Personal Finances

Mortgage Market: Making Sense of Portland’s Rip-roaring Housing Market

Connections Q4 2017 Mortgage Market: Dogs running through a backyard.

This month we’ll discuss what’s happening in the rip-roaring Portland housing market, whether to buy or refinance, and why the Loan Estimate is a document homebuyers will want to watch closely.

Portland Housing Market Update

The most recent S&P CoreLogic Case-Shiller home price index, a leading measure of national housing market growth, shows that Portland home prices continued to rise faster than any other major city besides Seattle in July.

This was caused in part by the lack of housing inventory leaving buyers with few choices besides increasing their offers on homes already on the market.

That said, between July and August the median home price fell by $10,000 ($395,000 to $385,000), so we may be trending toward a more buyer-friendly market. Keep an eye out for moves from the Federal Reserve, who some expect to increase mortgage rates in the near future.

Should you buy or refinance?

In the current housing market, if you are highly motivated to buy and you have enough capital to put a healthy down payment on your house, it may be wise to get in while you can!

That said, the current high-demand / low-supply environment favors sellers, so if you’re having trouble finding a great deal on a home it may be wise to refinance.

The fall and winter season is generally a great time for families to refinance their mortgage, then use the extra savings from their lower mortgage rate to fund home improvement projects.

This gives the added bonus of increasing the home’s resale value. Many also use the money freed up by the refinance to pay down higher interest debt. This can be a great gift to your future self, lowering payments and increasing savings.

Homebuyers: What is a Loan Estimate and what does it mean to you?

The Loan Estimate is an official document a lender must provide within three business days of receiving your application. It replaced the Good Faith Estimate and, importantly, became required among all lenders in October of 2015.

Your Loan Estimate is a valuable document. It will help you forecast your home buying expenses, making it easier to budget for the big purchase.

Since all lenders have to use the same form, it will give you an “apples to apples” comparison point between different lenders to shop the best loan for you.

It will also protect you from misleading practices, as the lender must legally remain accountable for most of the figures laid out in the Loan Estimate.

Among other things, the Loan Estimate includes:

  • Your loan’s interest rate
  • Your expected monthly payment
  • An estimate of your total closing costs
  • Cost of taxes, insurance, and other features like prepayment penalties

As you go through the mortgage process, remember that all lenders are required to use the same standard Loan Estimate form.

Some lenders will provide a similar document often labeled “Fee Breakdown,” “Loan Summary,” “Transaction Summary” or something along these lines – keep in mind that this is NOT a Loan Estimate and the lender may not be legally held accountable to those documents.

What should you do when you receive a Loan Estimate?

  • Make sure all of your information is spelled correctly – this can save you time and hassle later in the process, when quick turnaround times are important
  • Ensure the Loan Amount and Estimated Monthly Payments match your expectations and your budget
  • Look out for prepayment penalties, balloon payments and other details and build those into your budget
  • Make sure you have enough cash to pay the Estimated Cash to Close!

Learn more about the mortgage market by visiting our Home Loans page or calling Unitus Mortgage at 503-423-8713.


Posted By: Jacob Schnee

About the Author: Jacob joined Unitus as Marketing Specialist in March 2015 and transitioned to Marketing Communications Specialist in March 2017. His experience has spanned hospitality, business development, consulting, and marketing in various industries along the east coast, west coast and in between. When he is not developing internal and external communications for Unitus, he is engaging in recreational fitness, studying personality types and exploring the outdoors with his wife and dog.

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