Top 4 Reasons to Buy Now

Courtesy of Kimberly Coleman, branch manager of Prospect Mortgage in Sherwood, OR.

According to a recent survey commissioned by Move Inc., 23% of adults plan to purchase a home in the next five years and 53.5% of them happen to be first-time homebuyers. If you have potential homebuyers who are sitting on the fence thinking about purchasing a house, here are some talking points you can share with them.

Lower property values are making homeownership more attractive than renting in many markets throughout the country. Paying for a mortgage is now less expensive than renting in many large metropolitan areas, including Miami, Las Vegas, Phoenix and Washington, D.C., as well as smaller cities like San Antonio and Fresno, California. In fact, you can learn more about buying real estate in Las Vegas at a website like

Buyers have the upper hand as sellers are cutting prices on nearly one quarter of U.S. homes listed for sale in June 2010 according to the real estate website That’s up 9% from the previous month and represents a total price reduction of about $27 billion.

Lower mortgage rates are the result of the current recession. What does this mean for your clients? On a 30-year fixed-rate loan amount of $200,000 at 5%, the interest paid over the life of the loan is $186,512. That brings the total loan payments to $386,512. At 6%, the amount of interest paid rises to $231,676, a 24% increase. At 7%, it’s $279,018, a 49% increase.

Investment opportunities abound as mortgage rates and home prices have dropped dramatically since March 2008. This has created one of the best buyer affordability conditions with the percentage of median household income needed to pay the mortgage on a median priced home at a 30-year low.

Kimberly Coleman, Branch Manager
Prospect Mortgage
NMLS# 254416
20512 SW Roy Rogers Rd., Suite 130
Sherwood, OR 97140
Office: (503) 305-2344
Cell: (503) 476-7020
Fax: (877) 674-6435

What Your Home Inspection Should Cover

Home inspectors will thoroughly examine the home, but here is a general list of what they look for. Find a licensed, professional home inspector here.

  1. Siding: Look for dents or buckling
  2. Foundations: Look for cracks or water seepage
  3. Exterior Brick: Look for cracked bricks or mortar pulling away from bricks
  4. Insulation: Look for condition, adequate rating for climate
  5. Doors and Windows: Look for loose or tight fits, condition of locks, condition of weatherstripping, you may want to consider whether something like window installation in Denver or wherever you are is worth it for the home you are buying, instead of rejecting a home on old windows.
  6. Roof: Look for age, conditions of flashing, pooling water, buckled shingles, or loose gutters and downspouts
  7. Ceilings, walls, and moldings: Look for loose pieces, drywall that is pulling awayPorch/Deck: Loose railings or step, rot
  8. Electrical: Look for condition of fuse box/circuit breakers, number of outlets in each room
  9. Plumbing: Look for poor water pressure, banging pipes, rust spots or corrosion that indicate leaks, sufficient insulation
  10. Water Heater: Look for age, size adequate for house, speed of recovery, energy rating
  11. Furnace/Air Conditioning: Look for age, energy rating; Furnaces are rated by annual fuel utilization efficiency; the higher the rating, the lower your fuel costs. However, other factors such as payback period and other operating costs, such as electricity to operate motors might also be needed to be taken into consideration. Also, as a side note, did you know that you could save on some money by buying bulk oil from companies like Bonded Oil Co. and others?
  12. Garage: Look for exterior in good repair; condition of floor-cracks, stains, etc.; condition of door mechanism
  13. Basement: Look for water leakage, musty smell
  14. Attic: Look for adequate ventilation, water leaks from roof
  15. Septic Tanks (if applicable): Adequate absorption field capacity for the percolation rate in your area and the size of your family
  16. Driveways/Sidewalks: Look for cracks, heaving pavement, crumbling near edges, stains

Hidden Home Defects to Watch For

It is a very personal decision to choose a home. Before you start seriously looking at homes, you should determine how much you can afford and what kind of area you’d like to live in (including neighborhood and school district) before you start ranking the importance of each aspect of a home. As an expensive purchase and long-term commitment, you must be sure you’re going to be satisfied with it before you buy.

No home is flawless, but certain physical problems can be expensive. When you are touring a home watch out for the items below. But most importantly, a home inspection will thoroughly examine and likely expose whether the home suffers from any of these issues. Find a professional and competent home inspector on our referrals page.

1. Water leaks. Look for stains on ceilings and near the baseboards, especially in basements or attics. For problematic leaks, call the professionals. Go to City Plumbing and Rooter if you need a plumber in San Fernando, or check your local companies that can help.

2. Shifting foundations. Look for large cracks along the home’s foundation.

3. Gutter. Look for gutter damage. Gutter leak can dampen interior walls, so it’s better to call a home installation and repair company like perfect exteriors as soon as possible.

4. Termites. Look for weakened or grooved wood, especially near ground level.

5. Worn roofs. Look for broken or missing copings and buckled shingles as well as water spots on ceilings. If need be, get in touch with a roofing contractor to get it checked and fixed on time.

6. Inadequate wiring. Look for outdated fuse boxes, extension cords (which signify a lack of outlets), and outlets without a place to plug in the grounding prong. If you notice any of these things, call an electrician from a company like Breeze Air-Heat & Electrical right away to have them fixed as soon as possible. That’s because these problems may prompt buyers to make a quick decision change.

7. Plumbing problems. Very low water pressure, banging in pipes.

The Pros & Cons of Condos

Condominiums and townhouses offer an affordable option to single-family homes in most areas. But consider these facts before you buy:

1. Storage. Some condos have storage lockers, but usually there are no attics or basements to store belongings.

2. Outdoor space. Yards and outdoor areas are usually smaller in condos, so if you like to garden or entertain outdoors, this may not be a good fit. However, if you hate yard work, this may be the perfect option for you.

3. Amenities. Many condo properties have swimming pools, fitness centers, and other facilities that would be very expensive in a single-family home.

4. Maintenance. Many condos have onsite maintenance personnel to care for common areas, do repairs in your unit, and let in workers when you’re not home.

5. Security. Many condos have keyed entries and or even door attendants. Plus, you’ll be closer to other people in case of an emergency. In case you’re searching for a condo, try to check sites similar to

6. Reserve funds and association fees. Although fees generally help pay for amenities and provide savings for future repairs, you will have to pay the fees agreed to by the condo board, whether or not you’re interested in the amenity or not.

7. Resale. The ease of selling your unit is more dependent on what else is for sale in your building, since units are usually fairly similar. Single-family homes usually are more individual.

8. Freedom. Although you have a vote, the rules of the condo association can affect your ability to use your property. For example, some condos prohibit home-based businesses. Others prohibit pets. Read the covenants, restrictions, and bylaws of the condo carefully before you make an offer.

9. Proximity. You’re much closer to your neighbors in a condo or townhome. If possible, try to meet your closest prospective neighbors before making a decision.

Weekly Market Statistics for McMinnville, Newberg, and all Yamhill County towns

Did you know that on our website we have a wealth of market data and statistics for each Yamhill County  town? Whether you live in McMinnville, Newberg, Carlton, or Amity, you’ll find specific real estate data for your town. Information like Median Sale Price, Average Days on Market, Percent of Properties with Price Decreases, sales and price trend, and much more.

Check out this week’s report for McMinnville, Oregon.

You can see all the reports for Yamhill County and surrounding cities (Sherwood & Hillsboro) by going to the Bella Casa website and clicking on Market Conditions by City on the left side-bar icon.

Many thanks to First American Title in McMinnville for providing these excellent reports!

Oregon Supreme Court Certifies Ballot Title

Efforts to stop a sales tax on transfers of real estate will begin in July.  Protect Oregon Homes – organized and supported by the Oregon Association of Realtors® (OAR) – received the go-ahead from the Oregon Supreme Court to begin the process to put a ballot initiative before the voters in 2012.  Despite repeated attempts to stop the efforts of Protect Oregon Homes, Realtors® were successful.  In July, signature gathering will begin to put the initiative on the ballot and to send an important message – don’t tax home equity.  OAR will continue to send updates on the campaign and information on what Realtors® can do to aid this important effort.  Additional information is available here.

If you are asked to sign a petition in the coming weeks, we encourage you to consider it. (Please be careful to only sign once!)

HUD offers Amazing 50% Discount Loan Program

Law enforcement officers, pre-Kindergarten through 12th grade teachers and firefighters/emergency medical technicians can contribute to community revitalization while becoming homeowners through HUD’s Good Neighbor Next Door Sales Program. HUD offers a substantial incentive in the form of a discount of 50% from the list price of the home. In return you must commit to live in the property for 36 months as your sole residence.

How the Program Works

Eligible Single Family homes located in revitalization areas are listed exclusively for sales through the Good Neighbor Next Door Sales program. Properties are available for purchase through the program for five days.

  • Property must be FHA REO
  • Teachers, EMTs, Firefighters, and Police Officers are eligible
  • Borrower buys home at 50% of sales price with HUD holding a “silent” 2nd for remaining 505
  • Borrower is able to finance all closing costs, prepaids, and Realtor’s commission
  • 2nd mortgage is forgiven after 3 years if the borrower still resides in home
  • $100 minimum investment into the property

Question: How Much of a Discount Can I Get on a HUD Home?

Answer: You can get a 50 percent discount off the HUD appraised value. For example, if HUD lists a home at $100,000, you can buy it for $50,000 provided, you occupy the home as your personal residence for the required occupancy period. If you qualify for any FHA-insured mortgage program, your downpayment is only $100 and you may finance closing costs.

Question: What Kind of Mortgage Financing Do I Need?

Answer: You may use FHA, VA, or conventional mortgages, or cash. HUD requires you to sign a Second Mortgage and Note on the discounted amount (which is $50,000 in the example above). No interest or payments are required on this “silent second” mortgage if you live in the home for the entire 36 month occupancy period. You may be required to pay a pro-rata portion of the discount to HUD should you fail to fulfill the three year occupancy requirement.

Question: What Is an FHA Rehabilitation Mortgage and How Can It Help Me Buy a HUD Home?

Answer: The FHA 203(k) mortgage program helps homebuyers buy a home and have enough money to rehabilitate or repair it. Repairs must cost more than $5,000. The cost of the repairs and the mortgage are combined into a single monthly payment. Consider FHA’s 203(b) program if needed repairs are under $5,000. FHA also has a new Streamlined 203(k) program which may be useful.

Special thanks to Venessa Ward for providing the information about the HUD Good Neighbor Program!

Pacific Residential Mortgage
Venessa Ward, Sr. Mortgage Banker, NMLS# 140124
117 NE 5th Street, Suite D
McMinnville, OR 97128
Office: 503-437-9200
Cell: 971-241-2001
Fax: 503-670-0674

Is It Better to Buy or Rent?

If you’re wondering whether renting is better than buying you need to take many factors into consideration, such as the rate of rising prices, how long you stay in the home, and lost opportunity costs. Compare the costs of buying and renting a home in a calculator we think is just fabulous. Input a few figures and the calculator will tell you which option suits your situation best, along with the specific costs associated with each.

Negotiating More than the Sales Price

When negotiating to purchase a home, many buyers focus mostly on the sales price, which is understandable. After all, a home is typically the largest transaction home buyers have been involved with and the price paid is a huge factor in their monthly payment.

However, in addition to negotiating the price of a home, a buyer can also negotiate to have the seller contribute money from the proceeds to allocate towards the buyer’s closing costs. This money can be used towards either the reduction of cash required to close and/or a reduction in the interest rate on the mortgage which I feel is very valuable. Having the seller pay an additional 1% can lower the monthly payment by around $60-$80 per month.

It’s easy to see the benefits for buyers to have a lower interest rate on their mortgage. However, one aspect of this situation not often considered is that the IRS treats points that are paid up front to lower a mortgage interest rate as pre-paid interest, regardless of who pays the fees. This means that when buyers negotiate to have the seller pay the costs to lower their interest rate, they receive the benefit of deducting them on their income taxes in the year the home is purchased.

By focusing on these terms – and, frankly, opportunities – home buyers can save money both now and over time. Please let me know if I can assist you in any way… I’m here to help!

Travis Newton
Sr Mortgage Banker
Preferred Mortgage
Phone: 503-931-4490
Fax: (503) 779-1234
License: ML137