3 Reasons to Consider a 15-Year Mortgage Vs. A 30-Year Mortgage

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By Jason Boone

As a home buyer you have a lot of decisions to make ahead of you and one of the biggest decisions is should you choose a 15-year mortgage or a 30-year mortgage?

Although many people will tell you by default that a 30-year mortgage is always the best mortgage to choose when purchasing a home here are three important reasons why you should consider choosing a 15-year mortgage loan.

Reason 1 – One Percentage Point Lower Thank 30-Year Mortgage

Thanks to recent statistics from Bankrate.com we know that an average 30-year mortgage right now has an interest rate of 4.25% while a 15-year mortgage interest rate is averaging about 3.25%.

This is huge when you consider the potential savings that you could enjoy when choosing a 15-year mortgage loan vs. a 30-year mortgage loan.

The reality is that choosing a 15-year mortgage loan isn’t for everyone and you must make certain that you are ready for this commitment financially before going with this option.

Reason 2 – Choosing a 15-Year Mortgage Will Make You More Disciplined Financially

Paying a mortgage every month does require commitment for sure but choosing a 15-year mortgage requires even more financial commitment and discipline because, you will be required to make a higher monthly mortgage payment.

For example: Let’s say that you choose a 15-year $250,000 mortgage loan at 3.25%. Your mortgage payment will be roughly $1,755 per month while you would be paying just $1,230 for your mortgage payment if you had a 30-year mortgage.

The financial commitment is important to keep in mind before signing the loan documents for a 15-year mortgage but ultimately the results will be worth it if you want to have your mortgage paid off well before you retire and enjoy your golden years without a mortgage payment.

Reason 3 – You Will Quickly Build Home Equity

Did you know that when you choose a 15-year mortgage over $13,000 of the mortgage payments that you make in the first year of your mortgage will go toward home equity? Awesome right?

This is a huge difference when compared to just $4,200 in home equity that you will build up during the first year of mortgage payments that you would make on a 30-year mortgage loan.

Contact Me

For more valuable tips that will help you when buying a home in Bend, or to view the latest homes for sale in the area, contact me, Jason Boone Principal Broker at Duke Warner Realty | Skjersaa Group by calling me today at (541) 383-1426 or click here to contact me online.

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What Does It Really Take To Qualify For A Home Loan In 2014?

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If you ask any Bend Oregon Realtor or Mortgage Broker they will tell you that the requirements for qualifying for a home loan in 2014 have changed but thankfully even though it may be more difficult to get a home loan in this day and age compared to 2006 for example it’s not impossible.

Credit Score

The core and most important thing that you must have when applying for a home loan is a credit score that’s between 580 and 640 because, any credit score lower than this means you will have a harder time finding a lender who is willing to offer you a mortgage loan.

What’s great about applying for a mortgage loan in 2014 is you have more options available to you and even if you have a lower FICO score you could still qualify for an FHA loan so hope is still out there for you.

Job History

Lenders want to see stable employment histories of 2 years or more because, job stability means you will be more than likely able to make your mortgage payments on time and not fall behind.

Although lenders want to find people who have stable employment histories they will also consider income from other sources like social security, self-employment, income from your investments and proven income from child support.

Down Payment

Although most Realtor’s and brokers will tell you that you have to put down 20% to get into a home that’s not always necessary because, you could choose a loan option which doesn’t require you to put any money down like USDA-RD or a VA Loan.

You can also choose an FHA loan (3.5% down payment) or a conventional loan (5% down payment).

Ability To Repay – The Key To Qualifying For A Home Loan

Last of all, but most important, one of the top guidelines for qualifying for a mortgage loan in 2014 is you have to be able to prove that you have the ability to repay your mortgage loan.

Your recurring debt (car loan, credit cards or student loans) must not be 43% of your gross monthly income because, a higher debt-to-income ratio means you will have a harder time paying off your mortgage loan.

For all of your Real Estate needs contact me today by calling (541) 383-1426 or click here to contact me through my website.

Mortgage Interest Rates Drop for Second Straight Week

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Mortgage interest rates in the United States fell for the second week in a row as more home buyers, especially those in Bend ventured out to start searching for homes once again.

Thanks to recent statistics from Freddie Mac we know that the mortgage interest rate for a 30-year fixed loan fell to 4.27 percent recently and the mortgage interest rate for a 15-year fixed mortgage loan is now at 3.33 percent.

What Does This Mean For You?

If you’re thinking about buying a home in Bend now is the right time to get pre-qualified for a mortgage loan because many economists feel that mortgage interest rates will continue to remain low throughout 2014 as unemployment has remained high and job growth hasn’t increased like Washington had hoped.

Historically Low Mortgage Interest Rates

Did you know that mortgage interest rates can be considered to be historically low when compared to where the mortgage interest rate for a 30 year fixed mortgage loan has been over the last 30 years?

2006 – 6.41%

2000 – 8.05%

1994 – 8.38%

1990 – 10.13%

1987 – 10.21%

1984 – 13.88%

Get Pre-Qualified For a Mortgage Loan Now

The best thing that you can do as a Bend Oregon home buyer is get pre-qualified for a mortgage loan now so you can lock in a low mortgage interest rate while it still lasts.

To get pre-qualified for a mortgage loan you will need to provide proof of your income, proof of your assets, have good credit (740 credit score or above), provide employment verification and also copies of your personal information like driver’s license, social security card and more.

For all of your Real Estate needs contact me today by calling (541) 383-1426 or click here to contact me through my website.

Most Lenders Still Not Excited About QM Rules

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Back in January 2014 the Qualified Mortgage Rule (QM) was put into place and it’s phase one of two rules from the Dodd-Frank Wall Street Reform and Consumer Protection Act that’s expected to strengthen the housing market and protect consumers.

How Will It Protect Consumers?

The Qualified Mortgage Rule will protect more consumers across the United States by making underwriting standards stronger although some economists, Realtor’s and mortgage brokers have argued that it will ultimately increase costs that consumers will have to pay and make it harder for them to get mortgage loans for homes

Insight into the New QM Rule

Thanks to a recent study by the National Association of Realtor’s (NAR) we know more about the impact that the Qualified Mortgage Rule will have on businesses and consumers across the United States.

Lenders across the United States were asked the question “would you impose a buffer in advance of the 43% debt to income requirement? If so, what would it be?” and the answers were interesting:

  • 68.4% of respondents said they would not support a buffer in advance of that restriction which would enable them to protect themselves.
  • 15.8% said they would support a “modest buffer” at 42.5%.
  • 10.6% of those surveyed said they would support buffers of at least 41% to 42%.

Looking Into the Future

Thanks to the new Qualified Income Rule all Consumers and even Realtor’s should expect more changes in the Real Estate industry because, consumers will have to more fully document their employment and income from all sources and so much more.

For those consumers who have high debt to income ratios it’s likely that Freddie Mac and Fannie Mae will work with them, but unless those consumers work hard to pay down their debts, they can expect to be offered mortgage loans with higher fees and higher interest rates because, they will fall into the non-QM category.

What does it all mean for you, the consumer? It’s still possible for you to get into a home regardless if you have less than perfect credit or a high debt to income ratio.

You need a local Realtor who has the right connections to help you find the right mortgage broker and get into the home of your dreams.

For a free Real Estate consultation call me today at (541) 383-1426 or click here to contact me through my website.

Mortgage Payments Rose in Fourth Quarter Of 2013

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It’s no surprise that with the improving economy almost every part of the Real Estate market is going up including mortgage payments.

In a recent report from RealtyTrac we know that mortgage payments rose 21 percent in the fourth quarter of 2013 to $865, from $714 in the fourth quarter of 2012, and that’s assuming that the home buyer purchased a median priced three bedroom home after obtaining a mortgage with a 4.46 interest rate.

Cause for Concern?

In a recent interview Darren Blomquist of RealtyTrac said this about home ownership in 2013-2014 ““The monthly cost of owning a home is still less than renting in the majority of markets, but the cost of financed home ownership is becoming dangerously disconnected with still-stagnant median incomes, driven not by shoddy underwriting practices this time around but by investors and other cash buyers who are not tethered to the typical affordability constraints”.

Regardless of what the financial industry thinks about home affordability and mortgage interest rates is it still a smart idea to buy vs. rent a home in Bend Oregon in 2014? The answer to this question is yes, buying a home vs. renting is still one of the best decisions that you can make for yourself because, with home ownership you will be able:

  • Build equity.
  • Pay less money for your home over a 10 year period vs. renting.
  • Generate positive cash flow if you decide to rent your home.

Where Do You Want To Live In Bend?

Are you searching for a home at NorthWest Crossing, BrokenTop or any of Bend’s most well-known communities?

Let me help you with your home search! Call me today for a free Real Estate consultation and experience the difference that an experienced Bend Oregon Realtor can offer you.

Call me at (541) 383-1426 or click here to contact me through my website.

Fannie Mae Survey Confirms Most Americans Agree That’s its Easy to Get a Mortgage

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More American’s Are Getting Mortgages In Spite Of Stricter Regulations

BEND – Thanks to a recent Fannie Mae Survey we know that more American’s than ever before are feeling optimistic about getting mortgage loans and that’s good news considering the fact that with more rules and regulations in the mortgage industry it’s been difficult for home buyers to get mortgage loans but not impossible.

Impressive Statistics

Breaking down the Fannie Mae survey we know that 52 percent of the 1,000 consumers that were surveyed said that they believed it was going to be easy for them to get a mortgage loan while just 45 percent said that they believed getting a mortgage loan was going to be difficult.

The good thing about the Fannie Mae mortgage loan survey is that it’s the first time that the survey results have passed 50 percent for optimism when it comes to getting a mortgage loan and that’s good news since home buyers haven’t always been optimistic over the last five years after the crash of the housing market.

Right Time to Buy?

More consumers feel that that they have a variety of credit options available to them and Doug Duncan, the chief economist with Fannie Mae agrees when he said in a recent interview: “The gradual upward trend in this indicator during the last few months bodes well for the housing recovery and may be contributing to this month’s increase in consumers’ intention to buy rather than rent their next home”.

What’s your plan for the 2014? Are you going to continue renting or do you plan on buying a home in Bend Oregon?

If you’re like the 48 percent of people surveyed by Fannie Mae you feel too that rents for apartments, homes, condo’s and town homes in Bend are only going to continue rising which will make buying a home the most viable option since you truly get so much more for your money when you buy a home versus rent one.

To learn more about the Bend Oregon Real Estate market, or to view the latest homes for sale in the area, contact us today by calling (541) 383-1426.

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