Use these tips in any city or town in Oregon
CHECK YOUR OWN CREDIT HISTORY
Do you know what’s in your credit file? Your local credit bureau may have detailed information on your financial status which they sell to interested parties. When you apply for a mortgage loan, the bank will review your bill paying history as reflected in your credit file. Negative information, even if it’s wrong, can cause your application to be rejected – or at least questioned. Don’t wait until you NEED credit before checking out your credit history. Ask your bank how to find your credit bureau.
Under the Fair Credit reporting Act, you have the right to receive a copy of your credit report. There is normally a small charge ($5 to $15) unless you’ve been turned down within the last 30 days (in which case you can review your file for free.)
You can require the bureau to investigate any item which you think is incorrect or incomplete. It must correct all mistakes and notify anyone who recently looked at your file of any correction.
CHECK LOAN CHANCES FIRST
Buying a home in Pendleton has never been an easy task and it’s not getting any easier. Pendleton home values continue to increase faster than the cost of living. I see would-be buyers who have searched for months to find a “dream home” only to find out they could not qualify for a loan for that price house.
Ironically, it’s a heartache most buyers can avoid simply by doing a bit of arithmetic and talking with their Realtor or Lender BEFORE they start hunting for a new home. If you know how much the bank will lend you PRIOR to your Pendleton home hunting, you won’t waste time looking for a house you may not be able to afford.
I am familiar with the local bank and can recommend a loan officer to visit with. Bring your financial numbers along (assets, debits, gross income, expenses, etc.). You’ll get an estimate of how much the bank will lend you and have something solid to work with to look for a home that fits your budget.
If you think a 5 or 10-year auto loan is a long time to pay off a car, get ready for the 40-year mortgage. It’s just popping its head over the horizon now. Climbing real estate values are forcing some borrowers to stretch home loan payments beyond the conventional 15 or 30-year periods.
So far, these 40-year mortgages have caught on only in such high-priced real estate markets such as California, New York and Washington, D.C. However, if home prices continue upward, longer term mortgages may spread.
If the 40-year mortgage becomes more popular, it should be treated gingerly – as a last resort for folks anxious to own a home in Pendleton at any price. That crucially lower monthly payment may sometimes make the difference for certain buyers to qualify for a loan. However, you’ll pay for the opportunity with a decade of extra interest. This could be a lot – like $60,000 on a $100,000 loan.
BEST AND WORSE SCENARIOS
All lenders must now meet disclosure requirements for adjustable rate mortgages (ARMS). Among these are: an historical example of how the requested loan would have worked during the last 15 years; how to convert that example to the borrower’s own situation, and a worst-case illustration of how the loan could perform if rates go up through the roof.
To show how the loan will perform under the worst possible circumstances, the example starts at the initial rate and moves rapidly up to the top interest rate and payment possible. Lenders must also explain how the index is adjusted and how future interest rates and payments will be determined.
As you know, interest rates can change either upward or downward with an adjustable loan. It’s nice to know how these rate changes (in either direction) will affect your future monthly payments. That’s what the disclosure will tell you.
CASUALTY LOSS DEDUCTIBLE
What can you do when you have serious damage to your home in Pendleton but not enough insurance to cover the loss? If the damage was not fully paid for from insurance proceeds, you can take a deduction on your federal income tax. What kind of losses qualify for this deduction?
Generally, to qualify for the federal casualty loss tax deduction, the cause must occur quickly and unexpectedly and not be a routine event. Examples include a fire, flood, theft, accident, earthquake, vandalism, tornado, broken water pipes, hurricane or earth slide. You should be prepared to prove such losses in case of an audit. To prove your losses, you should have before-and-after photos, professional appraisals, repair bills, police reports, purchase receipts and insurance settlement appraisals.
The amount you may deduct on a casualty loss is the decline in the property’s market value, less insurance payments and a $100 deduction. Frankly, you’re better off having enough insurance.
DON’T PASS UP A GEM
First impressions are important, but don’t let them keep you from missing a real gem of a home. Stop and consider the possibilities.
Does the place need just a few cosmetic improvements to feel right? Would new carpeting, appliances, contemporary hardware, different light fixtures or fresh paint and paper make the place feel like home? These are fairly minor changes and are relatively easy alterations to make.
Check your storage needs against the possibilities for expansion. How about bathrooms? If the addition of a first floor powder room would make this house perfect, is there room for one? Look at all the nooks and crannies as having potential “growing room.” Remember interior spaces can be reworked, walls removed, spaces reoriented and traffic redirected to make a chopped-up floor plan flow like magic. Built-in bookcases can be added and windows and doors can be replaced with a style and decor which feels more like “home” to you.
HOTTER, CLEANER WOOD STOVES
Cars have emission standards – now, wood stoves do too. The EPA has set strict standards on how much soot, gas and pollution can go up the chimneys of all wood-burning products. Some units now on the market already meet or exceed these standards. New technology has allowed wood stoves to clean up their pollutants and operate at new levels of efficiency.
Most of the new wood stoves are using a catalytic combustor to meet the EPA requirements. Placed on the baffle or damper inside the exhaust vent, a catalytic combustor burns the gases that otherwise would escape up the chimney. The result is 80 to 90 percent less emission and increased heat output.
Catalytic combustors can be retrofitted to existing wood stoves, although these are less efficient than built-ins. The combustor will need replacement after two to five years, but by burning only well-seasoned hardwoods, you can reduce this problem.
My next blog post will cover: First Time Home Buyer, Landscaping Can Raise Value and Like for Like Exchange. See you then!