Taking Fear Out of the Mortgage Process

A considerable number of potential buyers shy away from jumping into the real estate market due to their uncertainties about the buying process. A specific cause for concern tends to be mortgage qualification.

For many, the mortgage process can be scary, but it doesn’t have to be!
In order to qualify in today’s market, you’ll need a down payment (the average down payment on all loans last year was 5%, with many buyers putting down 3% or less), a stable income, and good credit history.

Throughout the entire home buying process, you will interact with many different professionals who will all perform necessary roles. These professionals are also valuable resources for you.

Once you’re ready to apply, here are 5 easy steps that Freddie Mac suggests to follow:

1. Find out your current credit history & score – even if you don’t have perfect credit, you may already qualify for a loan. The average FICO Score® of all closed loans in September was 731, according to Ellie Mae.
2. Start gathering all of your documentation – income verification (such as W-2 forms or tax returns), credit history, and assets (such as bank statements to verify your savings).
3. Contact a professional – your real estate agent will be able to recommend a loan officer who can help you develop a spending plan, as well as help you determine how much home you can afford.
4. Consult with your lender – he or she will review your income, expenses, and financial goals in order to determine the type and amount of mortgage you qualify for.
5. Talk to your lender about pre-approval – a pre-approval letter provides an estimate of what you might be able to borrow (provided your financial status doesn’t change) and demonstrates to home sellers that you are serious about buying!

Bottom Line
Do your research, reach out to professionals, stick to your budget, and be sure that you are ready to take on the financial responsibilities of becoming a homeowner.

Let The McLeod Group Network assist you with all your home-buying needs! 971.208.5093 or admin@mgnrealtors.com.

By: KCM Crew

How Long Does Underwriting Take—and Can You Speed It Up?

How long does underwriting take? Underwriting—the process in which mortgage lenders verify your assets to get a home loan—can last a little as two to three days, but typically takes over a week to finish.

Underwriting happens right before you close on a house, so timing can be crucial, particularly if you want to move in by a certain date. But make no mistake: Underwriting is unavoidable. All loans go through an underwriting process before the lender can promise you the funds for a purchase.

While you might have daily contact with your mortgage officer, the underwriting process is long, somewhat secretive, and seemingly mysterious. And very, very stressful! Here's why it takes so long, and a way to speed up the process.

What is underwriting?

Your mortgage officer typically reviews buyers' tax forms, paystubs, and other basic documents before issuing buyers a prequalification. Underwriting takes a fine-toothed comb through every form, deposit, and credit report, to ensure your credit-worthiness. An underwriter's job is to make sure you meet the lender's guidelines, confirming and assessing your income, debt, and credit.

Most of the mortgage process is relatively transparent, but underwriting takes place behind closed doors. Someone at the bank or a lender will relay any requests for documents or further explanations.

What does an underwriter look at?

The specific documents requested will vary based on the type of loan you are receiving (an FHA loan, for example, often requires more paperwork). Expect to provide your tax returns, W-2s, bank statements, and paystubs.

You can also expect to send additional documentation every time an underwriter has a question. For instance, your bank statement might show a recent $2,000 deposit. Youknow it's a birthday gift from your dear grandmother, but the underwriter doesn't. You will probably have to write a letter of explanation detailing the gift.

Underwriting can be frustrating, because the questions seem obvious. Don't worry—many underwriters find it frustrating, too.

"The banks also give almost no room for underwriters to make exceptions using their judgment," says Emily Rees, a former underwriter. "Underwriters are terrified of getting a loan audited and having a bad score, so they frequently will over-ask for documentation to cover their behinds, rather than stand confident in a decision and moving on."

How to speed up underwriting

The best way to speed up the process is to make sure your paperwork is complete, which should allow your loan to sail through in as little as two to three days—if you're lucky, even just one day.

But if more documents are required—as is true for the vast majority of loans, even for those with perfect credit—expect to wait at least a week for the underwriter to issue a "conditional approval."

Although the underwriting process can be frustrating, just know that you're near the finish line. If the underwriter only wants a few additional documents, you should be "clear to close" soon enough!

For more smart financial news and advice, head over to MarketWatch.

By: Realtor.com, Jamie Wiebe

4145 Geranium Loop NE: Newer Geranium Meadows Home at an Affordable Price!

Salem-Keizer OR Real Estate For Sale
4145 Geranium Loop NE, Salem, OR  97305

Opportunity is knocking – here is your chance to live in a newer home at an affordable price in a great neighborhood! This Geranium Meadows 3 bedroom, 2.5 bath home offers an open layout filled with large windows, fresh paint, new carpeting, a lovely kitchen, recessed lighting, neutral colors, plus a low maintenance yard and attached 1 car garage. Illuminated with natural light, the large, open living and dining room is warm and inviting creating the perfect atmosphere for casual everyday living and entertaining.  Guests can relax at the breakfast bar while you wine and dine them from this stylish and functional kitchen. An abundance of beautiful cabinetry and tons of counter space make meal prep a breeze. Heading upstairs you will find the three generously sized bedrooms including the master suite with a walk in closet and private bath. Relax in the fenced backyard with plenty of room to BBQ on the patio. Why pay rent when you can afford to own this beautiful home! Sale subject to 1031 Exchange at no expense to buyer.

The McLeod Group Network has distinguished themselves as a leader in the Salem Oregon real estate market. As a full service, real estate team - focused on working with our Seller and Buyer clients to help achieve their real estate goals!

We bring a keen eye for the details of buying or selling a Salem Oregon home and seemingly boundless determination and energy, which is why our clients benefit from our unique brand of real estate service. Rooted in Tradition, focused on the Future –The McLeod Group Network will help make the most of your Salem Oregon real estate experience. With over 40 years of combined experience, you can rest assured that your real estate transaction will be handled and cared for with the utmost respect and attention to detail. Give us a call today 503-798-4001 and discover the difference we can make during your family's move.

5 Tips for Starting Your Home Search

In today’s real estate market, with low inventory dominating the conversation in many areas of the country, it can often be frustrating to be a first-time homebuyer if you aren’t prepared.

In a recent realtor.com article entitled, “How to Find Your Dream Home—Without Losing Your Mind,” the author highlights some steps that first-time homebuyers can take to help carry their excitement of buying a home throughout the whole process.

1. Get Pre-Approved for a Mortgage Before You Start Your Search

One way to show you are serious about buying your dream home is to get pre-qualified or pre-approved for a mortgage before starting your search. Even if you are in a market that is not as competitive, understanding your budget will give you the confidence of knowing whether or not your dream home is within your reach.

This step will also help you narrow your search based on your budget and won’t leave you disappointed if the home you tour, and love, ends up being outside your budget!

2. Know the Difference Between Your ‘Must-Haves’ and ‘Would-Like-To-Haves’

Do you really need that farmhouse sink in the kitchen to be happy with your home choice? Would a two-car garage be a convenience or a necessity? Could the ‘man cave’ of your dreams be a future renovation project instead of a make-or-break right now?

Before you start your search, list all the features of a home you would like and then qualify them as ‘must-haves’, ‘should-haves’, or ‘absolute-wish list’ items. This will help keep you focused on what’s most important.

3. Research and Choose a Neighborhood You Want to Live In

Every neighborhood has its own charm. Before you commit to a home based solely on the house itself, the article suggests test-driving the area. Make sure that the area meets your needs for “amenities, commute, school district, etc. and then spend a weekend exploring before you commit.”

4. Pick a House Style You Love and Stick to It

Evaluate your family’s needs and settle on a style of home that would best serve those needs. Just because you’ve narrowed your search to a zip code, doesn’t mean that you need to tour every listing in that zip code.

An example from the article says, “if you have several younger kids and don’t want your bedroom on a different level, steer clear of Cape Cod–style homes, which typically feature two or more bedrooms on the upper level and the master on the main.”

5. Document Your Home Visits

Once you start touring homes, the features of each individual home will start to blur together. The article suggests keeping your camera handy and documenting what you love and don’t love about each property you visit. They even go as far as to suggest snapping a photo of the ‘for sale’ sign on the way into the property to help keep the listings divided in your photo gallery.

Making notes on the listing sheet as you tour the property will also help you remember what the photos mean, or what you were feeling while touring the home.

Bottom Line

In a high-paced, competitive environment, any advantage you can give yourself will help you on your path to buying your dream home.

Let The McLeod Group Network help you get started! 971.208.5093 or admin@mgnrealtors.com.

By: KCM Crew

How to Find Your Dream Home—Without Losing Your Mind

Finding your dream home is an exciting adventure that, at times, can also feel all-consuming. On a good day, it's fun to swipe through listings and whiz through every open house in your area, but after umpteen hours of it—and perhaps a lost bidding war or two—it can almost drive you mad.

If you sometimes feel like you're spinning your wheels and wandering aimlessly from property to property, we get it. House hunt burnout is real. Yet there are also plenty of smart ways to keep your stress levels and sanity on even keel.

Get pre-approved for a mortgage before you even start

Do not pass Go, do not even look at online listings until you have your mortgage pre-approval lined up.

“Not only will a pre-approval make it easier to eventually make an offer as a serious buyer, but it will also help you narrow down your property search criteria so you can focus better,” notes Jackie Hinton, a real estate broker for Center Coast Realty in Chicago.

That’s because the pre-approval letter will detail the maximum mortgage loan you're approved for, or your instant housing budget!

Make a must-have list and stick to it

This is not as easy as it sounds, says Hinton. “Before you start looking, write down the non-negotiable features your new home needs. Then if a place doesn't have everything on the list, don't go see it, no matter how curious you are,” she advises.

And the more specific the criteria, the better, contends Kate Herzig, an agent with Golston Real Estate in Arlington, VA. “For example, where I live, garages are really hard to come by, so if a garage is an absolute must-have, that is an easy way to narrow down your list of potential homes,” she says.

Focusing your list has a complementary benefit, in addition to saving time: It can help prevent “list creep,” which typically occurs when you see shiny objects in each new house. If you’re not careful, all of a sudden you might find your “must-have” list has grown from “3BR/2BA and a decent commute” to a new lust for a chef’s kitchen when you barely cook.

Home in on the neighborhood

Find an area that meets your criteria for amenities, commute, school district, etc., and then spend a weekend exploring before you commit, suggests Hinton.

“You might find that you don't like an area as much as you thought you would because it’s impossible to find parking,” she says. Or, you might discover another hidden pocket that you love and didn't realize was nearby.

Once you’ve taken a test drive and selected a neighborhood that you know is The One, home in on listings in that specific ZIP code. This allows you to shut out a lot of the noise that can make you crazy with options.

Pick a house style and forget about the others

Use a similar strategy with types and styles of properties. Once you’ve picked your neighborhood, resist the urge to visit everything that’s available, from condos to townhouses, bungalows, and beyond.

“Every type of house has its own unique style, so you can eliminate homes that won’t suit your needs,” says Nick Woodward, a real estate agent at Keller Williams in West Hartford, CT.

For example, if you have several younger kids and don’t want your bedroom on a different level, steer clear of Cape Cod–style homes, which typically feature two or more bedrooms on the upper level and the master on the main.

Document your visits

It’s inevitable that by the fourth or fifth property, everything is going to start to blur together during a marathon day of showings. Brian Wasson, an agent with eXp Realty in Chicago, advocates keeping your smartphone handy and snapping photos from the minute you roll up to the driveway.

“Taking a picture of the ‘For Sale’ sign or front of the property first makes it easy to later distinguish between sets of photos,” notes Wasson.

Then, as you walk through the home, capture photos of everything you like, such as a killer view or to-die-for chef’s kitchen, as well as anything that feels awkward or out of place, from scary shag carpet to a funky layout. Take notes on the listing sheet so you can easily remember what features you were trying to capture in the photos, and you’ll have a great play-by-play of the house to relive later.

Remember only the top three contenders

“I tell my buyers that a home is either a contender or not,” says Brian Adams, real estate agent with StarPointe Realty in Killeen, TX. In other words, either it's one of your current top three properties or you should forget about it. This simple trick means you have to keep only three homes in mind at a time.

Stop looking at listings already!

At some point, you have to just stop looking for additional options, says agent Zoe Kellerhals Madussi, a real estate agent at Triplemint in New York City.

“Some clients keep looking even after we have an accepted offer on a great place, still believing something better might come along,” she says. Eventually, you have to be satisfied with the choices at hand and make a decision. Just remember: The grass is rarely greener.

Let’s get together and find your dream home! Contact The McLeod Group Network at 971.208.5093 or admin@mgnrealtors.com.

By: Realtor.com, Cathie Ericson

8 'Valuable' Home Features That May Be a Big Waste of Cash

No one likes to overpay for a purchase, and this is particularly true when buying a home. After all, every square foot of space or block closer to a top school will cost you big-time!

So if you're a thrifty soul who must make every home-buying dollar count, check out these home features that often inspire sellers to jack up their price. That's fine if you truly want these things, but if not? You're wasting your money.

1. A huge yard you rarely enjoy

A sprawling green lawn may have a certain curb appeal at first sight. And if you have kids or plan to spend a lot of time outdoors, it's a fine feature to splurge on. But if you doubt anyone will be out there much, you're just tossing money out the window.

It turns out sellers charge a premium for that patch of grass, and you'll funnel even more money going forward on lawn maintenance (or else spend your weekends mowing, weeding, and pruning the yard).

"It could end up just costing you a lot of money to maintain, even though it’s not being enjoyed," says Tim Bakke, director of publishing at the Plan Collective, a website that provides house plans.

2. A short commute you won't use

If you work from home, commute at off-hours, work in the suburbs, or are retired, don't pay extra to buy a house near mass transit, or within easy driving distance of major office areas—those are homes that regular commuters might covet, prompting sellers to charge up the wazoo.

"Homes closer to major commerce centers cost quite a bit more than homes in outlying or suburban areas," says real estate agent Jamie Klingman at Boutiquerealtyflorida.com.

Is this an important factor to you? If not, consider a home that's a bit farther out to save cash.

3. A top school district when you don't have kids

A home zoned for a great public school will always command top dollar on the open market.

"And you'll also pay for this through your taxes," says Bakke.

However, if you don't have (or plan to have) kids, why empty your wallet to send someone else's child to school? Look for homes just outside the district to save on purchase price and property taxes.

4. A single-story house when you're fine with stairs

In many locations, homes all on the same level command a higher dollar value because the boomer generation prefers them when downsizing, says Jen Nelson, an agent in Phoenix.

If you can handle going up a flight of stairs or two, consider a two-story house to get more bang for your buck. (Another bonus? A smaller roof to replace when the time comes.)

5. A bigger house than you truly need

Very often buyers purchase a home that's way bigger than they actually need.

"People end up with too much house and not even using the rooms they have," says Pat Vosburgh, a certified real estate negotiation expert at Vosburghandvosburgh.com.

Since a purchase price directly reflects things like size, why overpay for bedrooms or media rooms you won't use—and have to heat, cool, furnish, and clean? Instead, protect your bank account by looking only for homes that reflect how much space you'll actually use.

6. A hot neighborhood

A hip neighborhood that everyone's buzzing about can send home prices soaring. But getting caught up in the hype and overspending in an area where prices haven't quite gelled yet can be a risky proposition where you end up (you guessed it) overpaying. Buy homes only in new areas that are still a relative bargain.

7. Fancy amenities you won't use

Here's a reality check: If you don’t drink wine regularly, you don’t need a wine refrigerator—or to pay for a house with one, either.

"A six-car, air-conditioned garage or a built-in commercial pizza oven may appeal to a specific buyer," says Bruce Ailion of Atlanta's Re/Max Town and Country. But such premium upgrades and add-ons will send a purchase price north, so you'd better make sure you use whatever you buy, often.

This is especially true when you buy a condo or a home in a planned community, since you'll have to consider the monthly condo or HOA fees you'll be paying as part of your purchase price. Make no mistake, those fees are for amenities—think a gym or lounge—so if you don't plan to take advantage of these features, you're squandering your money.

8. The nicest house in the neighborhood

It may be tempting to snag the home with the biggest price tag in a certain ZIP code for bragging rights. "But you never want to buy the most expensive home in the neighborhood," says Vosburgh.

While it might be fun to know your casa is the area’s castle, having the top comp in a neighborhood may become an issue when it comes time to sell. This scenario leaves little room for your home's price to appreciate, so you may not be able to recoup what you paid. So unless you're truly smitten with this home, buyer beware.

Contact the expert's on The McLeod Group Network for all your Real Estate needs! 971.208.5093 or admin@mgnrealtors.com.

By: Realtor.com, Margaret Heidenry 

2 Factors to Watch in Today’s Real Estate Market Whether Buying or Selling

When it comes to buying or selling a home there are many factors you should consider. Where you want to live, why you want to buy or sell, and who will help you along your journey are just some of those factors. When it comes to today’s real estate market, though, the top two factors to consider are what’s happening with interest rates & inventory.

Interest Rates

Mortgage interest rates have been on the rise and are now over three-quarters of a percentage point higher than they were at the beginning of the year. According to Freddie Mac’s latest Primary Mortgage Market Survey, rates climbed to 4.72% for a 30-year fixed rate mortgage last week.

The interest rate you secure when buying a home not only greatly impacts your monthly housing costs, but also impacts your purchasing power.

Purchasing power, simply put, is the amount of home you can afford to buy for the budget you have available to spend. As rates increase, the price of the house you can afford to buy will decrease if you plan to stay within a certain monthly housing budget.

The chart below shows the impact that rising interest rates would have if you planned to purchase a $400,000 home while keeping your principal and interest payments between $2,020-$2,050 a month.

With each quarter of a percent increase in interest rate, the value of the home you can afford decreases by 2.5% (in this example, $10,000). Experts predict that mortgage rates will be over 5% by this time next year.

Inventory

A ‘normal’ real estate market requires there to be a 6-month supply of homes for sale in order for prices to increase only with inflation. According to the National Association of Realtors (NAR), listing inventory is currently at a 4.3-month supply (still well below the 6-months needed), which has put upward pressure on home prices. Home prices have increased year-over-year for the last 78 straight months.

The inventory of homes for sale in the real estate market had been on a steady decline and experienced year-over-year drops for 36 straight months (from July 2015 to May 2018), but we are starting to see a shift in inventory over the last three months.

The chart below shows the change in housing supply over the last 12 months compared to the previous 12 months. As you can see, in June, July, and August, inventory levels have started to increase as compared to the same time last year.

This is a trend to watch as we move further into the fall and winter months. If we continue to see an increase in homes for sale, we could start moving further away from a seller’s market and closer to a normal market.

Bottom Line

If you are planning to enter the housing market, either as a buyer or a seller, let’s get together to discuss the changes in mortgage interest rates and inventory and what they could mean for you. 971.208.5093 or admin@mgnrealtors.com.

By: KCM Crew