I've been in this business for +20 years and I've seen these ups and downs before. (I'm old enough to have been through the Savings and Loan crisis!) Is this a good time to buy? Well, it is certainly time to be actively looking! It is just the way the market works: someone's loss can be your gain. There are still good deals out there and I can help with the financing.
The hottest thing right now is the Portland Development Commission's (PDC) "Mortgage Credit Certificate" (MCC) and the "Ownership Through Partnership Loan" (OTP). I am approved to offer both programs. Contact me for more information and a free personalized analysis of how these programs can help you.
The Oregon Bond is usually where people start because of the discounted interest rate. But, I've found that the PDC's MCC creates a lower payment than the Oegon Bond! Here is an example:
|
SALE AND FIRST MORTGAGE LOAN |
Oregon Bond |
Traditional Loan |
MCC |
|
|
7 |
Sales Price |
$180,000 |
$180,000 |
$180,000 |
|
8 |
Second Mortgage used for Purchase |
0 |
0 |
0 |
|
9 |
Borrower Down Payment |
5,400 |
5,400 |
5,400 |
|
10 |
First Mortgage Loan Amount |
$174,600 |
$174,600 |
$174,600 |
|
11 |
First Mortgage Note Rate |
5.750% |
6.250% |
6.250% |
|
12 |
Mortgage Insurance Premium Rate |
0.500% |
0.500% |
0.500% |
|
13 |
Loan Term (years) |
30 |
30 |
30 |
|
14 |
Annual Interest (1st year) |
$10,040 |
$10,913 |
$10,913 |
|
15 |
MCC Credit (20% of 1st Year interest) |
$0 |
$0 |
$2,183 |
You receive a dollar-for-dollar tax credit! Take a look at how that affects your "Net Monthly Payment."
|
MONTHLY PAYMENT COMPARISON |
Oregon Bond |
Traditional Loan |
MCC |
|
|
21 |
First Mortgage Principal and Interest |
$1,029 |
$1,085 |
$1,085 |
|
22 |
Second Mortgage Principal and Interest |
0 |
0 |
0 |
|
23 |
Estimated Monthly Property Taxes |
158 |
158 |
158 |
|
24 |
Estimated Monthly Hazard Insurance |
44 |
44 |
44 |
|
25 |
Estimated Monthly Mortgage Insurance |
73 |
73 |
73 |
|
26 |
Homeowners Association Dues |
0 |
0 |
0 |
|
27 |
Total Monthly Mortgage Payment |
$1,303 |
$1,359 |
$1,359 |
|
28 |
Effective Monthly MCC Tax Credit |
0 |
0 |
(182) |
|
29 |
Net Effective Monthly Payment |
$1,303 |
$1,359 |
$1,177 |
The MCC is also less expensive to close than the Oregon Bond. We can structure a loan without the 1.75% Oregon Bond fee. (This is very important in the world of "short sales" because the short sale lender will not pay closing costs for you.)
|
LOAN FEES |
Oregon Bond |
Traditional Loan |
MCC |
|
|
33 |
Loan Origination Fee (% of loan amount) |
1.750% |
0.000% |
0.000% |
|
34 |
Loan Origination Fee ($ amount) |
$3,056 |
$0 |
$0 |
|
35 |
Other Prepaid Finance Charges |
1,560 |
912 |
1,262 |
|
36 |
Reserves Deposited with Lender |
0 |
0 |
0 |
|
37 |
3rd Party Fees |
754 |
754 |
754 |
|
38 |
Second Mortgage Loan Fees |
0 |
0 |
0 |
|
39 |
Total Loan Fees |
$5,370 |
$1,666 |
$2,016 |
|
40 |
Down Payment from borrowers own funds |
5,400 |
5,400 |
5,400 |
|
41 |
Total Estimated Cost to Close |
$10,770 |
$7,066 |
$7,416 |
Contact me for more information...John
ActiveRain Corp. is not responsible for the accuracy of the site's content (which is written by members of the ActiveRain Real Estate Network) and does not endorse the views of the real estate agents, mortgage brokers, and others listed here.
Powered by the ActiveRain Real Estate Network
© 2012 ActiveRain Corp. All Rights Reserved
