How A Home Warranty Will Benefit You

If you’re buying a home, I highly recommend you get a home warranty. There are many benefits in doing so.

If you’re buying a home, should you get a home warranty? Oftentimes during a home sale, it’s natural for buyers to ask themselves this question and wonder whether they really need it. There are a few things you should know about what home warranties can do for you.  

When buying a new construction home, it automatically comes with a 12-month warranty for all the major systems and components. When buying a home that’s not new construction, the day you close, you’ll be responsible for any issues that come up. Typically, these issues come up pretty quickly during that first year of ownership.

A home warranty covers all the major systems in the home, and Home Warranty of America even offers roof leak repair, which can come in handy for us central Oregon residents who just endured a winter that featured a lot of snow and ice dams.

The cost of a home warranty ranges from $370 to $500, and that sum can be included in your overall closing costs. The $500 plan covers everything and gives you additional coverage if items need to be replaced, whereas the $370 plan only covers the major systems.

When I’m working with a buyer, I always include the home warranty when I write up the offer and ask the seller to pay for it as part of the transaction. Roughly 75% of the time, sellers don’t mind doing this, and they’re happy to build confidence in the home they’re selling. If you work with our team, we always include this in the offer. If you’re working with another Realtor, ask them to ask the seller to pay for it.

When I’m working with a buyer, I always include the home warranty when I write up the offer.

If the seller doesn’t agree to pay for it, I highly recommend you at least get the minimum plan or find out about getting more coverage. I have a home warranty on my home that I renew every year. When living within a budget, you never know what can happen or what systems might fail that could cost you thousands of dollars.

One of the more common items new homeowners have issues with is water heaters. Sometimes buyers who buy their homes in the summer and turn on their furnace for the first time in fall find out that it’s not working. This happens because when the inspector turned on the furnace during the home inspection, they only did so for five or 10 minutes, which isn’t long enough to pick up on any potential problems. The same potential problem applies to AC units for buyers who buy during the winter.

The systems in the home that don’t get used are the ones that might get rusty or break down faster, and there are differences in usage patterns from one homeowner to another. If you have large family moving into a home where a smaller family lived, you’ll get more wear and tear in a home, and that’s why you see breakdowns happen almost immediately after the family moves in.

All of this is why we encourage all of our buyers to get a home warranty when purchasing a home. Hopefully the seller will pay for it, but if they don’t, you can get it incorporated into your closing costs through your loan.

If you have any questions, I’ve included a brochure in this blog which talks about the main things a home warranty covers. As always, if you have any other questions or you need to buy or sell a home in our central Oregon market, don’t hesitate to reach out to me anytime. I’d be happy to help you.

How to Purchase and Finance a Rental Property

Rental rates in the central Oregon market make buying an investment rental property tempting for many homeowners right now. How does that financing work, though?

Have you ever considered buying a rental or investment property? It's a great way to diversify your real estate portfolio. The two ways to do this are converting your home into a rental or pulling some equity out of it to finance a new property that you'll then rent out. Home values have gone up all over central Oregon, giving many homeowners significant equity in their property. To help me explain this topic, I've invited in Matt Bassitt from Northwestern Home Loans.

If you want to pull equity from your home to take advantage of the great rental market we have, there are different lending options. You typically want to have 20% or more equity put down when buying a rental property to avoid having to pay mortgage insurance, but some rental properties are profitable enough to offset this. You can also refinance your mortgage and convert your current home into the rental to buy a larger new home, for example. Whether you convert your current home or buy a new one can affect financing rates in this case.

The central Oregon rental market makes now a great time to invest in property.

Since the mortgage rates you get will be better on your primary residence, you can also refinance your mortgage and stay in the home as your primary residence if you can keep your mortgage loan-to-value ratio below that 80% mark. Then, you can use the equity you've pulled to buy a rental property with 20% to 25% down. Since rates can be 0.5% to 1% higher on a 30-year investment property loan, it can be a smart strategy to pull equity to buy your new residence, get the best possible rate, and then keep your old residence as a rental property. 

With this route, there's an intent clause (in basically every loan type) you'll have to sign at closing stating you intend to occupy the house as your primary residence for the next 12 months. So there's basically no way to sneak this past your lender when it comes to investment property. 

You can, however, refinance your loan and make a purchase simultaneously. It's common for purchases to be treated with a priority for refinances, which have a three-day decision period unless the property in question is an investment property already. 

As you've probably noticed, this process is pretty technical and complicated. If you have any questions about it on the lending side, you can reach Matt Bassitt at 541-323-7000 ext. 202.

If you have any questions for me about rental property or about real estate in general here in central Oregon, don't hesitate to give me a call or send me an email soon. I'd love to hear from you!

Buying a Home After You’ve Had a Short Sale or Foreclosure

If you’ve had a short sale or foreclosure in the past, there are a few things I want to share with you that you should know if you want to buy a home again.

If you’ve had a short sale or a foreclosure in the past, how long do you have to wait to buy a home again and what do you need to do to prepare yourself for that process? 

From 2009 to 2013, I worked with many people who had the unfortunate experience of having to do a short sale or a foreclosure during that downturn in the economy. Since then, we’ve seen a complete turnaround with housing values here in central Oregon, so many people are asking me that same question. I’ve brought in Matt Bassitt, owner of northwestern Home Loans, to help me answer it. 

There are many different rules and regulations between each loan program, but for the most part, three years is the standard waiting period. If you’re a veteran and you used a VA loan, it might only be a two-year wait. According to Matt, most people in this category have already met the time requirements.

You should submit a loan application and start preparing for homeownership six to 12 months prior to when you think your deadline is. Sometimes the dates recorded in your credit profile aren’t accurate, so that will give you time to work that and other things with your loan officer to improve your credit.

There is a lot of strategy that goes into setting yourself up to buy your next home.

There is a lot of strategy that goes into setting yourself up to buy your next home. I’ve noticed many people who’ve gone through a short sale or foreclosure stop using credit altogether, which is a mistake because that means their credit score and credit history haven’t rebuilt. 

There are some fantastic financing options that involve putting down as little as 0%. If you’re getting a tax refund or you’ve been saving up, for example, you can employ that as part of your strategy to buy a great home, secure a great interest rate, and rebuild your credit. 

If you would like more information from Matt, you can give him a call at (541) 323-7000 ext. 202. If you have any questions for me about this topic, feel free to give me a call or send me an email. I’d be glad to assist you.

The Truth About Using a First Time Homebuyers Loan, Again!

There’s nothing stopping you from reusing a home loan to buy another home, but there are some stipulations that you need to be aware of.

Did you know that if you’ve ever used an FHA loan, a VA loan, or a USDA loan to buy a home, you’re free to reuse those loans if you’re currently renting and want to become a homeowner again?

Today I’m joined by Matt Bassitt from Northwestern Home Loans to explain the stipulations of reusing home loans. According to him, this situation happens all the time. 

The VA loan in particular gets misconceived most often as a one-and-done type of deal, but there is no limit to how often you can use it if you’re a veteran of the armed forces. You don’t even technically need to use one VA loan at a time, either. If you’re using a VA loan for a house you’ve turned into an investment property and you want to buy a new property, you can qualify for a new VA loan. However, because some of your eligibility is being used on that first property, you may have to put a down payment on the next one. 

There’s nothing stopping you from reusing a home loan.

FHA loans are slightly different in that you can’t use more than one of them at a time. They’re designed for first-time homebuyers, but they’re not exclusive to them. With these loans, you’re allowed to use a different type of loan at the same time. For example, you can use a conventional loan to buy an investment property if you’re using the FHA loan to buy your primary residence. 

USDA loans are similar to FHA loans in that you can’t use more than one of them at a time, but with these you aren’t allowed to use different types of loans at the same time. The one thing all three of these loans have in common is you must use them for a primary residence. 

If you have any questions about these loans or you’re confused about whether you’d be able to qualify for one, you can reach Matt at 541-323-7000 ext. 202.

If you have any other questions, feel free to give me a call or shoot me an email. I’d love to hear from you!

How Long Will It Take to Sell a Home in Central Oregon?

Today I want to go over how long it takes to sell a home in central Oregon.

How long does it really take to close on a home after putting it on the market?

The average timeline in central Oregon is 90 days, or, 45 days from the time that you accept an offer to the time that you close.

The timeline will vary depending on the type of property being sold. 

However, it will vary depending on the type of property that you are selling. I do see longer timelines for high priced properties, acreage properties, specialty properties that are located in resort communities, or vacation rental properties.

If you would like to know the timeline for buying or selling a home in a certain area, please feel free to give me a call or send me an email. I look forward to hearing from you!

Spend Your Tax Refund on a New Home

Today I’m joined by Matt Bassett with Northwestern Home Loans to talk to you about the possibility of using your tax refund to purchase a home. 

It’s tax season in central Oregon and if you’re lucky you’ll get a great big tax refund. Can you use that as a down payment to purchase a home? Of course! 

There are several great loan options for first-time homebuyers, some of which don’t even require a down payment. Your tax refund can then be used to lower your principal payment by putting extra down or to cover closing costs.

We have a lot of no money down or low money down options that you can take advantage of with your tax refund. 

Meet with a mortgage broker as soon as you know how much you’re getting back.

The best time to meet with a mortgage broker in order to come up with a game plan is as soon as you know how much you’re getting back. It’s always best to plan ahead and meeting with a lender early on will give you a huge advantage when you meet with a real estate agent and start looking at homes. 

If you’re looking to buy a home and stop renting, you’ll want meet with a mortgage broker before looking at homes so you know exactly what you can afford and what sort of realistic time frame you need to make a purchase. You don’t want to fall in love with a home and make an offer without knowing what your options are or where you truly stand financially. 

I highly encourage anyone getting a tax refund to meet with Matt or a local mortgage broker as early as possible. Using that refund to help fund a home purchase will benefit you way more than taking a vacation or shopping. 

Also, a great tip to remember is to never make a big purchase when you are thinking of buying a house. You don’t want anything to slow down or get in the way of a mortgage loan going through, so wait to make those purchases until after you’ve bought a home. 

If you have any further questions for Matt, you can reach him at (541) 323-7000. 

If have any questions for me about using your tax refund to purchase a home, or if you have any other questions about real estate, feel free to give me a call or send me an email. I look forward to hearing from you!