What Credit Score Do You Need for a Mortgage?

Navigating Your Credit Score

According to data from the most recent Origination Insight Report by Ellie Mae, the average FICO® score on closed loans reached 753 in February. As lending standards have tightened recently, many are concerned over whether or not their credit score is strong enough to qualify for a mortgage. While stricter lending standards could be a challenge for some, many buyers may be surprised by the options that are still available for borrowers with lower credit scores.

What Credit Score Do You Need for a Mortgage? | MyKCM

The fact that the average American has seen their credit score go up in recent years is a great sign of financial health. As someone’s score rises, they’re building toward a stronger financial future. As more Americans with strong credit enter the housing market, we see a natural increase in the FICO® score distribution of closed loans, as shown in the graph below:If your credit score is below 750, it’s easy to see this data and fear that you may not be able to qualify for a mortgage. However, that’s not always the case. While the majority of borrowers right now do have a score above 750, there’s more to qualifying for a mortgage than just the credit score, and there are still options that allow people with lower credit scores to buy their dream home. Here’s what Experian, a global leader in consumer and business credit reporting, says:

  • Federal Housing Administration (FHA) loans: “With a 3.5% down payment, homebuyers may be able to get an FHA loan with a 580 credit score or higher. If you can manage a 10% down payment, though, that minimum goes as low as 500.”
  • Conventional loans: “The most popular loan type typically comes with a 620 minimum credit score.”
  • S. Department of Agriculture (USDA) loans: “In general, lenders require a minimum credit score of 640 for a USDA loan, though some may go as low as 580.”
  • S. Department of Veterans Affairs (VA) loans: VA loans don’t technically have a minimum credit score, but lenders will typically require between 580 and 620.”

There’s no doubt a higher credit score will give you more options and better terms when applying for a mortgage, especially when lending is tight like it is right now. When planning to buy a home, speaking to an expert about steps you can take to improve your credit score is essential so you’re in the best position possible. However, don’t rule yourself out if your score is less than perfect – today’s market is still full of opportunity.

Bottom Line

Don’t let assumptions about whether your credit score is strong enough put a premature end to your homeownership goals. Let’s connect today to discuss the options that are best for you.

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Real Estate and our Economic Well Being

What Is the Strongest Tailwind to Today’s Recovering Economy?

What Is the Strongest Tailwind to Today’s Recovering Economy? | MyKCM
Real estate is the foundation of wealth

Real Estate and our Economic Well Being. Last year started off with a bang. Unemployment was under 4%, forecasters were giddy with their projections for the economy, and the residential housing market had the strongest January and February activity in over a decade.

Then came the announcement on March 11, 2020, from the World Health Organization declaring COVID-19 a worldwide pandemic. Two days later, the White House declared it a national emergency. Businesses and schools were forced to close, shelter-in-place mandates were enacted, and the economy came to a screeching halt. As a result, unemployment in this country skyrocketed to 14.9%.

A year later, the economy is recovering, and the U.S. has regained more than half of the jobs that were originally lost. However, some businesses are still closed, and many schools are still struggling to reopen. Despite the past and current challenges, there is one industry that’s proven to be a tailwind helping to counter all of these headwinds to our economy. That industry is housing. Remarkably, the residential real estate market (including existing homes and new construction) has flourished over the last twelve months. Sales are up, prices are appreciating, and more new homes are being built. The housing market has been a pillar of strength in an otherwise slowly recovering economy.

How does the real estate market help the economy?

At the beginning of the pandemic, the National Association of Realtors (NAR) released a report that explained:

“Real estate has been, and remains, the foundation of wealth building for the middle class and a critical link in the flow of goods, services, and income for millions of Americans. Accounting for nearly 18% of the GDP, real estate is clearly a major driver of the U.S. economy.”

The report calculated the total economic impact of real estate-related industries on the economy as well as the expenditures that resulted from a single home sale. At a national level, their research revealed that a single newly constructed home had an economic impact of $88,416.

What Is the Strongest Tailwind to Today’s Recovering Economy? | MyKCM
Here’s how it breaks down:The map below shows the impact by state:The impact of an existing home sale is approximately $40,000.
What Is the Strongest Tailwind to Today’s Recovering Economy? | MyKCM

Real estate has done more for our economic well being than virtually any other industry over the last year. It’s been a beacon of light during a very challenging time in our nation’s history.

Need more information? Contact one of our Agents.

Bottom Line

Whether you’re buying a newly constructed home or one that already exists, you’re making a positive economic impact in your local community – and it’s a step toward your homeownership goals as well. We are ready to assist you in making your dreams a reality. Let’s get started today. Contact us

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How Much Leverage Do Today’s House Sellers Have?

How Much Leverage Do Today's House Sellers Have? | MyKCM

The housing market has been scorching hot over the last twelve months. Buyers and their high demand have far outnumbered sellers and a short supply of houses. According to the latest Existing Home Sales Report from the National Association of Realtors (NAR), sales are up 23.7% from the same time last year while the inventory of homes available for sale is down 25.7%. There are 360,000 fewer single-family homes for sale today than there were at this time last year. This increase in demand coupled with such limited supply is leading to more bidding wars throughout the country.

Rose Quint, Assistant Vice President for Survey Research with the National Association of Home Builders (NAHB), recently reported:

“The number one reason long-time searchers haven’t made a home purchase is not because of their inability to find an affordably-priced home, but because they continue to get outbid by other offers.”

A survey in the NAHB report showed that 40% of buyers have been outbid for a home they wanted to purchase. This is more than twice the percentage in 2019, which was 19%.

What does this mean for sellers today?

It means sellers have tremendous leverage when negotiating with buyers.

In negotiations, leverage is the power that one side may have to influence the other side while moving closer to their negotiating position. A party’s leverage is based on its ability to award benefits or eliminate costs on the other side.

In today’s market, a buyer wants three things:

  1. To buy a home
  2. To buy now before prices continue to appreciate
  3. To buy now and take advantage of historically low mortgage rates while they last

These three buyer needs give the homeowner tremendous leverage when selling their house. Most realize this leverage enables the seller to sell at a good price. However, there may be another need the seller has that can be satisfied by using this leverage.

Here’s an example:

Odeta Kushi, Deputy Chief Economist at First American, recently identified a situation in which many sellers are finding themselves today:

“As mortgage rates are expected to remain near 3%, millennials continue to form households and more existing homeowners tap their equity for the purchase of a better home…Many homeowners may want to upgrade, but do not for fear that they will be unable to find a home to buy.”

She then offers a possible solution:

“While the fear of not being able to find something to buy will not disappear in a limited supply environment, new housing supply can incentivize existing homeowners to move.”

There’s no doubt many sellers would love to build a new home to perfectly fit their changing wants and needs. However, most builders require that they sell their house first. If the seller sells their home, where would they live while their new home is being constructed?

Going back to the concept of leverage:

As mentioned, buyers have compelling reasons to purchase a home now, and many homeowners have challenges to address if they want to sell. Perhaps they can make a deal to satisfy each party’s needs. But how?

The seller may decide to sell their home to the buyer at today’s price, which will enable the purchaser to take advantage of current mortgage rates. In return, the buyer might lease the house back to the seller for a pre-determined length of time while the seller’s new home is being built. A true win-win negotiation.

Not every buyer will agree to such a deal – but you only need one.

That’s just one example of how a seller might be able to overcome a challenge because of the leverage they have in today’s market. Maybe you feel a need to make certain repairs before selling. Perhaps you need time to get permits or approvals for certain upgrades you made to the house. Whatever the challenge, you may be able to work it out.

Bottom Line

If you’re considering selling your house now but worry a huge obstacle stands in your way, let’s connect. Maybe with the leverage you currently have, you can negotiate a deal that will allow you to make the move of your dreams.

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Write Home About Deer Friends

The Willamette Valley has so much to offer, especially some interesting neighbors. In Silverton, there’s a deer herd that likes to make its way around town. To the point that it makes for a natural stopping of traffic. Kids “ooooh,” and “ah,” while adults might be tapping their thumb on the steering wheel. And, still, other adults also have big smiles on their faces at capturing a beautiful moment when nature intersects into their daily routine. Perhaps it’s a little perk when you drive home and find some deer smack dab in the middle of your yard…looking up cautiously and wondering what the lights and fuss are about from your vehicle. You may want to write home about deer friends!

Write Home to Deer Friends
Sometimes the deer are just happily tasting the new grass in the front yard when you pull up. Photo by: Michael Kemry

Deer Sightings in Your Neighborhood?

Have you ever noticed a cute little furry creature munching on some of your lovely roses? Sometimes people think they are a nuisance, while others adore these creatures and find them a fun addition to the neighborhood. When has there been a time you’ve spotted a deer near your home? Or, out and about on errands? These little sights from nature are just one of the many things that add to the character of our gorgeous state. We’d love to see your photos of deer! Just @BSTRealtyLLC on Instagram for a chance to show your neighborhood deer off…perhaps they’ll become even more famous!

If you’re looking to deter deer from your home, then choosing plants they don’t think are very tasty is a good start. Or, possibly getting a fence that is higher than a deer can jump. There are also scented sprays that deer smell and don’t like too much. If you’re looking to attract deer, then putting out a few apples would most likely do the trick, however, who knows what your neighbors will think! There’s plenty of vegetation for deer to eat anyway in the lush Willamette Valley.

Whether you’re a fan or perhaps would like the deer to mosey on through elsewhere, your neighborhood is a special place to observe the wondrous wildlife of the Willamette Valley. If you’re looking for a neighborhood that’s more deer-friendly or one that may be a little less teaming with wildlife, give us a ring. Let’s figure out the perfect type of home for you and your family.

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Wondrous Views

If you’re a first time Home Buyer, the thought of buying a home may seem mind-boggling. It may feel like making the first step to climbing a mountain. At BST Realty LLC, we are here to help make your experience as smooth as possible. We get that our clients may need a bit of education when it comes to buying a home, especially your first home. We also understand that making the decision to buy a home is a big. It’s life-changing. And, we’re here to help you make the change you’ve been thinking about with your family. It doesn’t have to seem like trudging up a mountain, but my…you may have wondrous views once you reach your goal.

Crater Lake, one of the many great views that Oregon has to offer.

Taking the First Step

Perhaps you have been renting for a while, and you realize you’d rather put your money in a mortgage rather than toward rent every month. Maybe you and your partner have been saving up a bit, so that way you have enough to make a down payment. Whatever the reason is, we’re here to support you. Anything that’s your first time can feel a bit intimidating at first. It’s because things seem a bit more uncertain because you don’t know what to expect. We are here to make the steps to buying a home have more clarity. We are here to make sure you aware of each step.

From making an offer to closing on a home, each step can be exciting. There are many ways to make the offer the best of the bunch. And, right now, we are experiencing lots of times where multiple offers are being made on homes. Don’t let that get you down though. We are experienced at making offers that will put yours at the top, and also keep your needs and wants at the top, too. If you’re thinking of buying your first home, we’d love to talk. We are here to support you at every point in the journey and get to those wondrous views you have been waiting for. After all, it’s a once in a lifetime experience, and we are honored to be a part of it.

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Owning a Home Is Still More Affordable Than Renting One

Owning a Home Is Still More Affordable Than Renting One | MyKCM

If spending more time at home over the past year is making you really think hard about buying a home instead of renting one, you’re not alone. There are many reasons people consider buying a home. You may be wondering, however, if the dollars and cents add up in your favor as home prices continue to rise. According to the experts, in many cases, it’s still more affordable to buy a home than rent one. Here’s why.

ATTOM Data Solutions recently released the 2021 Rental Affordability Report, which states:

Owning a median-priced three-bedroom home is more affordable than renting a three-bedroom property in 572, or 63 percent of the 915 U.S. counties analyzed for the report.

That has happened even though median home prices have increased more than average rents over the past year in 83 percent of those counties and have risen more than wages in almost two-thirds of the nation.”

How is this possible?

The answer: historically low mortgage interest rates. Todd Teta, Chief Product Officer with ATTOM Data Solutions, explains:

“Home-prices are rising faster than rents and wages in a majority of the country. Yet, home ownership is still more affordable, as amazingly low mortgage rates that dropped below 3 percent are helping to keep the cost of rising home prices in check.

In 2020, mortgage rates reached all-time lows 16 times, and so far, they’re continuing to hover in low territory this year. These low rates are a big factor in driving affordability. Teta also notes:

“It’s startling to see that kind of trend. But it shows how both the cost of renting has been relatively high compared to the cost of ownership and how declining interest rates are having a notable impact on the housing market and home ownership. The coming year is totally uncertain, amid so many questions connected to the Coronavirus pandemic and the broader economy. But right now, owning a home still appears to be a financially-sound choice for those who can afford it.”

Bottom Line

If you’re considering buying a home this year, let’s connect today to discuss the options that match your budget while affordability is in your favor.

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The Importance of Home Equity in Building Wealth

The Importance of Home Equity in Building Wealth | MyKCM

The importance of home equity: Homeownership has always been the first rung on the ladder leading to household wealth. As Freddie Mac recently posted:

“Homeownership has cemented its role as part of the American Dream, providing families with a place that is their own and an avenue for building wealth over time. This ‘wealth’ is built, in large part, through the creation of equity…Building equity through your monthly principal payments and appreciation is a critical part of homeownership that can help you create financial stability.”

Home equity is the difference between the current market value of your house and the amount you currently owe on your mortgage. To estimate your equity, subtract your mortgage balance from the market value of your home.

You can find what you owe on your mortgage by looking at your last monthly statement or by contacting your lender. If you need help determining the current market value of your home, contact a local real estate professional.

Is homeownership truly a better path to wealth than renting? Importance of Home Equity

Some argue that renting eliminates the cost of property taxes and home repairs. Every potential renter must realize that all the expenses the landlord incurs (property taxes, repairs, insurance, etc.) are already baked into the rent payment – along with a profit margin. You don’t save money by renting.

The Importance of Home Equity in Building Wealth | MyKCM

As proof of this, First American broke down the net worth of homeowners and renters by income categories. Here are their findings:Only one income category ($127-192K) has a higher net worth for renters over homeowners. Every other category shows that being a homeowner leads to greater accumulated wealth.

The Importance of Home Equity in Building Wealth | MyKCM

According to the latest Homeowner Equity Insights Report from CoreLogic, the average homeowner gained $17,000 in equity in just the last year. Here’s a breakdown of the year-over-year equity gain by state:

When can you cash in on your housing wealth? Importance of Home Equity

Your home equity is part of your total wealth as a homeowner. The two most common ways homeowners can leverage their wealth are:

  • Selling
  • Refinancing

Selling: When you decide to sell your home, the equity you’ve built over time will come back to you in the sale. For example, if you paid off your $200,000 mortgage and sold your home for $350,000, you would receive $150,000 after closing.

Refinancing: You can refinance your current mortgage and take out some of the equity you have accumulated. With today’s historically low mortgage rates, you may be able to take out substantial cash and keep your monthly payment the same. Thankfully, homeowners today are doing this responsibly and not repeating the same mistakes made in 2006-2008 when some cashed out their entire equity to purchase luxury items like new cars, lavish vacations, etc.

How can these options help homeowners?

During these difficult times, many households are struggling with their housing expenses. Homeowners, because of their equity, have better alternatives. Odeta Kushi, Deputy Chief Economist at First American, recently explained that homeowners financially impacted by the pandemic will not necessarily be faced with foreclosure:

“The foreclosure process is based on two steps. First, the homeowner suffers an adverse economic shock…leading to the homeowner becoming delinquent on their mortgage. However, delinquency by itself is not enough to send a mortgage into foreclosure. With enough equity, a homeowner has the option of selling their home, or tapping into their equity through a refinance, to help weather the economic shock.”

Ready to stop renting? Contact us to get on the road to building wealth through home ownership!

What might the future bring?

The Importance of Home Equity in Building Wealth | MyKCM

Most experts are calling for home prices to continue appreciating going forward. The Home Price Expectation Survey, a survey of a national panel of over one hundred economists, real estate experts, and investment & market strategists, indicates appreciation will continue for at least the next five years. Using their annual projections, the graph below shows the equity build-up a purchaser would potentially earn by buying a $300,000 home this January:

Bottom Line

Home equity, for most Americans, is the quickest way to build household wealth. That wealth gives homeowners more options during good times and in difficult situations.

If you are a home owner and want to find out more about how much equity you have built, contact us and one of our experience agents can send you a free equity report.

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Meet Erica Rumpca

Meet Erica Rumpca! Erica deeply values her community and enjoys helping her clients figure out the best way to get the home of their dreams. Erica is an expert at understanding all that the Willamette Valley has to offer, because she was born and raised in Silverton. She is also well-versed in knowing about schools in the area, especially after raising a blended family of six children. When she isn’t doing real estate, she’s running Silver Falls Engraving with her husband. Erica also is the director of the Silver Fox Foundation Board, and a member of the Silverton Elks Lodge. Not only that, she helps coordinate and run Donate Dodgeball Tournament. If you’re looking for an agent who understands and values community in the Willamette Valley, then Erica is the person to call!

Meet Erica Rumpca
Erica and her wonderful family by Whitney Ulven Photography.

A People Person with Great Negotiation Skills

Erica loves working with people. Before becoming an agent, Erica worked for almost 30 years at a local manufacturing plant. While there, she was focused on customer service, sales, project management. When it comes to real estate, she knows how to navigate the terrain of negotiating real estate deals, so that her clients get what they want, and all parties involved are better for it. Silver Falls Engraving is also a part of Erica’s life, and she enjoys the idea of getting creative with client gifts! And, now, she’s doing an amazing job helping her clients find the home of their dreams.

Erica and her family goofing around and having fun!
Photo credit: Whitney Ulven Photography

Community Leader

We are proud to have Erica as a part of our community at BST Realty, LLC. She strives to find the perfect fit for her clients and loves helping people. Erica understands that buying a home can be one of the biggest decisions that one makes, and she’s there to support her clients every step of the way. With Erica’s expert knowledge of the Willamette Valley combined with her great enthusiasm for her community, she’s a fantastic agent to have on your team. We know that we love having her on ours. Give Erica a call, and start making your real estate dreams a reality.

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Horseback Riding

As the days get colder, the forest gets greener. Sometimes it’s the perfect time to go on a hike when you need a little solace from your day to day routine. Because, there are just less people out on the trail. Other times, it may be a great day to take a horse on the trail and go horseback riding. If you don’t know, Silver Fall State Park has some great horse trails. Whether you’re a hiker or a horseback rider, it’s fun to see these wonderfully beautiful creatures out on the trail.

Horseback Riding
Horseback riding on the trail at Silver Fall State Park

Getting back in the Saddle

Did you grow up on a farm as a kid? Are you thinking about getting back in the saddle as it were? Fond memories of getting your saddle ready and moseying about on the farm with your pony may be popping into your mind. Or, perhaps you had a lesson or two in the past. Maybe you’d like that feeling of working with horses in the outdoors again. Then, Silver Falls Lodge offers just the thing. They offer guided horseback rides from late spring to early autumn. You may also be thinking now’s the time to get more serious, then the Whitewind Farm in Mount Angel may be a place for you to check-out. It provides riding lessons, boarding, and much more.

Hitting the Trail

In the Willamette Valley, there are so many choices out there to explore. Our job is to make sure you get what you’re asking for, and that the journey there is smooth and as enjoyable as possible. A bit like taking a horse out on the trail. At first, it may be a bit intimidating, maybe because you haven’t ridden for a while. At Bledsoe Santana Team Realty LLC, we are here to smooth out the bumps in the road, so that way you can enjoy the ride. So, give us a ring, and let’s start the real estate journey together.

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Veterans Day

We have great appreciation and respect for our veterans. If you notice flags hanging high today, it’s because it’s Veterans Day. Today, we think about our loved ones who have served so that we may live more freely. At Bledsoe Santana Team Realty LLC, we also have agents who are veterans, and we are thankful and proud to have them on our team.

A mural in Silverton showing appreciation for the Veteran.

We also think about those veterans who have given their lives so we may live a more fruitful life, and for their families and the veterans who must continue on. During this day, we send love to those families and veterans. If you know someone who is a veteran, it’s a great time to pick up the phone and let them know how thankful you are that they served. Just a small thank you can go a long way, and you may also learn a thing or two about history…and more importantly, the history of our nation.

At Bledsoe Santana Team Realty LLC, we are a proud affiliate of the Homes for Heroes program. This program is designed to help people like our honored veterans save money on buying or selling a home. If you are in the active military or a veteran, you may qualify for this program. Please contact us, so that we may better serve you in your real estate journey. It’s the least we could do for all of the sacrifices you made to serve ensure our freedom in this beautiful country.

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