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Saturday, March 30, 2013

Very First Step to Buying a Home


At some point, our exhaustion with paying rent turns into a desire to own property. 
So we need to know the very first step to take to buying a home. I talk to people all the time who have a wistful cast to their voice when they mention buying a home. It seems to them to be part of the distant future, a future where they have somehow increased their income, gotten a handle on their living expenses, and, sometimes: started acting like a grownup. Owning a home becomes a dream in the fantasy sense: maybe someday...

The very first step toward buying a home is to personally establish a pattern that is a good investment for a mortgage lender. 
If they are going to lend you tens of thousands of dollars to buy your home, they need to know that you can be counted on to pay if back.

Establish a solid, two year history of taxable employment.  
Ideally, you work for two years with one employer, but a lender can also work with someone who has two years with two employers, but in the same line of work. (So if you start in Winnebago sales and move to Harley Sales, that would be good. If you switch from wig sales to Bikram yoga teaching, that would be not so good, in establishing a consistent two year pattern.)


Friday, March 29, 2013

Making the Leap from Renting to Home Owning in Portland

At some point, we get tired of paying rent. 
(Honestly, this is most of the time.) Don't even dare to add up all the money you've spent over the last year paying for the right to call a place your own, but not to truly experience as your own. It's where you keep your stuff. It's where you park your shoes. Add up what you've paid in rent over the past year, and it will shock you: realizing you won't ever see that money again--it's as if you paid for a year-round hotel with no vacation.
Sometimes renting doesn't make sense
Rent payments pay off a stranger's mortgage and build equity in somebody else's property profile. You went to work and worked hard every day and Memory is your sole witness.

You start to long for the freedom and autonomy you would have over your own property: if it was yours, you could change out the cabinets, paint the wall yellow, switch the cheap beige carpeting to warm cork. If it was yours, you would have chosen differently: you would have chosen a garden out the back and a place without popcorn ceilings. Renting can feel like settling for second best--every single day.

It's not only personally limiting to rent, but also it's spiritually exhausting to keep paying for something that has no long term value to you. It becomes demoralizing to pay a significant amount every month for a place which you can neither cultivate and alter to reflect your expression, nor call YOURS. MINE. This is MINE. I OWN IT.
A child's iconic vision of Home

It takes a leap of courage to take on the attitude of one who can care for property: Because it is a metaphoric commitment to caring for yourself. Showing up every day and taking care of your own self is akin to taking care of your home. Every child goes through a phase of drawing houses: the box; the tree next to it, the windows and the door, and the family standing outside--because Home is archetypal, the home is the primary metaphor for ourselves and our place in the world.

Taking care of a home takes perseverance, commitment, planning, focus, and execution. If that sounds like work, it is. It can be the greatest leap we make, from "going with the flow" to showing up everyday, with an attitude and habits that cultivate our place in the world...our investment in ourselves.

There is no other investment as rooted in something real, like Real Estate. It is real ownership of a tangible thing: your home. And when you live in it, wake up there, play and relax there, laugh with friends and family there, be alone and quiet there, surround yourself with your chosen objects there--AND you OWN it, your investment is a Living thing. Your investment is Where You Live.
Illustrator Roger DuVoisin's image of Home

In exchange for the commitment, you receive a couple of things back. Sure, you get tax advantages: you can claim the interest you paid on your mortgage off on your taxes. (You don't get to claim anything for the rent you've paid--no tax benefit there.) Primarily, you have a real piece of property that you can pay off, month by month, year by year, and live in and on.

You decide what to do with it. Pass on to someone else. Sell it in years to come, use the proceeds to buy a smaller home, and keep the rest of your profit. Move elsewhere and rent it out and receive that check every month. (Now the experience as renter flips to the experience of landlord. How different the view seems from here!) After you have paid for your home for a while, you earn the ability to decide what to do with it. It expands your options. It advantages you.

It's no accident that home ownership is the centerpiece of our cultural Dream, which balances stability and freedom, responsibility and self-autonomy. You prove your commitment to your self, in taking on homeownership. You prove your own worthiness: you are worth investing in. Your home is your self. Imagine you can take care of a home with the same love and attention that you take care of yourself. If you don't take care of yourself, START THERE.

Remember: How you do one thing is how you do all things. 
If you would like to shift from renting your life to owning your life, I'd love to help.


Monday, March 11, 2013

Help for Homeowners

Oregonhomeownersupport.gov

A government resource for foreclosure prevention. For homeowners falling behind in payments and/or at risk of losing their homes: visit the link, follow the contact information to get a hold of a local counselor (dialing 211 for help.)

Monday, March 4, 2013

How to get a Super Low Interest Rate without Moving

Take advantage of recent low interest rates (before they climb up again) by refinancing your FHA loan. Ask your lender (or mine!) about an FHA streamline refinance.

If you bought when interest rates were higher -- and many people have, since interest rates at the moment have not been so low since 50 years ago as they are today -- you may be keen to refinance and free up your monthly income. This refinance simply results in a lower interest rate.

Here are the details:

-- you don't need an appraisal
-- you don't need to verify income
-- you will pay a couple of hundred dollars for the service
-- you can't refinance a 30-year term into a 15-year term, you must trade apples for apples

Here are the basics:

-- your mortgage must already be FHA-insured
-- you, the borrower, must be current on payments
-- the refinance must result in a lowering of your monthly payments  and/or a conversion of an adjustable rate mortgage to a fixed-rate mortgage
-- not possible to do a cash-out refinance

Make sure to go with a lender who, first of all, doesn't play possum when you mention an FHA streamline refinance. Sometimes you may even find a lower interest rate when you refinance with a non-FHA (conventional) loan, instead.

No matter what kind of loan you get, always go with a lender who is willing to do the work for you, and who will exactly to the penny explain how, and to what extent, a refinance will advantage you: know all the details about the interest rate, costs to refinance, length of the term of the new loan, and whether it has a fixed or variable rate.

Saturday, March 2, 2013

Tiny House Love in Oregon and Local Portland Consultants

Imagine a city where some people live in small dwellings with minimal belongings, making a minimal impact on the earth and resources. They share their tools, share their garden spaces, share their community buildings, mix and mingle in the greater world, but still have their own space. The tiny home is a refuge from the whole wide world, and yet there are numerous places out in the world to make connection. On a small slice of land, you can still live an entire lifestyle of privacy and contentment.

If that's not your scene, then imagine a small space, a tiny place near your own home: a cottage, a dwelling, a secluded room all your own...a separate couple of rooms, or a small unit where your family comes to visit, or a friend stays for a time. You go there to write, make your art, visit with clients, have a cup of tea and read a book. It is your own private place. It's small and you needn't take a lot of time cleaning it or filling it. A haven. A refuge, a place in between.

PAD: Portland Alternative Dwellings
runs workshops about all the issues you need to know about creating such a space...

Tiny House Blog: Living Simply in Small Spaces
discusses recent developments, shows what is being done and what is possible in small homes today...

(You may hear of a Tiny House being called an "ADU." In real estate and housing code parlance, an ADU is an accessory dwelling unit, a granny flat, a mother-in-law apartment, et cetera.

In order for it not to be classified as a duplex, it must have a separate meter box from an existing structure's meter box. An ADU can be physically inseparable from the existing dwelling, and be in its basement or attic, but its utilities must be separately measurable. An ADU built on a parcel of land can even be larger than the existing house that occupies it.)










Friday, March 1, 2013

How FHA Loan Terms Change this Spring

Changes to FHA loans this spring and summer will make their terms more expensive, so time is of the essence to apply soon to keep your payments low.

Starting this June, FHA loans will require mortgage insurance to be held for the entire life of the loan, so if you're interested in getting an FHA loan at a lower cost to you, act now to start the process!

With an FHA insured loan, you (the buyer) pay 3.5% down, as opposed to the traditional 20% down on the cost of a house. In exchange for this low down payment, you must pay mortgage insurance. This monthly payment usually phases out when a buyer reaches a secure level of equity in the house. But all that will change June 3rd of 2013.

Instead, for loans begun with less than 10% down payment, the mortgage insurance premium will be required to be paid during the entire life of the loan, becoming a permanent part of the loan. 

There is still time to get an FHA mortgage (where the insurance premium gets phased out) before the June 3 rule change, by applying for an FHA loan and having the lender assign a case number for your loan before the deadline. But: in order to get a case number, which is assigned to a particular property, you must have an accepted offer on that property.

The closing date in this case is irrelevant, but the issuance of the case number is decisive.

In addition, the annual mortgage premium on new FHA loans (those with case numbers issued after April 1, 2013) will rise from 1.25% per year to 1.35% per year. 

How this all washes out is: the can't-get-out-of-paying-it mortgage insurance on an FHA will more than double over the whole term of a thirty year loan...if you apply (and don't have an accepted offer on a house) after June 1st, 2013. 

(But remember, a 10% or more down payment means you don't have to pay mortgage insurance at all...)

If you're interested in starting the process and finding a home, get in touch with me and I will set you up with a terrific lender who can pre-qualify you.