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Janeese Jackson's Blog

By Janeese Jackson | Broker in Portland, OR
  • Lenders Expanding Options for Investors!

    Posted Under: Financing in Portland, Investment Properties in Portland  |  July 8, 2014 9:07 AM  |  41 views  |  No comments

    "The Lucky One" - Alison Krauss and Union Station

    If you are one of "the lucky ones" and you have amassed some investment properties, there is good news on the horizon.  Of late, it has been more difficult to find lenders who would easily lend on an investment property if the buyer(s) owned more than four properties (and, that included your primary residence).  Now lenders are expanding options for investment buyers.

    available for investors with five to ten financed properties
    single unit, second homes and investment properties allowed
    multiple unit properties allowed (duplex to 4-plex)
    25% down payment for one unit
    30% down payment for two to four units
    720 minimum credit score
    This is a great opportunity to continue to build wealth through real estate.  And, of course, the ability to utilize other people's money (the mortgage) increases your return on investment!!
  • Set Up Your Own Accelerated Mortgage Pay-Off Plan!!!

    Posted Under: Financing in Portland, Property Q&A in Portland  |  July 7, 2014 3:45 PM  |  47 views  |  No comments




    "Tighten Up" - The Black Keys

    This is a re-posting of an article written by Clark Howard, a nationally-syndicated consumer expert who shows consumers ways to save more, spend less and avoid getting ripped off. His radio show is heard every day on more than 200 radio stations throughout North America. Go to www.clarkhoward.com for more!

     

    Have you received an offer in your mailbox promising that you could save $10,000, $20,000 or even $30,000 on your mortgage by getting set up on a bi-weekly payment plan? It sounds appealing, but there's a much smarter way to approach bi-weekly payments.

    Banks team up with appointed marketing companies to send out these solicitations and to collect bi-weekly mortgage payments. Very often there's a charge of $200-$400 to set you up on a bi-weekly payment plan. The marketing company may also charge a few dollars each time you make a bi-weekly payment, which is half of your monthly payment every 2 weeks. (The bank gets a split of all profits.)

    Now, on the upside, the math behind this idea works. Pre-paying a mortgage early in a 30 or 15 year cycle pays off handsomely down the road. By paying bi-weekly, you'll make the equivalent of 26 half-payments in a year. At the end of year, the marketing company (on behalf of your bank) makes 1 additional payment toward your mortgage. So the end result is that you pay 13 months in a 12-month period.

    But there are several problems here. What if the marketing company messes up the payment, then who is delinquent? (You are.) And because the marketing company only pays out once on your behalf each year, they and the bank held some of your money all year long and get rich off the interest, instead of paying down your mortgage steadily every 2 weeks.

    So what should you do instead of letting someone else set you up on a bi-weekly payment plan? Keep making monthly mortgage payments and add one-twelfth extra in the additional principal box on your monthly coupon. For example, if your monthly payment is $1,200, pay $1,300 instead. That way you'll do for free what your bank wants to charge you for -- and you'll bring your principal down much quicker.

    In general, it is to your advantage to prepay a mortgage -- unless your interest rate is below 5% like it has been for those who refinanced in recent years. If you have a 3% or 4% mortgage, you should take your sweet time paying it off over the full term of the loan!
  • What is Escrow? Understanding the Escrow Process!

    Posted Under: Home Buying in Portland, Home Selling in Portland, Property Q&A in Portland  |  June 14, 2014 11:32 AM  |  154 views  |  1 comment

    "Don't Worry, Be Happy" - Bobby McFerrin

    An escrow is an arrangement in which a neutral third party (the escrow agent) assembles and processes many of the components of a real estate transaction, record the trisection and ultimately, disburses and distributes the funds according the buyers', seller' and lender' instructions.  Your traction is typically closed by an Escrow Officer.  People buying and selling real estate usually open an escrow for their protection and convenience.  Both the buyer and seller rely on the escrow agent to carry to their written instructions relating to the trisection and to advise them if any of their instructions are not mutually consistent or cannot be carried out.  If the instructions from all parties to an escrow are clearly drafted, the escrow officer can proceed on behalf of the buyer and seller without further consultation.  This saves much time and facilitates the closing of the transaction!!

     

    Here are the typical roles in the closing process:

    The Seller or Seller's Agent:

    Delivers a fully executed purchase sale agreement to the escrow agent.
    Executes the paperwork necessary to close the transaction
    The Buyer or Buyer's Agent:

    Deposits collected funds required to close with the escrow agent
    Approves the commitment for title insurance or other items as called for by the Purchase Sale Agreement
    Executes the paperwork and loan documents necessary to close the transaction
    The Lender:

    Deposits loan documents to be executed by the buyer
    Deposits the loan proceeds
    Directs the escrow agent of the conditions under which the loan funds may be used
    The Escrow Agent:

    Clears Title
    Obtains title insurance
    Obtains payoffs and release documents for the underlying loans on the property
    Receives funds from the buyer and/or lender
    Prepares vesting document affidavit on seller's behalf
    Prorates insurance, taxes, rents, HOA fees, etc
    Prepares a final statement (often referred to as the "HUD Statement" or "Settlement Statement") for each party, indicating amounts paid in conjunction with the closing of your transaction
    Forwards deed to the county for recording
    Once the proper documents have been recorded, the escrow agent will distribute funds to the proper parties
    In summary, escrow is ht process that assembles and processes many of the components of a real estate truncation.  The sale is officially closed when the new deed is recorded and funds are available to the seller, thus transferring ownership from the seller to the buyer.  The escrow agent is a neutral third party acting on behalf of the buyer and seller under the escrow law as set forth by the State of Oregon Real Estate Agency.
  • Have a Low Down-Payment for a new Home? Paying Mortgage Insurance vs FHA Loans!

    Posted Under: Home Buying in Portland, Financing in Portland, Property Q&A in Portland  |  May 28, 2014 6:53 PM  |  208 views  |  No comments

    Private Eyes - Hall & Oates

    FHA or Federal Housing Administration insured loans are a government program backed by taxpayers.  PMI or Private Mortgage Insurance is the private sector alternative to FHA.  Both programs make it possible for people to buy homes with less than a 20% down payment.

    If you have a credit score of 620 or above or have more than a 5% down payment, PMI generally has lower premiums than FHA.  Also, with an FHA insured loan, you must pay the upfront costs for the life of the loan.  With PMI, some forms of this loan mortgage insurance will allow the borrower to cancel future premium payments once the loan reaches 78% loan-to-value.

    PMI is just like any other type of insurance, the cost varies based on a variety of factors, such as the buyers credit score, amount of the down payment and mortgage amount (just to name a few).  FHA takes a one-price-for-all approach, which means a homebuyer who is less of a credit risk pays the same rate as a homebuyer who is a much higher credit risk.  PMI has less paperwork than FHA and you can request the insurance cancellation based on appraised value.
  • May 2014 Portland Metro Real Estate Update!!

    Posted Under: Market Conditions in Portland, Home Buying in Portland, Investment Properties in Portland  |  May 15, 2014 11:05 AM  |  289 views  |  No comments

    "In the Summertime" - Mungo Jerry

    Early summertime?  Don’t we wish!!??  But, we know that true summer doesn’t begin in Oregon until July 5th  J.  Our real estate market is anything but “wishful thinking”.  We are experiencing the usual expected “seasonal activity” with closed sales rising 15.4% over March 2014 and 0.8% over April 2013.  This makes it the best April for Portland Metro real estate since April 2007 (using our Regional Multiple Listing Service statistics, the height of our last market frenzy was March of 2007).  Our inventory is down to 2.8 months of active listings (the 2nd lowest since May of 2012; the year our market started recovery).

     

    BUYERS:  what does this mean for buyer?  Still historically low interest rates make money cheap but inventory is low, low, low!  In some areas at some price points, you can depend on multiple offers.  So, get your game on and begin the search.  Of course, getting your pre-approval is your absolute first step.  There are good reasons why. And, remember you can get help with closing costs on your loan and if you’ve faced a recent financial challenge, there is a “second chance” program!

     

    SELLERS:  what does this mean for sellers? Lack of inventory continues to make it a “seller’s market”.  However, you can’t get cocky, as it’s a fickle marketplace!  Pricing is “King”!  Overpriced homes continue to languish on the market.  The three components of selling have not changed: location, pricing and condition!!

     

    INVESTORS:  what does this mean for investors?  Again, lack of inventory is the main culprit.  It’s very competitive and getting harder and harder to find immediate cash flow.  Financing demands 20-25% down, unless you are willing to accept “hard-money”, thus a considerably higher interest rate. I still contend it’s hard to “save your way to retirement”.  Investment real estate can help!

     

    BOTTOM LINE:  what does this mean for the bottom line?  I’m personally feeling the market take a bit of a breath, but it may be that there would be more buyers if there was more “product”? The average sales price in the Portland metro area for the first 4 months of this year is up 1.7% from the same time last year.  That speaks for itself as far as affordability!  Don’t be saying “I shoulda, coulda, woulda”!

  • Appraisers: What They Do and Don't Do!

    Posted Under: Home Buying in Portland, Home Selling in Portland, Property Q&A in Portland  |  May 9, 2014 11:54 AM  |  264 views  |  No comments

    "Don't Rain on My Parade" from Glee

    Appraisals are a fact of life in a majority of real estate transactions.  They are required by the lender to substantiate the agreed upon sales price negotiated between buyer and seller!  Appraisers don't set the value of a home but their appraised value can certainly impact a transaction. Their role is to produce a credible opinion of value based on thorough and unbiased research and analyses that reflect the market value of a property, which is not always the sale price. In many cases, an appraisal may help prevent a buyer from overpaying for a home.

    *Even thought buyers may be responsible for the cost of the appraisal, appraisers are hired by the lender.

    *Appraisers provide an analysis of the collateral (the property), so that the lenders understand the value of the property when making the loan decisions.

    *The cost of various home improvements may very well add value to the home, however the value of any improvements are based on what the market is willing to pay for them and may or may not correlate to the actual cost!

    *Home inspections and home appraisals are two different things. An appraiser provides an unbiased analysis of the value of the property.  The home inspector is typically hired by the borrower and provides an analysis of the structure and systems of the house to insure the integrity of the property.  Occasionally, an appraiser will require that certain structural repairs be completed prior to close of escrow.
  • A Second Chance for Buyers Who Have Faced Financial Challenges!

    Posted Under: Home Buying in Portland, Financing in Portland  |  May 7, 2014 3:33 PM  |  259 views  |  No comments

    Shinedown - Second Chance

    During our recession, many homeowners or future buyers may have experienced a financial difficulty.  FHA (Federal Housing Administration) which does not "make" loans but "guarantees" loans has initiated a new "FHA Back to Work Program".  It's a "second chance" for mortgage applicants who have experience extenuating circumstances of financial hardship as a result of unemployment or severe reduction in income!

     

    If you've experienced any of the following financial difficulties, you may be eligible as this program reduces the agency's two-year waiting period to one year!!

    Pre-foreclosure sales
    Short sales
    Deed-in-lieu
    Foreclosure
    Chapter 7 bankruptcy
    Chapter 13 bankruptcy
    Loan modification
    Forbearance agreements
    Borrower Requirements:

    Document a 20% loss of household income
    Document a "satisfactory" crudity history since the economic event
    Must complete counseling requirement
    Must be current on the mortgage
    Minimum credit score of 580 for each borrower
    Property must be owner occupied
    So, I would speak with a trusted loan advisor and see if you qualify for a second chance.  If you're ready to "jump back on the horse (or bike, as the case may be)", this may be an opportunity
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