Portland Mortgage Podcast with Joe Dimeo

I saw an Instagram meme the other day that said, “My wife is a stay-at-home astronaut, and I breed salamanders. Our budget is $3 million.” This, of course, was referring to the “House Hunters” series on HGTV. Unfortunately, though, this is a situation many people actually have to face. Everyone wants the house on a hill that comes with a pool, is located in the perfect school district, and sits within walking distance of their favorite coffee shop. The problem is that money talks, and if you’re not in the price bracket that allows you to buy a home with these features, you’ll have to make sacrifices to get the home that’s best-suited for you. This is why it’s important to set realistic expectations and know your budget when buying a home. A great rule of thumb is to pick your absolute “must-have” features, and for every $100,000 you’re willing to spend, add one of them.  “What you sacrifice today may help you gain something you want in the future.” Maybe the home you buy today isn’t the one you’ll end up in for the rest of your life, but if you buy and sell it the right way, it may lead you to your dream home someday. Don’t be discouraged by the fact that you can’t get everything you want right away. Set realistic expectations and make sure you don’t end up “house poor” (i.e., spending every penny you have just to cover your house payments).  Remember—what you sacrifice today may help you gain something you want in the future. If you need help setting realistic expectations and planning your budget for your home purchase so that you get the home you need, don’t hesitate to reach out to me. I’d be happy to refer you to a great real estate agent who can help you.    

When you hear the term “debt ratio,” you probably are a little unclear as to what this means. If that’s the case, don’t worry. Today, I’ll explain what you need to know about this common real estate term. Essentially, there are two types of debt ratio: front-end debt ratios and back-end debt ratios. Your front-end debt ratio is the amount you spend on housing compared to how much you make each month. Your back-end debt ratio is how much you make each month compared to how much your total debt is, including your mortgage. Keeping both of these ratios steady while you’re in the process of buying a home is important, but having too high a ratio could prevent you from getting approved for a loan at all. Ultimately, it’s important to have a discussion with your lender about your circumstances to better understand how these ratios will impact your goals. If you have any other questions or would like more information, feel free to give me a call or send me an email. I look forward to hearing from you soon.

Have you ever seen the Tom Hanks movie, “The Money Pit?” If so, keep it in mind if you’re thinking about buying a fixer-upper. If you’re buying one of these kinds of properties, you need to understand that you’re starting to undertake a full-time second job. It depends on the extent, but you’re going to be living in a construction site. It’s a great way to build equity or make some money, but there’s no such thing as easy money.  If this sounds like something you could handle, but you don’t want to live with the constant construction, I have great news. There’s a program out there called the 203(k) rehab loan. It allows you to find that perfect fixer-upper, make the updates and improvements before you move in, and move into a fully remodeled home.  “I know some of the best contractors in Oregon from my time in construction.” There are a lot of steps to it, but it can totally get done. I used to be a construction contractor so I’ve got a list of some of the best contractors in Oregon if you need it. If you’re interested in remodeling your new home just the way you want to without living in a construction zone, visit us online at joedimeoloans.com or loansforpets.com. If you have any other questions for me in the meantime, don’t hesitate to give me a call or send me an email. I look forward to hearing from you soon.

  Whenever you hear about mortgages or homeownership, equity is a central part of that conversation. It’s important to understand this term if you plan to buy a home at some point in the future, so there’s no shame in asking, “What is home equity?”  Essentially, equity is the difference between what you owe and what the property is valued at. We’ll discuss how property is assigned value at another time. Essentially, though, equity is the money left over after any underlying liens are satisfied on your home. “As you approach the end of that 30-year period, you’ll almost entirely be paying toward the principal and in the meanwhile building equity.” The best part? It’s yours to keep! But how can you earn it more quickly? Well, you’ll first need to understand the repayment structure of your loan. In other words, when you look at the entire timeline of a 30-year loan, realize that the first few years will be spent largely paying down your interest, with a small portion going toward the principal balance.  Then, at the halfway point, the ratio becomes 50/50—50% principal and 50% interest. As you approach the end of that 30-year period, you’ll almost entirely be paying toward the principal and building equity in the meantime. Now, you do have options for adjusting the amount of interest you’re paying at a given point, but we’ll get to that in a later video.  If you have questions or you’re interested in building home equity at a faster rate, please call me at 720-775-7594, email me at [email protected], or you can go to JoeDimeoLoans.com or LoansForPets.com. I look forward to speaking with you! 

Today we’re talking about all things short sales. If you don’t know already, a short sale occurs when a bank or other financial institution decides to let go of an asset (in this case, a home) for less than they owe on that property. When the crash happened in 2008, banks decided to do a lot of short sales to get all of the losses off their balance sheet. What do short sales mean for homebuyers? It means that you have to get the bank’s approval to get the property bought. It also means that you’ll be able to buy a home for less than the bank paid for it.  “You can get a great deal, but you’ll need the right agent to make it happen.” If you want to buy a home through a short sale, here’s how the process works. You submit your offer to a bank, they set you up with an underwriter, and the bank will determine how much of a loss they’re willing to take on the property. You can get a great deal on one of these homes, but you need to have the right agent who can help you navigate these situations and get your offer accepted. I’d be happy to recommend an agent to you. If you need that recommendation or have any other questions about buying a home, don’t hesitate to give me a call or send me an email. I look forward to hearing from you soon. 

For homebuyers, one of the common questions we hear is, “How do I make my offer stand out?” Your real estate agent is a good place to start. You hired them for a reason, and that reason should be to get you the best property for the best price. If you need a referral, please let me know because I know some great agents. “I always suggest starting with the seller’s motivation.” As for my advice, I always suggest starting with the seller’s motivation. A handwritten letter makes you look desperate and overly emotional in my opinion. If you understand the seller’s motivation, you can craft your offer to fit their needs. You don’t have to come in with a high price, but you can offer a quick close or waive a contingency or two. This will help everyone feel like they left the transaction a winner.  So if you do need any recommendations for real estate agents or you have any questions regarding real estate or mortgages in the meantime, don’t hesitate to give me a call or send me an email. I look forward to hearing from you soon.

You’re invited to our upcoming “Yappy” Hour event! That’s right, bring your loved ones and your pups along for a great time at our office “700 SW 5th Avenue Portland, OR  97204” on August 15 at 4:30 p.m. It’s going to be a fantastic chance to mix and mingle, so we hope you’ll drop by to enjoy a free cocktail, get your furry friend a complimentary puppy pedicure, and chat with other local dog lovers. If you have any other questions or would like more information, feel free to give us a call or send us an email. We look forward to seeing you on August 15. 

People often ask me whether it’s a good idea to refinance their home. In answer, I ask them three questions: Has the market improved? If the market in your area has gone up significantly over the last couple of years, meaning that money is actually cheaper, then you can absolutely refinance your home, potentially pull equity from it, and lower your payments. “There’s no reason to pay more in interest than is necessary.” Have you done substantial improvements to the home? If, for example, you added some decks or really nice landscaping to your property, the value of your home will increase, potentially leading to a higher appraisal and loan-to-value ratio. Many good things can happen when it shows good ownership of a home and improvements in the value of the asset the bank has lent on because that’s ultimately what the banks are after. Someone who shows that they can make a home better after living in it and makes their payments on time is a less risky person to loan to. Has your credit improved? If you borrowed money when you had a credit score of 550 and you’re now at a 750, you represent less of a risk to the bank. There’s no reason to pay more in interest than is necessary. Do you want to stop wasting money on interest and find out what risk you represent to the bank? If so, then reach out to me. We can help you make sure that you’re not overpaying.