Multnomah Mortgage Rates

Mortgages in Multnomah County

When a bank is deciding whether or not to extend you a loan offer, they look at the three C’s of mortgage approval: collateral, credit reputation, and capacity. Collateral refers to the home you are purchasing. Before a bank approves a mortgage, they need to be sure that the home you are buying is worth what they are putting into it. This is determined by a professional appraisal and the amount that you decide you are putting down. The credit reputation portion of a loan decision is solely based on your credit report. To improve your standing in this portion of the mortgage verdict you can do a little work on your credit score. Pay off all the smaller debts you can to lower your outstanding debt, which negatively affects your score. You should also be sure you are up-to-date on all of your accounts and have had no late payments within the last year.

Capacity is the last factor that institutions look at when determining whether or not you can pay for the mortgage you want. Capacity refers to your income, your debt-to-income ratio, and your savings. The lender often confirms your employment and income with pay stubs, a W-2, and sometimes even a call to your employer. Your debt-to-income ratio is your total monthly obligations divided by your gross monthly income. Each lender has a percentage that they will allow in order for you to qualify. Be sure you are not overextended before you even walk into the mortgage application process. The bank may also ask about the balance in your bank accounts, savings, or any brokerage accounts you may have. This helps them determine your capacity to be able to pay your mortgage should anything unforeseen happen to you in the future.

Multnomah County Home Equity Loans

Once you decide a home equity loan is the right choice for you, there is one more decision yet to make. There are generally two different types of home equity loans: a home equity term loan and a home equity line of credit. A term loan is a single lump sum loan with a fixed term and payment. A home equity line of credit (HELOC) is a revolving line of credit backed by the equity in your home. A HELOC works similar to a credit card in that you only pay interest on what you take out. This type of loan, although the interest rate is variable, is a good option if you are not sure how much money you will need or if you will need the money over a longer period of time.

Multnomah County Loan Modifications

Some homeowners think that they have to wait until they are way behind on their mortgage to ask for a modification. Federal regulations about loan modifications offer lenders incentives to reach out to consumers that are not yet in default but in danger of becoming delinquent. Before you get yourself in over your head, you need to send a letter of hardship to your lender. A hardship includes anything like a divorce, death of a significant other or co-owner, job relocation, or job loss. If any of these events happen to you, it is important to anticipate your inability to pay your mortgage and deal with the problem before you find yourself in foreclosure.