The FHA just increased their loan limits.  This means that buyers will be able to qualify for higher-priced homes with as little as 3% down payment.  The new loan limit for the Portland Metro area, including Multnomah, Clackamas and Washington Counties is $418,750.

Please let me know if I can assist you with your purchase!  I look forward to working with you soon.  You can reach me at phyllis@pointclickandpack.com or 503-421-2407.

First, let’s start with some specific definitions of the rates that were lowered by .50% this week:

Federal Funds Rate

The interest rate at which a depository institution lends immediately available funds (balances at the Federal Reserve) to another depository institution overnight.

This is what news reports are referring to when they talk about the Fed changing interest rates. In fact, the FOMC sets a target for this rate, but not the actual rate itself (because it is determined by the open market).

Discount Rate

The interest rate that an eligible depository institution is charged to borrow short-term funds directly from a Federal Reserve Bank.
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This type of borrowing from the Fed is fairly limited. Institutions will often seek other means of meeting short-term liquidity needs. The Federal funds discount rate is one of two interest rates the Fed sets, the other being the overnight lending rate, or the Fed funds rate.

As you can see by these definitions, neither the Federal Fund Rate nor the Discount Rate has any direct reflection on mortgage rates and no one should believe fixed mortgage rates will go down as a direct result of the Federal Reserve’s actions.  A “ripple” effect will be that the Prime Rate will go down by .50% to 7.75%.  Again we need a specific definition -

Prime Rate

The interest rate that commercial banks charge their most credit-worthy customers. Generally a bank’s best customers consist of large corporations.

Default risk is the main determiner of the interest rate a bank will charge a borrower. Because a bank’s best customers have little chance of defaulting, the bank can charge them a rate that is lower than the rate that would be charged to a customer who has a higher likelihood of defaulting on a loan.

Many banks tie their Home Equity Loan products to the Prime Rate.  If that is the case with your home equity loan, you could get a pleasant surprise when your next monthly statement arrives at your house.  Additionally, many revolving credit cards are tied to the Prime Rate and they, too, will benefit from the Federal Reserve’s action.  In the end, almost all mortgage banking firms price their long term (15-30 year) fixed rate products based on the activity in the Treasury Bond Market, but that lesson will have to follow on another day!.

Bottom Line – Don’t expect any reduction to 30-yr fixed rates as a result of this week’s Federal Reserve activity.  In reality there’s been a slight rate increase since Tuesday, but when 30-yr fixed rates are in the low 6% range, how can anyone be unhappy??

I’ll be available all weekend so don’t hesitate to call – 503/970-9714

Bob Milano
Branch Manager/Sr. Mortgage Banker
Directors Mortgage Inc.
4550 SW Kruse Way, Suite 340
Lake Oswego, OR 97035
Phone:  503.636.6000  Ext. 165
Fax:  971.327.2898   Cell: 503.970.9714      
E-mail:  bmilano@directorsmortgage.net
Website:  www.homeloansbybob.com

Buyer’s are still getting the pick of the litter with current inventory levels so high in Metro Portland and the surrounding suburbs.  Increasing interest rates, a large housing availability, and fewer numbers of buyers and investors entering the market, are all factors which have been at work to fuel this slow market time.

In addition, continuous media banter about housing bubbles bursting and the real estate slump in many metropolitan areas, has nervous buyers on edge and has deterred some from buying now.  It should be noted that CNN recently reported that Portland, OR is NOT experiencing the bursting housing bubble that supposedly exists in the major east coast and midwest markets.  In fact, even though housing prices have gone down, overall housing prices have continued to appreciate in the Metro Portland area, just at a lower rate than sellers have become accustomed to.

If you are thinking about buying a home or investment property, now would be the perfect time to do so.  Although interest rates continue to rise, on a relative historical basis, they are still low - hovering just under 6% for a 30 year fixed loan.  In addition, the longer market times are forcing motivated sellers to drop their list prices to try to get a faster offer.

I would love to assist you with your Portland purchase.  Please contact me today at phyllis@pointclickandpack.com or at 503-421-2407.

Low interest rates and higher inventories of homes for sale have turned many locales into buyer’s markets. But rather than rush into the complex process alone, house-hunters should consider hiring their own agent. Buyers should take the time to find a Realtor who will provide them with the level of representation they desire.

I am an Accredited Buyer’s Representative and am a member of the Real Estate Buyers Agent Council, (REBAC). As such, I have extensive training and education when working with buyers and provide a professional level of service and expertise in the market. This training also assists me when working with sellers, as I understand what other buyer’s agents look for when showing homes to their clients and can help you prepare your home so that it shows in its best light. I look forward to working with you and serving your Portland real estate needs!

Buyers Agent

As an Accredited Buyer’s Representative, what I offer my clients is unique. I not only facilitate a transaction, but I also provide personalized service. As your Buyer’s Agent, you will receive the following benefits:

• I show absolute loyalty to my customers, am a good listener, and will work to meet your individual needs.
• I’ll provide you with instant details about the most recent homes for sale. I have access to all homes for sale daily, and will provide them to you via e-mail, fax or phone. In addition, I check my e-mail about 4 times a day and return correspondence within 24 hours.
• I will represent your interests in the best possible light to other Realtors and Sellers when presenting your offers and will work hard to give you an edge at the bargaining table.
• I’ll provide you with names and phone numbers of inspectors, lending officers, and other professionals in the industry who have gained my trust.
• I offer a Handy Andy service to take care of those minor issues that arise just after you move in.
• You’ll always have my full attention!

Sellers Agent

My objectives are to communicate the results of my activities on a weekly basis to you, assist you in getting the highest possible dollar value for your property (in the least amount of time and with the least amount of inconvenience to you), and get as many qualified buyers as possible into your home until it is sold.

Prepare Your Home For Sale
I will spend as much time as needed to go over the entire property with you, both inside and outside. I will make a list with you of suggestions and recommendations about your home so it will show at its very best during its time on the market.

The Multiple Listing Service
I will professionally represent your home to the Multiple Listing Association exposing your home to every agent in the area.

Follow Up
Throughout the duration of your listing, I will follow up with Realtors from the Multiple Listing Service that have shown your home to get their client’s responses and comments.

Direct Marketing
I will professionally create and produce flyers for your home to be placed in the flyer box on the yard sign. In addition, I will mail postcards to the surrounding neighborhoods promoting your home.

Internet Web Sites
I will continuously advertise your home on the RMLS web site with a property description, photograph and school district information. I will e-mail and fax photos and a detailed description of your home to select agents. Your home will be marketed on the #1 most visited web site by Buyers, Realtor.com, as well as on my personal web site, www.pghazi.com.

Broker’s Open Houses
I will hold open houses for the real estate agents in the Multiple Listing Association on a regular basis until the property is sold. Broker’s open houses are held every Tuesday.

Open Houses
I will hold public open houses whenever possible.

Advertising
On open house weekends, I will advertise your home in The Oregonian Sunday Real Estate Section.

My Communication With You
I will keep in touch with you at least once a week as my work progresses either verbally or via e-mail.

Offers
I will represent you upon the presentation of all contracts to help in negotiating the best possible price and terms for you.

Escrow and Closing
I will handle all follow-up and keep you informed on all mortgage, title, and other closing procedures.

This marketing program is my commitment to you! It is my goal to provide you the latest in marketing and customer service. I will work hard to represent you in the prompt sale of your home at the best possible price. Since I build my business on referrals from satisfied clients, the highest compliment you can pay me is to refer me to all of your friends and family for all of their real estate needs. I look forward to serving you!

What’s the difference between a Listing and Buyer’s Agent?

The Listing Agent represents the Seller’s best interest and is responsible for creating the activity necessary to obtain the best price, in the shortest period of time, with the least inconvenience to the Seller. The Buyer’s Agent represents the Buyer’s best interests and is responsible for making the Buyer aware of all listed properties that meet their criteria, getting their Buyer pre-approved for financing, and educating them on property values.

Should I work with more than one Buyer’s Agent?

No. In our area all real estate professionals are members of the multiple listing association and have access to the same properties for sale. Commit to one agent and expect superior dedicated service.

Who pays the commission and how much is it?

The commission is paid by the Seller and is based on the sale price of the listed home.

What is the MLS?

The Multiple Listing Service is an association to which property listings are submitted. Almost all real estate companies belong and share their listings. The MLS is the main database to obtain information and all members have equal opportunity to sell the properties listed.

What is earnest money?

Earnest money is a good faith deposit a Buyer makes when they make an offer to purchase a home. The earnest money is usually applied to the down payment and/or closing costs of the Buyer. However, if the Buyer breaks the terms of the contract by misrepresenting their financial status, failing to provide earnest money when due, or by failing to complete the transaction in accordance with contract, the earnest money can be lost to the seller. The earnest money is refunded to the Buyer if the seller does not accept the Buyer’s offer, the Seller cannot provide marketable title, the Seller fails to complete the transaction in accordance with the contract, or the Seller fails to complete any condition which the Buyer has made an express contingency in the agreement.

Do I need to have the home I want to buy inspected?

Yes. Even if the home appears to be in perfect condition, it is recommended that the Buyer hire an inspector to evaluate the condition of the property. The inspector will thoroughly examine the property and issue a detailed report. I provide a list of suggested inspectors to my clients as well as more detailed information about the inspection process.

What is an appraisal?

An appraisal verifies the value of the property by looking at other recent sales in the area. It is performed by a licensed appraiser who is selected by the Buyer’s bank or lender. An appraisal is primarily done to assure the lender that they are not loaning more money than the house is worth.

What is title?

A title search is done before a home sale can be completed. A title search ensures that the Buyer is getting all the rights to the property (title) that he or she is paying for. The title company insures there are no recorded liens against the property that will affect the marketability of the title.

What is escrow?

Escrow is the independent, impartial party who prepares and records closing documents according to the terms of the Earnest Money Agreement. The escrow company obtains all necessary documentation to clear title to the property and collects all required funds from the appropriate parties.

What is closing?

Closing is the point in time when the title is transferred and recorded with the County. It is also when the Seller is paid. It may or may not be the date the Buyer takes possession. Closing and possession are often different. Also note that closing is not the same as signing!