IF You Are Thinking of Buying Portland Real Estate…Why Buying Now Will Save You $$$!!!

Filed Under buying or selling a home, buying or selling a home in Portland Oregon, mortgages · Tagged: , , ,  

Portland Oregon Real Estate Update!  Homeownership doesn’t always make sense and so you need evaluate if the time is right for making that new purchase, moving up or moving down or procuring an investment property.  However, as my Father used to say there’s never a “perfect time” to “buy a home”, “get married” or “have children”, but if you’ve decided it’s something you desire you just need to make it happen (with the proper due diligence, of course)!  Here are some factors that could and should impact your decision!!  Most everyone is probably aware by now of the first-time buyer tax credit (go to http://bit.ly/Original1stTimeBuyerCredit  for more information).  And, you’ve probably heard about the repeat or existing homebuyer tax credit (go to http://bit.ly/RepeatBuyerTaxCredit for more details).  Both of these incentives end April 30th, 2010.  But, there are other factors in play behind the scenes right now.  The Federal Reserve Bank of New York has been the buying up “mortgage-Backed-Securities” (MBS) on the Bond Market since November 2008 (and have been the single largest buyer).  This is where interest rates are determined.  Investors buy MBS securities as investments.  The larger the demand, the lower interest rates need to be.  If demand falls, then interest rates will need to rise to make the MBS more attractive to investors.  Part of the stimulus bill included the Federal Reserve’s purchase of over $1trillion in MBS and this has kept rates very low.  This program was scheduled to end December 31st, 2009 but has been extended through March 31st, 2010!  Many experts predict that interest rates will begin to rise then.

So, are you following me so far?  We have the impending end of the tax credit, the possibility of interest rates rising, lots of existing inventory and low pricing.  Most of the tricky, sticky, weird and wild loans are gone but other mortgage issues could have a negative impact on buyers relying on FHA (Federal Housing Authority) insured loans.  The FHA upfront mortgage insurance (MI) premium is going from 1.75% to 2.25% of the base loan amount on April 1st, 2010.  For example, on a $275,000 purchase price with an FHA loan, the down payment would be $9,625 with a base loan amount of $265,375:

Before April: Upfront MI FHA =$4,644 (1.75%), Tax Credit=$8000

After April:  upfront MI FHA=$5,971 (2.25%), Tax Credit=0

Many people rely on FHA secured financing because they are more forgiving on credit scores and homeowners can have a higher loan-to-value ratio (less money required for a downpayment). 

Forbes.com recently has an article on the Top Ten cities where it was a good time to make the jump to homeownership because of increasing rents (and Portland Oregon made the list) (go to http://www.forbes.com/2010/01/21/buying-versus-renting-lifestyle-real-estate-homes.html  and http://www.forbes.com/2010/01/21/buying-versus-renting-lifestyle-real-estate-homes_slide_11.html to read more).  And, if you’d like to explore a good rent-vs-buy calculator go to http://www.gonorthwestloans.com/mortgageLoanCalc.html

If you have decided that a new home is in your future, let’s make it happen!!!

February 6, 2010 by jackson : No Comments

Comments

Feel free to leave a comment...
and oh, if you want a pic to show with your comment, go get a gravatar!