Eugene Mortgage News

Credit inquiries have little to no impact on your score.  They are the least important factor in your credit score.  The 3 bureaus confirm that borrower scores will not drop when a mortgage lender pulls their credit more than once.  It’s only temporary drop and your score will be back up in 2-3 months.

The important concept is when someone is shopping for the best rates and applies with several mortgage lenders, they won't get "dinged" for multiple inquiries because the credit bureaus will lump them into an inquiry during that short period of rate shopping. Credit scoring models typically count mortgage, or auto loan, inquiries made over a short time period, such as 2 weeks, to be one credit inquiry for credit scoring purposes. 

Applying for multiple credit cards/loans in a short period of time will have more of an effect on your credit score.  Reason being, you will have the option to use all credit cards that were opened, then with the mortgage applications, you will only get an approved once.

Your credit score is made up of the following:  payment history makes up 40% of your score, while credit utilization is 20%. The length of your credit history contributes 21%, and a total amount of recently reported balances 11%. Finally, new credit accounts are responsible for 5%.

Soft inquiry: Checking your own credit report with the major credit bureaus will not lower your score.  If you apply for a job and they pull a credit report does not affect your score.

Hard inquiry: Applying for mortgage loans, credit cards, personal loans, auto loans are hard inquiries.

Credit inquiries do remain on your credit report for the last 2 years.

Posted in:General
Posted by Mike Herborn on June 8th, 2018 10:43 AM

DO: Make sure your loan is approved, not just pre-approved or pre-qualified.
DON’T: Go house shopping without knowing what you can afford.

DO: Understand your credit and know your credit scores.
DON’T: Open or close credit lines without first consulting with your Loan Originator.

DO:  Keep the lines of communication open.
DON’T:  Be slow to respond to your Loan Team.

DO: Make a Savings Plan
DON’T: Make major purchases or open credit cards/loans.

DO: Maintain your current employment and income
DON’T:  Make major changes such as quitting your job or changing jobs.

DO: Have a paper trail for funds coming in and out of your account. 
DON’T:  Make large cash deposits into your bank account other than your paycheck.

DO: Keep good records.
DON’T:  Be surprised if you are asked for additional documents. 

DO: Ask questions.
DON’T: PANIC! (Let your Loan Originator at Stepping Stone Mortgage handle it!!)

Posted in:General
Posted by Mike Herborn on May 18th, 2018 2:54 PM

We are Flexible!

  • You can schedule a meeting with your mortgage broker at a time that is most convenient for you.       

  • We can offer greater flexibility in our loan products, and great responsiveness to our clients, while the big banks and lenders are focused on mass marketing.

  • We know and seek out niches that the Big Banks/Lenders don't bother with.

We are Responsive!

  • We are able to guide you through the lending process in the most efficient, and effective way. 

  • We are personally involved in qualifying you for a mortgage.

  • We are more likely to roll up our sleeves and do the digging that's necessary to get your mortgage approved.

Quicker Closings!

  • By having a number of different lenders to choose from, we can work with lenders that have streamlined their closing process. 

Knowledgeable in the local real estate market!

  • We understand the local real estate market and are available to answer any questions and guide you through the loan process. 

  • We are a part of the local and regional economy, so we know what's going on here – and use that knowledge to help you guide you. 

  • We work with local real estate agents, that want to work with buyers whose lenders know the local market and have a reputation for getting deals done.  This can be reassurance to the listing agent, and the sellers that their sale will close.

Keeping the business in our community and using our local companies will keep the community strong and growing!

Call Stepping Stone Mortgage today at 541-683-3300 to schedule an appointment with licensed loan originator to have all your questions answered.

Posted in:General
Posted by Mike Herborn on May 8th, 2018 12:04 PM

There are many reasons having higher credit scores will help you in the home-buying process. If you are looking to do a Conventional Loan, it will be important to have good scores. FHA/VA Loans are much more forgiving to lower scores and financing will still be available to you. Here are some of the less known ways your credit scores can affect your mortgage payment:

Interest Rates

Having higher credit scores can substantially change what your interest rate may be. If your credit scores are lower it may indicate more of a risk to the lender and raise your interest rate. A lower interest rate is still obtainable but would be at a cost that may not even be recaptured depending on how long you plan to own your home.

Mortgage Insurance

Usually when you have lower credit scores, your mortgage insurance premium will be higher in turn raising your total monthly payment. The difference in premiums from one credit score range to another can be significant. In fact, it can amount to tens of thousands of dollars over the life of your loan.

Homeowners Insurance

Having bad credit can even affect your homeowners insurance. Insurance companies will review your credit to help predict losses by determining if you are a risky customer and if you are more likely to file claims. If you have lower scores, this may affect your annual premium, raising your total monthly payment.

If you are looking to purchase or refinance and you have lower credit scores, it will be beneficial for you to work on raising your scores. You may still be able to obtain a mortgage with less than perfect credit by going either FHA or VA. But if you are looking to do Conventional you will end up saving money if you raise your scores. If you have questions about how your credit scores will affect your mortgage or would like to know ways to help raise your scores, give us a call at 541-683-3300.

Posted in:General
Posted by Mike Herborn on March 30th, 2018 9:26 AM

A cash-out refinance is the process of replacing your old mortgage with a new mortgage of a larger amount and receiving the difference of the amount in cash. Cash-out refinances are a great option if you have equity in your home and you need cash for certain expenses. Home equity increases when you pay down your loan balance and can also increase if your home gains value due to a healthy real estate market or home improvements. There are many uses of the cash from a cash-out refinance but here are some of the most typical uses:

1. Paying off high interest debt from credit cards
Paying off high interest debt from credit cards can end up saving you hundred and possibly thousands of dollars a month while also reducing your overall debt.

2. Paying off student loans 

Paying off the debt from student loans can also lower monthly payments and reduce your overall debt. 

3. Remodeling your home

Home improvements can be quite expensive and difficult for most people to fund. When you take cash out, you can fund the needed or wanted repairs in your home. 

4. Use for college funds 
If either yourself or a family member of yours needs the funds to go to college, a cash-out refinance can be a great option for you to receive such funds. 

5. Use toward the purchase of an investment (rental) property

The cash you receive back from your primary residence cash-out refinance can be applied towards the purchase of an investment property. 

Cash-out refinances can be a wonderful tool. To find out if a cash-out refinance is something that would benefit you and your needs, contact us at 541-683-3300! 

Posted in:General
Posted by Mike Herborn on March 16th, 2018 1:28 PM

Have you found a home in a great neighborhood, but it’s in bad shape? There are loan programs that will help you finance the fixer-upper! The Conventional Homestyle and the FHA 203k Mortgage programs will let you purchase a home and fund the needed or wanted repairs all in one loan. 

FHA 203k Loan

Purchase or refinance

Owner occupied only. 1-4 Unit properties, Planned Unit Developments, and FHA approved condominiums.

FHA down payment as low as 3.5%

6% Seller Concessions allowed

Flexible credit qualifying

Conventional Homestyle Loan

• Purchase or refinance

• 1-4 Units properties. Owner occupied, second homes and investment properties.

• Down payment as low as 5%

If you would like more information about the Conventional Homestyle or FHA 203k loan, give us a call at 541-683-3300. We would be happy to help you!

Posted in:General
Posted by Mike Herborn on March 2nd, 2018 1:01 PM

1. What is the first step I should take when I want to buy a home? 
The first step you should take when you want to buy a home is to go in to speak with a lender. This will help determine how much you can afford and the price range for a house you may be approved for. This will also put you in a better position as a buyer when you are ready to make an offer on a house. 

2. What credit score do I need to buy a house? 
There are many factors that go into what kind of credit score you need to get approved for a loan. The minimum credit score you need to get approved for a loan will depend on the type of loan you qualify for. It will also depend on how much of a down payment you are willing to put down. 

3. How much do I need for a down payment? 
The amount needed for a down payment will also vary depending on a couple of factors. The price of the home you choose and the loan terms that you get approved for. There are different loan options that may let you put down as low as 3% Conventional or 3.5% FHA. There are also 100% financing options and down payment assistance programs that you may qualify for. However, it is important to realize you are required to pay PMI (Private Mortgage Insurance) if you put less than 20% down. This will add to your monthly mortgage payment, so it is a good idea to consider this when deciding on how much you would like to put down. 

4. What are my options for a home loan as a senior? 
There are various options for senior citizens looking to get a home loan. If you have enough regular income, you may be able to qualify for a regular mortgage. If you are on living on fixed income such as pensions, social security, or a retirement account you may not be approved for a regular mortgage. However, if you are a homeowner of age 62 or older with equity built up in your home, you may be able to do a Reverse Mortgage. This type of mortgage lets you convert part of the equity in your home into tax-free income and no monthly mortgage payments while you still reside there. 

5. What are some first-time home buyer programs? 

In Oregon, there are many great down payment assistance programs for first-time home buyers. If you are a first-time home buyer locally in the Eugene or Springfield area you may look into local programs such as Eugene HAP, Springfield SHOP, and NEDCO IDA. If you are not looking to buy locally in the area you can click the link below for some more information on down payment assistance programs in Oregon. 

6. What costs are included in my monthly mortgage payment? 

One of the most important aspects to remember is that your monthly mortgage payment will not cover all of the other expenses of home-ownership. Typically, your monthly mortgage payment will include the principal, interest, property taxes, insurance and if you have less than 20% down you will also have PMI (Private Mortgage Insurance). It will not include all of the other usual monthly payments such as utilities, internet, cable, and HOA (Homeowners Association) fees. It is important to consider this when determining what kind of house payment you will feel comfortable with once you are ready to buy. 

We hope this answered some of the questions that may have been on your mind. We are always happy to answer any more questions that come up, so don’t hesitate to give us a call at 541-683-3300. 

Posted in:General
Posted by Mike Herborn on February 19th, 2018 2:20 PM

Buying a home and laying down roots is the American dream for many people. For others, it may be a terrifying thought due to the responsibility and obligations that come along with it. Purchasing a home is one of the biggest financial decisions that you will ever make but one which will come with many rewards. Here are some of the greatest advantages that drive many renters to home-ownership

You Gain Equity

Every month when you pay your mortgage payment, you are paying down your loan balance and increasing your equity. Your home equity can also raise when the market value of your house increases. Home equity is typically a homeowner’s most treasured asset as it can be very valuable in the future to pay for financial needs such as home improvements, medical expenses, or education.

You Enjoy Tax Deductions

Your rent payment is not tax deductible. The interest portion of your mortgage payment could be tax deductible*. Owning your home can reduce the amount you pay in income taxes each year and in turn put more money back in your pocket.

*Consult your tax advisor.

You Have Privacy

If you live in an apartment you share the walls, ceiling and floors with your neighbors. In a single-family home, you have privacy and your own space.

You Have a Fixed Payment

Your rent payment almost always increases when your lease is renewed. If you get a fixed-rate mortgage, your mortgage payments will never go up.

You Take Pride

If you live in an apartment or rent a house, you can feel like you only have a place to stay. When you own your home, you get the pride of home-ownership.

You Can Make Your House A Home

When you own a house, you have the freedom to make the living environment what you desire. You can have pets or make the changes that you want to without a landlord’s approval.

We know that buying a home is big decision and will bring forth many questions. If you are considering buying a house and have questions, just give us a call at 541-683-3300! We would love to educate you and help you make the best possible decision for what is most important, you!


Posted in:General
Posted by Mike Herborn on February 9th, 2018 1:40 PM

Raising your credit score won’t happen overnight. But there are things you can do to help it over time. Here is a list of the best ways to get that credit score up:

  1. Stay current on your existing accounts

    A good way to get your credit score up is to pay down the credit card balances you have and try to keep them low. An important aspect of your credit score is the amount of all of the credit you have compared to how much you use. It is best to use no more than 30 percent of all of your credit.

  2. Don’t apply for new credit

    This may seem to go along with our last point, but it is important to know. Every time you have your credit pulled by a potential creditor or lender, you can lose points from your credit score. This includes co-signing for a loan.

  3. Don’t close credit card accounts

    Depending on your total available credit, closing a credit card account with a high credit limit could potentially hurt your credit score. The same could be said about removing old debt. This may actually hurt your score because having a history of good debt is actually better for your credit score. It helps potential creditors see how you have managed your financial responsibilities. 

  4. Don’t consolidate your debt

    When you consolidate all of your debt onto one or two credit cards, it will appear that you are “maxed out” on that card and you will be penalized.

  5. Pay your bills on time

Keep paying your bills on time. Pay your bills on or before your due date and put them before buying anything that is not a necessity. Paying bills late can drop your credit score and the higher score you have, the worse the drop. If you need money for something, start a savings account and build it up while still staying current on your bills. 

Just remember, building your credit takes time. Remain patient and keep persistent in your efforts to raise your score. If you ever have any questions feel free to give us a call at 541-683-3300! 

Posted in:General
Posted by Mike Herborn on February 5th, 2018 9:44 AM

Getting enough money together for a down payment on a house can be stressful, but with an efficient savings plan you will be ready for that down payment without all of the worry.

How much house can you afford?

It is important for you to determine how much of a house payment you can afford before you implement a savings plan. Lenders will calculate your debt-to-income Ratio (DTI) by diving your total recurring monthly debt by gross monthly income expressed as a percentage. Once you know how much of a house loan you can afford, you can figure out how much you need to save each month for that down payment.

Making a plan

A good thing to know is the more you put down as a down payment, the less your loan and monthly payment will be. Here are some of the best ways to save enough money for your down payment:

  1. Start a monthly savings account

    Set up an automatic draw from your checking account into your savings account every month. Obligate not to touch these savings and keep them building up until it’s time to pay for your down payment.

  2. Lower extra monthly costs

    Review your budget and see what extra expenses you have every month that could be used as savings for your down payment instead.

  3. Skip the vacation

    Try to skip the vacation this year and save all of those expenses for your down payment.

  4. Get help from family members

    Many family members are eager to help first time home buyers achieve home-ownership and give money in the form of a gift for the down payment. Gifts can come from relatives and sometimes even your employer may be acceptable.

  5. Borrow from your 401(k)

    Explore the details of your particular plan. Many people get down payment money from withdrawing from Individual Retirement Accounts or borrowing from 401(k) plans. Be sure you comprehend the tax consequences, your obligation for repaying the money, and possible early withdrawal penalties.

  6. Reduce your credit card debt

    When you have a balance on your credit cards, interest charges will keep accumulating. Cut down this debt and turn this money into savings for your down payment.

  7. Sell items you don’t need

    Go through your possessions and decide what you actually need and what you might be able to sell. You may own collectibles you can put up for sale on an online auction, or household goods for a garage sale. You might also research what your investments may bring if sold.

  8. Get a second job

    While this can be exhausting, the money earned from a second job can help your savings immensely.

  9. Research local housing finance agencies

Some down payment assistance programs in the Eugene and Springfield area are Eugene HAP, Springfield SHOP, NEDCO IDA, and Grant Programs. And if you are not from the area, research your local down payment assistance programs. 



Posted in:General
Posted by Mike Herborn on January 26th, 2018 9:40 AM