Portland Mortgage News

The four words we long to hear when buying a home, Your Loan Is Approved!  Oh, how those four words can turn an average day into a great day.  Conversely, the words we dread to hear are, I’m sorry, but your loan is denied.

This article will discuss strategies to make sure that you hear the former and not the later when you apply for a mortgage.

Today, anyone who makes an offer on a home must have a pre-approval in hand when presenting the offer.  However, the key point to remember is this:  It is a PRE-APPROVAL.  What this means generally is that your loan officer has assisted you in completing a loan application, pulled your credit from the three major bureaus and submitted your loan electronically to Fannie Mae for what they call Desktop Underwriting.  This electronic underwriting application looks at the data submitted from the application and the credit report and renders either an approval or denial.

So, remember the “PRE” part of the equation.  Once the offer is accepted on the home, then the actual loan process begins.  What is done here is all of the information you gave the loan officer for the loan application is verified through a variety of means.  For instance, income is verified with paycheck stubs, W2s, tax return, employment letters, college transcripts etc.  Assets are verified according to the source.  Also, there are other investigations behind the scenes that in most cases, the buyer/borrower never is even privy to.  Suffice to say, there are a lot of moving parts here to piece together all of the initial verbal information you gave to your loan officer.

More often than not, during the process of these verifications, additional conditions or requirements arise as a result of the information received.  What happens here is that the loan that was approved initially by a computer software application is verified by a live underwriter to make sure everything submitted is properly and accurately documented.  Because each borrower, property and overall scenario is unique, almost as a fingerprint, there are a number of commonalities that must result from the data to meet the requirements of the loan approval.  If you have ever looked at a Fannie Mae underwriting guide, it’s about as thick as a bible.  With all the number of possibilities available to arrive at the final underwriting decision, the underwriter needs to make sure that the right path is taken.

This being said, you can see the margin for error can be very slim if the proper steps aren’t taken right at the beginning, thus the purpose of this article.  Knowing this, it is good to choose an experienced loan officer, especially if you have a unique situation that requires knowledge and experience to piece it together.  Here I have outlined are the things to consider that will give you the best chance of success in getting your loan approved and closed:

  1. Start early – If you are planning on buying a home in the near future, don’t wait until that time to talk with a loan officer. Early planning can alleviate a number of potential headaches when you are actually ready to buy. For instance, if you have recently started in a new job in a new line of work, it may be that you will need a certain amount of time on the job and in that line of work before the income you claim can actually be used as qualifying income for the loan. Or if you need to establish a credit history or rebuild a damaged one, all of this will take time. These are just a couple of many examples of things you might encounter. Sometime, you might need to wait longer to buy while other times, you might be surprised to find that you could actually buy right now.
  2. Preview your credit – One of the first questions your loan officer will ask you is, “how is your credit?” If you haven’t looked at your credit recently or at all, it would be good for you to know first before you apply. That way, if there are mistakes, you can get those resolved first. You will often be surprised at some of the stuff that shows up on credit reports. Every person can get their credit report free each year by going to www.annualcreditreport.com. This is the only free credit report site that is authorized by federal law.
  3. The things you should not do when applying for a mortgage:
    1. Change jobs (don’t become self-employed or quit your job)
    2. Buy cars or trucks (it is not the time to trade in your clunker)
    3. Use credit cards excessively (or let current accounts fall behind)
    4. Spend your closing money (you set aside that cash for closing, you’ll need it!)
    5. Omit debts and liabilities (from your loan application)
    6. Buy furniture (save the furniture until AFTER you’ve settled into your new home. You’ve lived without it this long, what’s another couple weeks?!)
    7. Open new credit cards (you cannot have any new companies looking into your credit)
    8. Make large or cash deposits (without checking with your mortgage advisor)
    9. Move money around your accounts (it just complicates things because every significant deposit is paper trailed)
    10. Change bank accounts
    11. Co-sign a loan (don’t co-sign for anyone, for any reason)
  4. Tell your loan officer everything that you think might have an impact on your ability to be approved for the home. Don’t embellish the truth about facts pertaining to your financial profile. And this should be obvious, but you’d be surprised, don’t lie to your loan officer. Everything is fact checked, so they’ll find out anyway. Too much information is better than not enough. Anything that is of no consequence will not be used, but if it has an impact positive or negative, it will be used in the final determination.
  5. Don’t apply at multiple mortgage lenders. Instead, decide who you are most comfortable in doing business with them and stick with them. Every time you apply, it puts an inquiry on your credit report. In other words, it reports to the bureau that they checked your credit. If you have too many inquiries, it can lower your credit score. And sometimes a few points can make the difference between an approval and a denial. Also, many hours of work is put into each mortgage loan. In the end, you can only close with one company. It wouldn’t be fair to have your loan officer take time away from other customers that need help to help you if you don’t intend to close with them.
  6. Make sure to follow the documentation instructions from the loan officer. For instance, if your loan officer asks for a paycheck stub, don’t partially or fully obscure any information on the paycheck stub as all of that information is important. If a bank statement is asked for, all the pages of the bank statement are required, even pages that don’t have information. Same goes with the tax return. It will seem like an invasion of privacy for some of the information your loan officer asks for. Keep in mind that 1. Everyone has to provide this information. 2. You are asking for a lot of money, so they need to make sure you’re able to repay the loan, and 3. All of this information will be held privately and in strict confidence. Protecting your identity is paramount in this industry. It all seems like a great inconvenience to gather all of the documentation required, but not providing the correct or only partial information will just delay your loan. Ultimately, the underwriter will still require it.
  7. Provide all requested information timely and respond to all inquiries timely as well. Since a purchase contract has an expiration date, usually 30-45 days from the date of acceptance, time is of the essence from day one. It is important to get started right away once the offer is accepted. I often find that people will wait until an inspection is done and even repairs complete before they apply for a loan. This can take a couple of weeks, leaving the onus on the mortgage company to provide the loan faster than may even be possible in order to meet the contract closing date. With many contracts written for 30 days today, that could leave only 15 days for a loan request to close, which, with all the federally mandated safeguards in place with respect to timing, could make it impossible to close in time.
These are the main issues that can affect your loan process and ultimately your approval and the final closing of your home.  Considering that buying a home is ranked as one of the potentially most stressful life events you will face, it only makes sense to do everything you can to make sure that as much stress as possible is alleviated.  Since there are things in your control that can affect the amount of stress you could potentially encounter, know that you now have the tools in your possession to make your homebuying experience as delightful as possible so when you have signed your final papers and the keys to your new home are handed to you, you can truly rejoice!
Posted by Bill McInerny on March 6th, 2018 10:01 AM


Remember the mortgage crisis of almost 10 years ago?  It is starting to become a distant memory.  The result of the mortgage crisis was a crackdown on many aspects of the mortgage lending industry.  One of those areas was adjustable rate mortgages or ARMs.  There were many risky loan products that some banks (won’t mention any hear) offered to consumers to “help” them to qualify for more home.  One of those you might remember was an ARM that the payment was so low that it didn’t even cover the minimum interest on the loan.  So even when you were making payments, instead of the principal balance going down, it was going up.  The banks didn’t mind lending these type of loans because home values were going up so quickly that they figure it wouldn’t make a difference as the equity of their collateral would still continue to grow.  Well, I think we all know what happened!  Homes went down in value and foreclosures were rampant.  A vast majority of the foreclosures involved these very loans.

I only mention this because of the fact that ARMs got a bad name as a result of these irresponsible loans that were made.  FYI, these loans have since been outlawed as well as some other types of loans.  However, the ARMs that did perform well are what they call Hybrid ARMs.  What this means is that the initial loan rate was fixed for a set number of years before it ever adjusted.  Though, not as commonly used as fixed rate loans, fortunately these are still readily available today.  The most common fixed period of these ARMs was 5 years.  The benefit was the first 5 years, the rate was significantly lower that the prevailing fixed rate.

The same applies today.  While the averaged fixed rate offered by Fannie Mae hovers just over 4%, comparable rates on these type of ARMs start at about ¾% lower fixed in for 5 years.  So here are some questions you may ask with the answers:

Q.  Why would I choose this type of loan?

A.  If you plan to sell at or before the end of the fixed period, there would be no point in paying more.  For a $250,000 loan amount, ¾% in rate makes a difference of $105 per month.     Over 5   years, that’s $6,300.

Q.  What are the difference fixed rate terms available as I may sell in a shorter or longer period

A.  Presently, available terms are 3, 5, 7 and 10 years.  The longer the fixed rate term, the higher the initial rate, however all of these are lower than the prevailing fixed rate

Q.  If I were to keep the loan longer than my fixed term, what could I expect?

A.  Though these loans have performed well during their adjustable period over the last 15 years, there is no guarantee as with what to expect in the future.  However, there are yearly and lifetime interest rates caps on these loans.  In most cases, the lifetime maximum rate is 5% over your initial rate.  So if rates go to 18%, which was about the worst they’ve been in the last 50 years This happened in the early 1980s) or so, your rate would never go more than 5% over your initial rate.  For instance, if your initial rate is 3.25%, then the lifetime maximum is 8.25%.

Q.  Are they harder to qualify for?

A.  The qualifying guidelines for these are generally the same as for a fixed rate loan.  Though there are some nuances that we could discuss if you were interested in learning more.

I personally had a 3/1 ARM back in about 2003 on a home that I owned then.  I kept the loan until 2012.  So this loan was fixed at 5.5% until 2006 (3 years), then adjusted yearly thereafter.  The average rate in the adjustable period of 6 years was 3% with the highest being 3.5%.  So I was quite pleased with it since fixed rates were in the 6% range during that time.  It saved me quite a bit of money over the years.

Keep in mind, these loans are not for everyone.  However, if you would be interested in learning more and find out if this might be right for you, call us at (503) 243-5626 or to email us, click here and we can discuss this further.

Thanks for taking the time to read this article! 

Bill McInerny NMLS #5077
Agape Home Mortgage LLC NMLS #4986
(503) 243-LOAN (5626) 

Posted by Bill McInerny on January 25th, 2018 1:23 PM

The number one most common question I am asked when a customer wants to apply for a mortgage isn’t what is your rate or how much does it cost.  The most common question is “how does all of this work?”

Considering how many times I have answered this question over the years, I felt like it was time to put this into writing so that, after I explain to them, I can refer them to this article.  That way they have it to refer to any time they have a question.  It’s uncommon that I provide a mortgage for a customer who is in the mortgage business already (although it does happen from time-to-time).  And even when I do, it is so different when you are the applicant.  So, for anyone who doesn’t work in mortgage lending even if they have purchased several homes over the years, the process can be a mystery for several reasons:

  1. The process is constantly changing and evolving to keep up with the changing world around us
  2. Unless you do this every day, it’s easy to forget all of the pieces that are involved in the process
  3. Each situation and each loan request are a little different, which is why we have so many options for borrowers to choose from

In order to explain this properly, I think it would be best to break it down in the steps of the process chronologically and explain each step.  Keep in mind however that the time line for each piece of the process is subject to change with respect to when and/or if it even occurs in the process, as again, each mortgage loan request is just a little different.  So, with that, here are the steps:

  1. Initial consultation – This is the first step of trying to determine which direction we will go. Consider this the foundation of the home you’re going to build. If the foundation isn’t right, the building will not be structurally sound. It is so important to have all of the necessary facts up front. Because, believe me when I say, if you think it’s relevant, it probably is, and if you don’t say it now, it will likely come up later during the process and potentially sabotage your purchase or refinance. The vast majority of my initial consultations are done over the phone without cost or obligation. Remember, this is information gathering at this point. Some of the things we look at during the initial consultation are:
    1. Credit history
    2. Work and employment
    3. Discussing the down payment (if a purchase)
    4. Looking at strategies to decide which direction to go
    5. Gathering all of the information for the initial loan application for approval
    6. Explaining what to expect in the loan process (thus the purpose of the article)
  2. Pre-approval – During the initial consultation, I will ask for permission to check your credit. Then, after our phone conversation, one of the first things I will do is electronically submit the loan request to Fannie Mae (largest mortgage loan insurer in the country). Loan approvals come back within minutes. After the request is approved, the borrower is notified and, if a purchase, a pre-approval letter is sent via email.
  3. Request documents – There is a standard set of supporting documents that we gather for each loan qualifying. Not every loan requires all of these, but most require at least some of these:
    1. Paycheck stubs
    2. W2s for 2 years
    3. Tax returns for 2 years
    4. Recent 2-month bank account statements
    5. Recent retirement account statement
    6. Current mortgage statement (if a refinance)
    7. Explanations for any derogatory credit evens in the last 7 years
    8. Explanations for any gaps in employment over the last two years
    9. Explanations for any large deposits in the last few months
    10. Purchase and sale agreement (if purchase)
  4. Prepare initial loan application and disclosure package for signatures – In the past, the loan application package and initial disclosures were either executed in person or by mail. Today however, most documents are electronically signed, which saves paper and speeds up the process.
  5. Lock-in the rate of interest for the loan (if requested)
  6. Open title and escrow – A third party company that handles all of the funds for the transaction, guarantees clear title and provides signing service for all final documents for loan closing.
  7. Order the appraisal – Appraisers are also a third-party entity whose job is to provide an unbiased opinion of value. In order to ensure that their valuation is unbiased, law prohibits any interested parties to the transaction to discuss details of the transaction with the appraiser directly. Lenders are required to use an appraisal management company as a liaison between the lender and the appraiser. The appraisal typically takes 2-3 weeks to complete depending on how busy the housing market is. In a very busy housing market, I’ve seen them take as long as 10-12 weeks.
  8. Submit loan to underwriting – once all of the documents are gathered, the title report for the property is acquired and the appraisal is completed, everything is packaged and submitted to an underwriter for review. The underwriter’s job is to determine if all of the documentation is complete and that the supporting documentation matches the information completed on the application. The underwriter is essentially a fact-checker, since back in step 2, we already obtain a pre-approval. The are just confirming that everything the pre-approval was based upon is indeed supported.
  9. Initial underwriter approval issued with conditions – This approval again is confirming at all required documentation has been provided. If the underwriter feels that they need to further supporting documents based on the initial approval, they will request it at this time. There is no typical documentation that they will ask for as it is all transaction dependent. Typically, things like explanation letter are required because they see something that may not make sense to them.
  10. Final approval – Once any conditions are submitted to the underwriter, if the conditions meet the requirements of what the underwriter requested, then a final approval is issued.
  11. Pre-closing – The loan file is passed on to the closing department from underwriting at this time. The closing department double checks to make sure all the information needed for final closing is in the file.
  12. Doc request and doc draw – Once the loan passes quality control, the file is given to the loan closer who draws the final loan closing package for signing at the escrow company.
  13. Signing of closing documents – The escrow officer will schedule an appointment with the borrowers to sign the final loan documents. The typical closing package is about 150 pages, so they allow one hour for review and signing. This is usually done at the title/escrow company.
  14. Final review and funding – The fully executed documents are sent back to the lender’s funding agent for final review to make sure everything is properly executed, then funds are balanced and wired to the escrow company. After the funds are wired and usually the same day, the documents are recorded with the county and your loan request is officially closed!
  15. If this is a purchase, then now you would get your key and move into your home!

That’s about it in a nutshell.  There are a number of steps in the loan process, but keep in mind, a lot of this is done behind the scenes.  Usually, a process takes between 30-45 day.  Most purchase transactions allow for 45 days with the option to close earlier if needed.  With refinance transactions, they take a little longer because of a mandatory 3 day waiting period at the end before funding.

If you have any further questions about the loan process or anything else in relation the mortgage loan, please click here to contact me.  I have been in the mortgage industry since 1986 and have seen about every possible scenario imaginable.  If there is a way to help you get the mortgage you need, you can be sure I will provide it for you.

Thanks for taking the time to read this.

Bill McInerny NMLS #5077
Agape Home Mortgage NMLS #4986
(503) 243-5626

Posted by Bill McInerny on January 15th, 2018 2:40 PM
I am excited to discuss with you today, our new Within Reach Grant down payment assistance program.  Please watch this 4 minute video to learn how you can receive a grant for your home purchase down payment:

Posted by Bill McInerny on January 10th, 2018 10:21 AM

I got this from a friend and wanted to share it...

Empathy:  is the ability to understand and share the feelings of another.  This is not a bad thing.

Sympathy:  is having feelings of pity and sorrow for someone or an understanding between people. This is not a bad thing either.

Empathy and sympathy equal apathy. They can relate with pain and identify with grief, but they are never change agents.

Compassion:  is a consuming fire of tender mercies, kindness AND a desire for change. Compassion not only weeps with those that weep but is also convicted by the truth of what can be. Compassion is the reformation that brings life altering transformation.  It’s active instead of idle.

Faith does not deny the current situation but sees the beauty that lies beyond it.

Imagine if Jesus had just sat with the man at the pool of Bethesda and felt sorry for him.  The poor guy would have been there another 38 years. Jesus had compassion on him and said, “Arise, take up your bed and walk”!

Empathy and Sympathy are not bad character traits but BEWARE! Do not confuse empathy and sympathy with compassion.  Empathy plus sympathy never moves. But Jesus was “moved with compassion.”

Let 2018 be a year where you are moved to transformation by the King of Compassion!

Posted by Bill McInerny on January 9th, 2018 5:36 PM

It’s no secret that over the last few years, home values have risen at nearly unprecedented levels.  Perhaps you’ve wondered at times how you could benefit from the increased equity position in your home, thus the purpose of this article.


Many don’t know, unless someone can point it out them, the ways in which this equity growth could benefit them.  And with mortgage rates presently very low, the options for smart financial planning abound.  Outlined below are some of the ways this increased equity position could be helpful.


  1. If you took out your last home loan with mortgage insurance because a) You had less than 20% down, or b) You took out an FHA or USDA type loan, you may find that refinancing to remove this mortgage insurance and also potentially lower your rate could save you hundreds of dollars every month. And in many cases, mortgage insurance is like rent, not tax deductible, so this is money that is going out the window every single month.
  2. With your home being one of your largest investments you’ll ever make, it pays to take care of that investment. It would be nice if homes never needed maintenance, but unfortunately they do. Most financial planners would agree that using equity for home improvements in many cases, increases the value of your home. For instance, just updating your kitchen with cabinets, appliances, countertops and flooring could have the largest impact on value, especially if you are considering selling in the near future.
  3. Consolidation of debt can be a smart way to use your equity in some circumstances. Many customers come to me asking if they can consolidate their debt so they can improve their monthly cash flow. But one question I always ask is, what will you do with the extra money you save each month? If you are in a position where you are barely making it and refinancing your debt saves you hundreds of dollars a month, that’s a good thing. However, I always recommend either going to a shorter term loan, where you can build up equity faster and still save some money per month could be a more responsible way to preserve your equity for the future. Or if a shorter term loan is just not feasible, at least take a prescribed amount each month from the savings you realize and apply it to the principal balance. This needs to be a consistent amount to be effective. That way, you can still shorten the life of your loan, building back up your equity faster. Another option some use is to take the savings or a part of it each month to invest in another financial vehicle such as retirement. Any way you look at it, it comes out a win.
  4. If you’ve ever wanted to build your own little real estate empire or just have a rental property or two, using the cash-out from a refinance is a good way to realize the down payment for such purchases. Having two or three properties multiplies the real estate equity you are building over time. Some have found that when retirement rolls around, having all of that extra equity can be quite helpful.


Of course there are a number of other ways you could effectively use the equity in your home.  These are just a few.  Call me or click below to respond to this article with your questions and let’s discuss your ideas and how your equity might better your financial position today while rates are still low.  Contact us today to find out more, click here.

Bill McInerny, CFO
Agape Home Mortgage LLC
NMLS #5077

Posted by Bill McInerny on January 8th, 2018 12:21 PM
Often, I find that customers call me wanting to buy a home or refinance their existing home, but they have lower credit scores. Sometimes they are surprised and sometimes not. The general consensus about credit scoring is this; if you have a habit of not paying your credit on time, you won’t have good credit scores. That is partly true, but there are a number of other factors that affect credit score that aren’t as well known.

When I first started in the mortgage industry in 1986, there was no such thing as a credit score. We analyzed the credit based on factors as they presented themselves on the report. Several years later, when scoring first appeared, it turned the mortgage industry upside down. None of us knew really what to make of it and we kind of hoped it would just go away. Now I’m glad it didn’t. At first, the credit scoring models were not very accurate and didn’t really present a completely true picture of what the credit history reported. But over time, the models have gotten better and better. Today, they have improved it enough so that many other industries use this scoring other than mortgage lenders to determine risk factors for extending credit. And with respect to mortgages, they present a more accurate picture of credit worthiness than any other qualifying factors for approval. This is confirmed by the default rate on mortgages based on the applicant’s credit score at the time of the closing of the loan.

Two constants with credit scoring over the years have been 1) credit scoring is different for each bureau, and 2) none of the bureaus will tell us exactly how they arrive at your credit score, but only a general idea. This is a big reason why for almost everyone, none of the 3 major bureaus report the same score for you. Sometimes a customer will have a score that is as much as 100 points different than the other scores. How can this be? Again, I want to show you some of the factors that go into a credit score. Because if you are applying for a mortgage, a 100 point lower score can make a very significant different in what you pay for a mortgage or could determine whether you even qualify at all. But before that, one important piece of information you will need to know is this; the qualifying score for your mortgage is going to be your middle score. If you have one score that is 100 points off, it may not affect your ability to qualify. Now knowing that, here are some of the factors that affect your credit score:

  • Serious delinquency – Such as late payments, especially more recent ones, for example, within the last 12-24 months. Mortgage late payment carry much more weight than revolving credit late payments since it is a mortgage you are qualifying for.
  • Too many accounts with delinquency – If you only have one account with late payments, but all of your other accounts show a clean payment history, it is expected that this was an isolated case and would have less impact on your score.
  • Collections, liens and judgment – These are other examples of delinquent credit, but pretty much next level. Accounts don’t typically get to this point without the creditor having made repeated attempts first to collect the debt. Now, there is a difference between paid and unpaid accounts. For instance, if you have a paid collection, it fares better on your score than if it’s unpaid since you did ultimately make the debt good.
  • Bankruptcy, short sale and foreclosures – These would be the highest level of delinquent credit. Mortgage companies will take a much closer look at these, especially if they are more recent in determining if and what you could qualify for. The good thing is, most of these do disappear from your credit after seven years of being closed/paid. However, it is important to note that these, as well as collections, judgments and liens that are left open/unpaid can carry over longer until they are taken care of.
  • Balances owed on revolving credit is high – This is a lesser known factor affecting credit scores. And this can be a significant factor affecting your credit score, especially if you are close to or over the limit on your credit cards. But this may be one of the easier thing to remediate in the shorter term. For instance, you were to pay down the credit cards to even 50% of the limit, it could have a significant affect on your credit score that could save you thousands of dollars.
  • Length of time accounts have been open – If you only started just recently establishing or re-establishing credit, it could take some time to build up your score. The longer the good credit paying history you have, the more likely your scores would be higher. Another important thing to remember is that most mortgage loan types require that you have a minimum length of time of established credit before they will give you a mortgage.
  • To many recent credit inquiries – Every time you apply for credit, the creditor who requests your report will show up as an “inquiry” on your credit report. For mortgage credit reporting, the last 120 days are reported. So, if you are applying for a mortgage with a few companies, it could have a small effect on your score. On the other hand, if you have applied for a number of credit cards in the last 120 days, it will have a bigger impact on your score.
Though there are some other factors that affect credit score, these are the most common. In the process of speaking with a customer who wants to purchase or refinance their home, one of the first questions I will ask is “do you know your credit score?” Then, in the process of pre- qualifying, I will ask for permission to check their credit. If their scores are lower in respect to affecting the qualifying or price of the mortgage I would offer them, I will examine the report to look for the factors that are causing the lower scores. Then, I will discuss strategies with them on how they could increase these scores both in the short and longer term. One of the very helpful tools we have, allows us to look at “what if” scenarios with your credit and pretty accurately predict what impact different strategies would have on the outcome of a person’s score. 

Many years ago, a valued colleague shared something with me that changed the way I do business. All I really knew up to that point is, if I couldn’t offer them a mortgage, I told them the reasons why and sent them on their way. But his strategy was different. He looked for every possible way to get them the mortgage they needed. And if he couldn’t help them now, he outlined a plan for them for 3, 6 or 12 months or however long it took for them to get to the point that they could qualify. Hey always left each person with hope, if not for now, at least for the future. I have taken that to heart, as every person has the right to be able to have their own home if they so desire. And I feel that this is the critical part of what I have been given to do for other.

Thanks for reading and I hope this will help you in some respect.

I wish the very best for you in 2018!

Bill McInerny, CFO Agape Home Mortgage LLC NMLS #5077
Posted by Bill McInerny on January 3rd, 2018 4:39 PM