Oregon Home Loans
Oregon home loans differ from a traditional loan in that a person who borrowed money from a bank undertakes to return either the money or the purchased property.
As soon as the borrower pays the funds in full, the housing becomes the property of a person. Up to this point, the housing actually belongs to the bank. In case of bankruptcy of the borrower and the inability to deposit funds to the account, the bank selects real estate and puts it up for auction.
How and to whom is a home loan issued in Oregon?
The rules for issuing home loans in Oregon differ for citizens of the country and migrants. But the home loan itself, along with the loan, can be issued by everyone. Also, interest rates differ, albeit slightly, when buying a house or apartment, real estate on the secondary market and on the primary market (which is in a state of constructing).
Requirements for the borrower
Financial institutions put forward a number of requirements, which can be found on the official websites. The government practically does not support young families, but creates stable working conditions for home loan repayments. There are refinancing programs: Home Affordable Refinance Program (HARP), available to those who are guaranteed by Fannie Mae or Freddie Mac.
The procedure for assessing the borrower and his solvency by the bank lasts from 3 days to a week. This stage is called pre-approval. It is necessary to talk with at least 3 banks to determine who has the best home loan terms in Oregon. It is recommended to get a mortgage from the bank where the main account is opened. So you can become a regular customer and get discounts.
The main three requirements of American banks:
- the age of the borrower is from 25 to 75 years old;
- official employment in America;
- the opportunity to make an entry fee in the amount of 10 to 50% of the total property value.
Each bank can additionally put forward a number of requirements. But the employees of the lending department will tell you more about them.4
Differences in home lending rates
A mortgage in the USA with a loan is called a mortgage. Banks offer borrowers 2 types of loan interest rates: Fixed and Adjustable. The first type of rates is stable, which means that the interest rate will remain at the same level throughout the entire loan term.
The second type of rates or “floating” option implies fluctuations in the interest rate. Initially, it is 1-2% lower than in the fixed version. But the bank reserves the right to raise the interest rate. Therefore, if the borrower plans to pay off quickly or repay the mortgage ahead of time, then you can use the second option and “floating rates”. At the same time, the floating rate may decrease or increase, usually this happens 5-10 years after the loan is issued.
The size of the home loan interest rate
At the time of 2019, the interest rate of a real estate loan is from 4 to 6%. It is necessary to pay the initial payment to the bank. Its size ranges from 10 to 50% of the loan amount. For a foreigner or a buyer of a large living space, the initial payment is more than for an American.
A number of banks offer their services and agree to issue a mortgage without a down payment. Before signing the contract, you must carefully read it, get acquainted with the amount of penalties.
For example, there are penalties for early repayment of a home loan. On average, these amounts are: 3% of the remaining debt in the first year, 2% in the second and 1% in the third.
The loan amount also depends on the bank and its level of trust in the borrower. Institutions issue loans and mortgages ranging from $100,000 to $2 million. The minimum repayment period for the entire loan is 5 years. The most common variant of the loan duration is from 15 to 30 years.
A foreigner is additionally recommended to insure housing and assess it. The cost of assessing a house starts from $500, and the cost of insurance is 2% of the amount of housing. Annual insurance is recommended.
Home loan process
Step #1. Applying for a loan and preliminary approval. This stage can greatly simplify the process of issuing a home loan in the United States. Bank consultants check the financial component of the borrower, determine the possible loan amount and interest rate.
Step #2. Credit check. At the request of the borrower, consultants check the international credit history. Additional information may be required from the borrower to complete the credit check.
Step #3. Providing a package of documents. In different states, the list of documents may vary slightly, but, according to common practice, it is necessary to collect papers confirming the identity of the borrower, his income, employment and the presence of assets.
Step #4. Completion (closing) of the transaction. During the closing of the purchase and sale transaction, the borrower signs legal documents, including those relating to the expenses necessary for the transfer of ownership. At this stage, the buyer-borrower receives all the documentation on the home loan and the keys to the new house.