.
Just ask Kristin McGrath. She and her husband visited all sorts of open houses in Austin, TX, while they got their finances in order to buy. They wanted to hit the ground running in the competitive real estate market.

“After weeks of checking out other homes, when we started looking for real, we could visit houses and jump in with an offer without a ton of deliberation,” she says.

Sure, it might seem nosy at first—and we’re certainly not encouraging you to be a straight-up looky-loo. But regardless of whether buying or selling is in your near or distant future, there are many benefits to going to an open house.

Like what? We’re glad you asked! Here are six solid reasons to hit up an open house next weekend.

Reason No. 1: Learn more about what you can afford

What you want to buy and what you can afford to buy are often two very different things.

Unfortunately, you don’t always figure that out until you’re deep in the process of house hunting, perhaps with your heart set on a dream home that will drain your finances and make you house-poor.

“Many first-time home buyers ask me to find them something that doesn’t exist,” says Melissa Colabella, licensed real estate salesperson with Julia B. Fee Sotheby’s International Realty, in Irvington, NY. “They are often shocked to learn that single-family homes do not even exist in their price range in their preferred neighborhoods.”

Attending open houses lets you get a grip on what you can realistically expect to find in your budget. Sure, you can enter a price range online on realtor.com®—but remember that perusing online listings is only the first step of the process. Often, actual homes look quite different from their online photos, which can be focused on or touched up to show only the best parts of the property.

Reason No. 2: See the agent in action

Even if you don’t find your dream home, you might meet your dream agent. What better way to interview the candidates who could represent you on either side of the transaction than by seeing them in action, points out Realtor® Patrick Madigan, owner of Madigan Realty, in Raleigh, NC.

While most sellers interview multiple agents to find the best fit, he finds buyers rarely do—which can be a mistake.

“Open houses present a great opportunity to get multiple face-to-face appointments with potential agents, without having to set up a formal appointment to interview them,” he says.

Be alert to whether the agent engages you when you first come in or is too busy to acknowledge and help you. And come armed with a few insightful questions about the local market to see if the agent seems knowledgeable about more than just that one open house, Madigan suggests.

Reason No. 3: Check out the competition

Traffic at an open house can be a gauge for whether the sellers have found a sweet spot with their price, since a new listing should be attracting multiple visitors when priced correctly.

If you’re a buyer, the number of visitors can indicate how quickly you might need to pounce when you decide you’re ready. (And it can tell you how to price your own home to move fast if you’re selling.)

“Some markets will allow for you to have a few days to mull over your decision, but an open house with 34 visitors can indicate your offer needs to be submitted right away,” Colabella says.

You’ll also get a face-to-face look at your competition. If you listen carefully, you might pick up some intel about the kind of buyer the seller is looking for. Even if you don’t intend to buy this house, the info might come in handy down the road.

Reason No. 4: Get a feel for the neighborhood

If you’re looking in a new, largely unfamiliar community, browsing for a few months can tell you a lot about your potential neighbors. You’ll get a sense for who primarily lives there (e.g., families, retirees, or singles), whether the neighborhood is abuzz with block parties and other events, or if it’s mostly quiet. Plus, you’ll get the chance to meet other prospective buyers, and learn where they’re relocating from and what they’re looking for in their new community.

“Of course buyers come in every demographic, but sometimes the patterns are surprising,” Colabella says.

Reason No. 5: Learn more about your needs

“As first-time homeowners, we weren’t sure yet what we were looking for exactly beyond the number of bedrooms and bathrooms,” McGrath says. “The open houses helped us learn more about layouts and amenities we liked.”

In fact, you might be surprised by what you gravitate toward when you really look around, Colabella notes.

“Often buyers think they want charming, older homes but then decide newer construction better fits their needs,” she says. “Or they start with houses and then switch to townhomes or condos after losing sleep over the concept of homeownership maintenance.”

Reason No. 6: Do some design recon

Wouldn’t you love to have someone give that designer touch to your house? Many homes for sale have been professionally staged or recently fixed up, so an open house can give you insight into the latest design trends. And since they’re often done on a budget, it can get those creative juices flowing for how you could incorporate wallet-friendly tricks to spruce up your space (like opening up your space with strategically placed mirrors).

And, if you’re preparing to sell your house, you can use open houses to pick up some staging tips of your own. Notice what you pay attention to and how little touches—such as fresh towels and empty closets—can make a big difference.

Posted on July 12, 2017 at 6:15 pm
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2970 NW Circle A Drive | High-End Remodel

Olson & Jones Construction redid my fabulous Hartung Farms estate and took it from dated to high-end. For more information on this 1.55 acre listing>>> click here.

Posted on July 7, 2017 at 7:48 am
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What are Portland’s best new spots to drink beer?

Posted on June 23, 2017 at 8:49 am
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2970 NW Circle A Drive | $2,295,000

Posted on June 7, 2017 at 12:18 am
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New Tile Trend: Black Tile with Black Grout

By Nancy Mitchell – Apartment Therapy

You may think of tile as a dull subject, but that’s where you’d be wrong. There’s always something new in the tile world, some new shape or texture or color or configuration. Lately, I am very into the look of matte black tile paired with black grout. It’s sophisticated, it’s modern, it doesn’t show dirt — a win all around. For more examples of this surprising trend, visit this link. 

 

Posted on May 26, 2017 at 6:58 am
MJ Steen | Category: Uncategorized | Tagged , , , , , , , , ,

Home Prices Are Soaring – Here are the 20 Places Where Owners are Reaping the Biggest Profits in 2017

If you’re looking to buy or sell a home this year, you probably know the housing market is booming in virtually every corner of the country.

In fact, homeowners who sold in the first quarter of the year realized an average price gain of $44,000 since purchasing their home, a new ATTOM Data Solutions report shows. That equals an average 24% return on purchase price across the country — the highest average price gain for home sellers in nearly 10 years.

“The first quarter of 2017 was the most profitable time to be a home seller in nearly a decade, and yet homeowners are continuing to stay put in their homes longer before selling,” said Daren Blomquist, senior vice president with ATTOM Data Solutions.

The report showed homeowners are staying in their homes just shy of eight years on average. “This counter-intuitive combination is in part the result of the low inventory of move-up homes available for current homeowners, while also perpetuating the scarcity of starter homes available for first-time homebuyers,” Blomquist added.

Of course, there are still some laggards. Baton Rouge, Louisiana, for example, saw average home prices decline by $15,000 from their previous purchase price. The same is true for Huntsville, Alabama, where average home prices declined by $8,100.

Of the 20 metro areas with the highest percent return on the previous purchase price, 10 were located in California and three were in Colorado. Competition among homebuyers, especially in these areas, is fierce, so it’s particularly important to have your finances locked and loaded before you start your search.

Regardless of where you’re looking, getting pre-approved for a mortgage is key. You’ll also want to be sure your credit is in good shape so you’ll get the best mortgage terms available. You can check your credit scores for free on Credit.com.

These are the top 20 metro areas where home sellers are making the most money when selling their homes.

19. TIE: Port St. Lucie, Florida

19. TIE: Port St. Lucie, Florida

Average return on investment: 39%

Average price gain: $53,000

19. TIE: Austin-Round Rock, Texas

19. TIE: Austin-Round Rock, Texas

Average return on investment: 39%

Average price gain: $81,795

16. TIE: San Diego-Carlsbad, California

16. TIE: San Diego-Carlsbad, California

Average return on investment: 41%

Average price gain: $144,000

16. TIE: Riverside-San Bernardino-Ontario, California

16. TIE: Riverside-San Bernardino-Ontario, California

Average return on investment: 41%

Average price gain: $90,000

16. TIE: Boston-Cambridge-Newton, Massachusetts-New Hampshire

16. TIE: Boston-Cambridge-Newton, Massachusetts-New Hampshire

Average return on investment: 41%

Average price gain: $111,100

13. TIE: Oxnard-Thousand Oaks-Ventura, California

13. TIE: Oxnard-Thousand Oaks-Ventura, California

Average return on investment: 43%

Average price gain: $160,000

13. TIE: Sacramento-Roseville-Arden-Arcade, California

13. TIE: Sacramento-Roseville-Arden-Arcade, California

Average return on investment: 43%

Average price gain: $99,000

13. TIE: Fort Collins, Colorado

13. TIE: Fort Collins, Colorado

Average return on investment: 43%

Average price gain: $97,500

12. Greeley, Colorado

12. Greeley, Colorado

Average return on investment: 44%

Average price gain: $85,050

10. TIE: Urban Honolulu, Hawaii

10. TIE: Urban Honolulu, Hawaii

Average return on investment: 46%

Average price gain: $161,110

10. TIE: Salem, Oregon

10. TIE: Salem, Oregon

Average return on investment: 46%

Average price gain: $70,800

9. Vallejo-Fairfield, California

9. Vallejo-Fairfield, California

Average return on investment: 47%

Average price gain: $115,000

7. TIE: Denver-Aurora-Lakewood, Colorado

7. TIE: Denver-Aurora-Lakewood, Colorado

Average return on investment: 50%

Average price gain: $110,000

7. TIE: Los Angeles-Long Beach-Anaheim, California

7. TIE: Los Angeles-Long Beach-Anaheim, California

Average return on investment: 50%

Average price gain: $187,000

5. TIE: Stockton-Lodi, California

5. TIE: Stockton-Lodi, California

Average return on investment: 51%

Average price gain: $101,000

5. TIE: Modesto, California

5. TIE: Modesto, California


Average return on investment: 51%

Average price gain: $87,500

4. Portland-Vancouver-Hillsboro, Oregon-Washington

4. Portland-Vancouver-Hillsboro, Oregon-Washington

Average return on investment: 52%

Average price gain: $110,799

3. Seattle-Tacoma-Bellevue, Washington

3. Seattle-Tacoma-Bellevue, Washington

Average return on investment: 56%

Average price gain: $139,325

2. San Francisco-Oakland-Hayward, California

2. San Francisco-Oakland-Hayward, California

Average return on investment: 65%

Average price gain: $276,750

1. San Jose-Sunnyvale-Santa Clara, California

1. San Jose-Sunnyvale-Santa Clara, California

Average return on investment: 71%

Average price gain: $356,000

Posted on May 1, 2017 at 11:55 pm
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22 Treasured Chests | Luxe Magazine

Posted on March 27, 2017 at 8:57 pm
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NYT’S What You Can Get for $1,225,000 | PDX vs. SF

PORTLAND:

Built in 1909 / Redone | 4 Bedrooms | 2.1 Bathrooms | 3,148 Sq. Ft. |

This completely remodeled classic Old Portland residence is located in the heart of Portland Heights. Formal areas, marble bathrooms and eat-in kitchen, high-end finishes, period moldings, hardwoods, wainscoting, family room, master suite. Ipe deck and porch, partial views. Minutes to the city, NW 23rd Ave, trails, park. High tech, walk-ability.

SAN FRANCISCO:

Built in 1907 | 3 Bedrooms | 2 Bathrooms 1,535 Sq. Ft.

Step into this quiet Edwardian home & instantly feel at ease. Soaring ceilings, hardwood floors, double pane windows, & open living space set the mood. The nicely sized front bedroom features built-in window seating. Follow the hallway down to the master bedroom w/ updated en-suite bathroom. The third bedroom is ideal for a home office/nursery. In-unit laundry & 2 hallway closets complete the front of the home. The back of the house has been opened into a great room that hosts the living, dining, & kitchen space. The kitchen has granite countertops, SS appliances, a 5-burner range & space for bar seating.

Posted on March 13, 2017 at 7:29 pm
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