Real Estate Information Archive

As the mortgage industry reinvents itself, you might expect new loan products to arise. However, the energy-efficient mortgage, or EEM, is not a new concept. Although the EEM is an option that has been available through all federal mortgage programs since 1980, that option is seldom used. Industry executives estimate that less than one percent of home loans in America are EEMs.

The purpose of the instrument is to roll the cost of energy-saving home improvements into the cost of the home loan, whether for initial purchase or refinance. The projected amount of savings created by the improvements increases the borrower's debt-to-income ratio used to calculate his loan worthiness. For example, if the energy-efficient improvements were to add $50 monthly to the loan, but the projected savings was $60 per month, the lender would approve the loan.

EEMs are available as conventional, Federal Housing Administration and Veterans Administration loans. Each has slightly different parameters:

1. Conventional mortgages add the annual projected savings to the annual income for calculation purposes, allowing the borrower to qualify for a more expensive home than they would otherwise. The process includes a home-energy rating prior to approval.
2. FHA loans are a bit more complex. The buyer must first meet the general requirements for an FHA loan. Then the loan can be increased by the lesser of the total cost of the improvements plus related report fees, or 115 percent of the median home cost in the area. The total amount saved over the life of the improvements must be greater than their total cost. Funds for the improvements are placed in escrow until after the loan closes.
3. VA loans are available for new and refinancing to qualified veterans with a cap of $3,000 to $6,000.

Unfortunately, calculations of resale price have not historically included energy-saving improvements. This trend is changing as the nation becomes more concerned with global warming. Environmentalists are hoping that green mortgages will attract more borrowers in the future.

Whereas once homeowners had to make a choice between the good looks of natural materials and the easy maintenance of fabricated alternatives, the quality of such materials has improved to the point that the smart shopper can have both looks and convenience. Some of the new products are initially more expensive than their natural counterparts are, but when you factor in their longevity, they actually save you money. Here are six imitations that may make you happier than the originals:

Fiber-cement siding

Made from flexible cement mixed with wood fibers, clapboards and shingles are impervious to rotting and warping. The factory paint has a projected life span of 15 years. The initial cost is about 10 percent less than wood.

Cellular PVC trim

While the product does not require painting, you can add realism to the trim by doing so, but the paint should last about five times longer than on wood. While only warranted for 25 years, it will actually last indefinitely compared to the 10 to 30 years you can expect from pine. The initial cost is about 10 percent higher than wood.

Quartz countertops

Made from quartz chips and resins, cleaning with a sponge is all quartz requires as opposed to annual sealing for natural stone, and is resistant to stains, chips and acid etching. The cost is roughly equivalent to mid-grade granite.

Solid vinyl fencing

Use a simple power wash to clean it. The surface will not require painting for at least 25 years, as opposed to every five years for wood. The cost is about twice what you would pay for cedar, so this product only makes sense if you plan to stay in the home for many years.

Fiberglass entry doors

Fiberglass skins over insulating foam are more energy-efficient than wood. They carry a lifetime warranty, as opposed to five years for wood, and cost 10 to 20 percent less than wood.

Clad windows

Real wood clad in an aluminum skin, they carry a 20-year warranty on the factory paint. They cost about 15 to 20 percent more than plain wood, but do not require the initial paint wood requires, so the cost is almost the same.

As you consider upgrades to your home, consider these exciting alternatives. You may find that you do not have to trade great looks for easy care and you may save money, too.

The population living in their own homes has decreased in Oregon, while the rental market grew, just as in the rest of the country. The cycle began with home prices rising to the point of forcing people out of the market. Financing became increasingly harder to obtain. Foreclosures pushed previous owners into rental homes. An unstable economy did not produce enough jobs with high enough wages for people to be able to buy homes. Frustrated home sellers often put their homes into the rental market, increasing the number of properties available for rent. Many potential buyers have been unwilling to do so until the economy and their job security stabilize.

The dramatic increase in need for rental properties brought the overall rental share more in line with the numbers of the 1990s. At that time, the rental share was about 32 - 36 percent of the total housing market. At the peak of the housing boom, that percentage dropped by two points, equating to from 100-200,000 Oregon residents owning homes than in the past.

The rental population spikes during difficult economic times due to job loss and lower income. As the economy improves and more of the work force is back on the job, the overall number of families moving into their own homes increases. Also, as the baby boomers retire and the younger generation reaches working age, more families will look towards home ownership and the demand for homes will increase. The future of the housing market continues to grow brighter as the economy gradually recovers. The journey may be a slow one, but the destination is gradually getting closer.

According to CoreLogic, the California-based provider of property analytics, the total number of homes in the U.S. that are in the foreclosure process dropped from 1.2 million in January 2013 to 794,000 in January 2014, representing a 33.8 percent decrease in total distressed properties. The national foreclosure rate fell from 2.9 percent to 2.0.

The rate of foreclosures in Portland is down from 2.6 percent to 2.0 percent in that same period. Additionally, 3.9 percent of homes in metropolitan Portland are seriously delinquent and in danger of falling into foreclosure. Statewide, the foreclosure rate dropped from 2.9 percent a year ago to 2.4 percent currently. In Oregon, 4.3 percent of all mortgages are delinquent with 3.89 percent more than 90 days past due. That number was 5.17 percent last year.

Changes to the foreclosure process in August 2013, which expanded access to a foreclosure mediation process, likely influenced the 2,292 foreclosures that have taken place in Oregon during the past 12 months.

The numbers tell us that the nation is in a slow recovery, but that it is moving forward. Oregon is in slightly better shape than the rest of the nation and Portland’s numbers are slightly more favorable than the rest of the state. Mark Fleming, the chief economist at CoreLogic, states that we are recovering but are not “there yet”. He opines that the ratio of completed foreclosures to the mortgaged homes in the process is still too high, even though it is still declining.

In any event, clearly the forecast for Portland is slightly brighter than in the rest of the United States. This is likely in part to a slightly better than average unemployment rate. That remains at 6.4 percent compared to the national 6.7 percent. The city gained an estimated 5,600 jobs in March. That is double the monthly average for last year.

After falling for three consecutive months, American home re-sales rose in December. Low mortgage interest rates continue to drive the recovery of the real estate market. The National Association of Realtors reported that sales of existing homes reached 4.87 million units in 2013, the strongest sales figures in seven years. The figures were slightly lower than predicted by economists, but overall a good recovery for the year. Sales slowed somewhat near the end of the year.

A sharp rise in mortgage interest rates and price increases have diminished sales figures somewhat as some home buyers cannot meet the higher prices. However, recent indications point to a rise in household formation, increasing demand and encouraging builders to undertake new projects.

Existing home sales declined slightly in February of 2014, but experts blame severe winter weather for a portion of that decline. Limited inventory of existing homes continue to drive solid growth. As job creation continues to rise slowly, so do home sales. The trends for 2014 may be a modest increase, but should remain steady. The median time on the market for all homes in February was 62 days, down slightly from 67 days in January. Of homes sold in February, 34 percent were on the market for less than 30 days. First-time buyers made up 28 percent of February home sales, an increase from 26 percent in January.

When winter finally makes an exit, the snows recede and the sun comes out, a host of chores to put the exterior of the house back in order greets us. The good news is that what seems at first like a lot of work is actually more of an inspection to see how much work we must do. Here is a checklist to help you survey any winter damages and get the actual work out of the way:

1. Check rain gutters and downspouts for loose or leaky areas. Make sure all are debris is cleared away to insure proper drainage.
2. Fill any low areas with compacted soil to minimize water pooling or flooding. Protect your foundations from water damage and eliminate stagnant water, which allows insects to breed.
3. Probe wood trim around the exterior of the house with a screwdriver to locate any loose spots. Make necessary repairs before rain damages the wood.
4. Examine the roof for lost or damaged shingles. Consider the age of the roof to determine whether you need to start a replacement fund. Engage a qualified roofer to inspect the flashing around skylights, vents and chimneys.
5. Check the outside of the chimney for damages. Hire a certified chimney sweep to clean and inspect the inside of the flue. 
6. Move firewood at least two feet from the home and elevate it at least 18 inches off the ground.
7. Inspect concrete slabs for shifting and cracking. Make sure they drain away from the house. Fill cracks with filler or caulk, then power-wash and seal the concrete.
8. Check hoses and faucets for damage from freezing. If you can stop the flow of water from a faucet with your finger, pipes inside the house may need replacement. Contact a certified plumber for an in-depth inspection if you suspect this is the case.
9. Have a qualified HVAC contractor clean and service the air conditioning system and clean the coils. Change all interior filters. Schedule periodic replacement to ensure peak performance.
10. Check lawn equipment to make sure it is ready for use. Make sure it is clean and blades are sharp.

As you inspect the home for damages, keep a careful list to help you prioritize the work and acquire any supplies you need to complete the tasks. When you are finished, go back over your list to make sure you did not miss anything. Now you can enjoy the spring weather!