Portland Oregon Home Buying Guide
by Jolynne & Malcolm Ash

Mortgage & Finance

Can I Buy a House?

The two biggest obstacles to buying a home are the Buyer's credit score, and the lack of a down payment. Credit scores can be improved but it takes months and sometimes longer. If your score is not high enough to qualify for a loan you should begin taking the steps to repair it. The credit reporting agencies' websites have tutorials. Be very cautious about using any company that offers to repair your credit for a fee, most of them are scams. Regarding the down payment, the minimum required is 3% if you have excellent credit and 3.5% of the sales price for an FHA Loan (marginal credit). The money can be gifted under some circumstances. Closing costs can be paid by the Seller provided the home appraises for the sales price. You will need a pre-approval letter from a lender prior to making an offer to purchase a home. I wrote a free e-book several years ago that has very detailed information on how financing works. You can download a copy of it here: Portland Home Buyer's Guide


Banks are not easy to work with these days and I strongly suggest using a local lender. Online lenders can look good but when it comes down to getting it closed on time they typically fall short. This can cost you the house and your earnest money deposit. Self-employed persons will have a more difficult time getting a mortgage with tax returns being the only basis for income qualification. Buyers who make a significant part of their income from profit sharing, bonuses or commissions will also have to prove a history of income if those funds are needed to qualify.

Your Credit Report

Effective in 2004, all individuals living in the United States are entitled to a free copy of their credit report each year (Congress has been hard at work). I suggest you follow this link (below) and learn more about your rights, as well as protecting your identity. The credit report does not include your FICO score but you can pay a small fee to get it (it is only necessary to pay the fee to one of the three agencies since your score will be very similar with all of them). The site is somewhat complicated because the three credit reporting agencies require slightly different information. Be sure to read the instructions carefully and not 'wing-it' or you will not be successful. Married couples should obtain reports individually. https://www.annualcreditreport.com/index.action

I do recommend that you use a local lender (see below for my favorites) rather than an out of state or virtual lender. They are oftentimes far more difficult to deal with, and do not save you any money! We have had more problems with the big banks than with local and regional banks, so I don't recommend Wells Fargo, Chase or Bank of America.

Tim Vanderburg
Guild Mortgage

Dan Phillips
HomeServices Lending

To get an idea of what you can afford, try some of these calculators at Guild Mortgage.

Documents Needed

Following is a list of the documentation a Lender may need to process your application:

  • Last two years W-2's (tax returns if self-employed)
  • Current pay stubs
  • Last 3 months' bank & investment statements
  • Proof of Social Security & Retirement Income
  • Evidence of child support received for last 12 months
  • Rental agreements for all rental properties
  • Divorce decree(s)
  • Bankruptcy papers
  • Landlord's name, address & telephone number
  • Gift funds, name and address

Inspections: Oregon Property Buyers Advisory

The most common inspections are the Whole Home Inspection which includes pest and dry rot ($500-$700); Sewer Scope ($140); Radon Test ($160) and sometimes a Tank Locate ($100) to look for buried oil tanks. We have lists of the best inspectors in Portland. Inspections and repair negotiations are where an experienced Buyer's Agent really pays off. Knowing which issues are serious and where to get more information and repair estimates is something we are very good at. We have worked with some of the same contractors for many years and have great relationships that can be of benefit to you.

The following link contains the Oregon Property Buyers Advisory. It is designed to assist home buyers in understanding the different types of inspections that are available. It also explains (in layman's terms) the laws governing real estate transactions in Oregon, and explains many of the clauses found in the Earnest Money Agreement.

I especially like the links to everything from crime stats to utility information. This really is a MUST READ for all first-time home buyers. It is a PDF document that can be printed.

Oregon Property Buyer Advisory

Jolynne & Malcolm Ash, Realtors

Jolynne Ash, ABR, CRS
DreamStreet Team

Accredited Buyer's Agent

Email Jolynne@DreamStreetRE.com

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DreamStreet Team
Berkshire Hathaway HomeServices Northwest

3 Centerpointe Dr., Suite 260
Lake Oswego, OR 97035

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