Q&A With a Local Lender

This week I chat with a local lender about what’s going on with interest rates, loan programs, and so on. This is not meant to be a sales pitch about “buying now” but rather an opportunity to get some questions answered. With that I would like to introduce Kevin Tucker of Movement Mortgage, located in Bend on Greenwood Avenue. Tucker has been a lender in Bend for about 12 years.

Q: What is the first step in the homebuying process?

A: For starters, if you’re interested in potentially purchasing a home, the very first step needs to be getting pre-qualified. This means meeting with your lender and discussing your income, along with providing income documentation, taxes, pay stubs, w-2s, 1099s, P&L statements or whatever is needed to prove your income. Quick sidenote, if you or someone you will be purchasing a home with is self-employed, it can be highly beneficial to include your tax professional in the discussion so that you can maximize your income or deductions, depending on your goals/strategies. Self-employed individuals can write off certain expenses that “reduce” their income, so on paper it appears you are making less money than you really are to avoid taxes. This is smart as a tax strategy but might not be the best strategy to get approved for a mortgage loan.

Q: Any good programs currently for first time homebuyers?

A: Right now, we offer a 3% down conventional loan, which can be a great option even compared to a 3.5% down FHA loan. One other item that needs to be discussed is that the USDA offers a 0% down loan program that works for properties outside of the Bend Urban Growth boundary. That means that homes in Redmond, Prineville, La Pine, Powell Butte, etc. would qualify based on their geographic location. Applicants must meet certain criteria for this type of loan, but many people don’t know about it. So, if you have a good income but lack a significant down payment, the USDA loan program could be a great fit.

Q: Interest rates are the big talking points now. How do mortgage lenders forecast where rates are headed?

A: We use a few different tools to help us forecast where rates may be headed, but by no means is this an exact science. The first thing I like to look at is the Bond Chart in graph form. For most of 2023 the bond market was going down, which typically means rates are increasing. However, in late October the bond market started going up, and has hit a few major marks, and we have been seeing rates coming down over the last few weeks. Another great tool is the 10-year treasury, a benchmark bond in financial markets, reflecting the U.S. government’s long-term borrowing costs. It is worth monitoring the yield on these as they have an influence on interest rates both nationally and internationally. Changes in the 10-year treasury can signal economic expectations and impact various sectors including housing markets.

We will attempt to touch on some more topics like this in the coming weeks, so please feel free to reach out to me as always with questions jkeane29@gmail.com. Thanks!

This article appears in Dec 13, 2023 – Dec 25, 2024.