Jevon Domench

NMLS# 118399

Sales Manager

Jevon Domench
Sales Manager

NMLS# 118399
State Lic: OR # 118399; WA # MLO-118399;
10 S Parkway Ave
Suite 203
Battle Ground, WA 98604
Direct: (360) 921-6686
Branch: (360) 369-4203
Fax: (866) 594-7904
jevon.domench@academymortgage.com
jevon@nwloanpro.com

Thank you so much for your assistance. We will definitely refer anyone we know to you. You were great and very helpful throughout the whole process.T & K Simmons
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As an experienced lending team, our goal is to provide you with individual solutions tailored to your specific needs whether you are purchasing, refinancing or building your dream home!

We have access to a large variety of financing options designed to meet the needs of the first-time homebuyer as well as the experienced owner. By providing start-to-finish service, we can ensure that your loan will be completed accurately, smoothly and on-time.

This exceptional experience is why past customers, real estate and financial professionals continue to refer us to friends, family, clients and co-workers. We believe you will too!

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NMLS# 118399

State Lic: OR: 118399; WA: MLO-118399;

Corp Lic: OR: ML-2421; WA: CL-3113;

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How will the Federal funds rate hike affect consumers?

On Wednesday, Federal Reserve Chair Janet Yellen made a much-anticipated announcement: The Federal Reserve voted to increase the federal funds rate. This is the first increase for 2016 and the second made in about nine years.

Though many economists knew an increase was probably in the cards for the final Fed meeting of the year, many consumers aren't sure what it means for them.

What is the federal funds rate?

By law, banks need to end each day with a certain amount of cash on hand. If they come up short, they do what many consumers do when they're low on cash: They ask a friend, or in this case, another bank.

The bank will usually agree to the short-term loan, but with an interest rate tacked on. The federal funds rate is the highest percentage a bank is allowed to charge another institution for borrowing money.

Initially, an increase in the federal funds rate doesn't impact many people outside the financial industry. But over time, banks will begin to pass along the newly increased costs to their customers. So, how does this impact you? It all depends on what sort of debt you have.

If you have…

A mortgage

Most people who take out a residential mortgage opt for the 30-year fixed-rate mortgage. The "fixed-rate" part means that your rate will stay the same as long as you don't change the terms of your loan. But if you plan to refinance in the future, you might find that your new rate is higher than the rate on your old loan.

If you chose an adjustable-rate mortgage, your rate will stay the same throughout the agreed-upon period - usually three, five or seven years. But after that, your rate adjusts annually, according to market changes. When this period begins, or if you're in this period already, you might begin to see higher monthly costs.

How you can save

If you have a fixed-rate mortgage with a relatively low interest rate, it's probably best to keep it where's it stands. But if you have an adjustable-rate mortgage, consider refinancing to a fixed-rate mortgage. You'll end up with a predictable monthly bill, and you might avoid high interest rate fluctuations in the future.

A credit card

Credit cards generally have much higher interest rates than mortgages, plus they compound. This means that if you carry a balance over from one month to the next, you'll be charged a certain percentage of that amount.

Then, if you still have a balance on your card by the time your next billing cycle ends, you'll be charged that same percentage, even on the fee accumulated through interest the month before. Because of this, an increase in your interest rate by even just one or two percentage points can make a big difference in the long run.

USA Today reported that banks will likely pass along their fee increases to credit card holders in the next few weeks.

How you can save

If you know you have a balance on your credit card that you've put off paying for a few months, now is a good time to take care of it. Paying your balance in full every month is the best way to avoid interest charges. Also, it never hurts to shop around for a new card. You may be able to find a lower rate, or a card with a promotional 0% APR. If you do, pay down your balance completely before the promotional period ends.

Student loans

Many Americans take out federal student loans to help pay for college. If you are already in college or have graduated, your loans likely have a fixed interest rate, CNBC reported. This is because the majority of student loans are federally funded; just 7.5% are private loans. These can either carry fixed or adjustable rates. If yours is an adjustable-rate loan, the federal funds rate hike will have a bigger impact.

Additionally, prospective scholars who plan to take out loans in the next year or so might see rates that are a little bit higher. Federal student loan rates are determined by taking into account the 10-year Treasury yield. This measure has been inching higher lately, especially since the presidential election. The change in the federal funds rate will most likely push the Treasury yield even higher, pulling student loan interest rates with it.

How you can save

Unfortunately, there's not much someone looking to take out a new loan can do to avoid higher interest rates, other than research affordable options to make an informed decision.

However, if you have a variable-rate student loan now, you could consider refinancing for a fixed low rate. According to Stephen Dash, CEO of Credible.com, a website that offers information on how to refinance student loans, the average borrower can lower their rates by 1.7 percentage points through refinancing, CNBC reported. If you have several student loans, variable-rate or not, you can also consolidate them. This can make payments a little bit less complicated, plus you may lower your interest rate.

The effects of the rate hike won't be apparent right away, but it's clear that most interest rates will begin to edge upward over the coming weeks, months and years. If you're considering taking out a loan or a mortgage, you might be able to save some money by signing on sooner rather than later.

Academy Mortgage is one of the top independent purchase lenders in the country as ranked in the 2015 CoreLogic Marketrac Report. Visit www.academymortgage.com to find a loan, get a rate, or calculate your payment today.

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Should you pay points in exchange for a lower mortgage rate?

Fluctuating mortgage interest rates always change the way consumers view the housing market. When rates go down, it's time to buy; when rates go up, making a purchase is a little bit less attractive.

However, there are ways for prospective homebuyers to acquire an affordable mortgage, even when rates are on the rise. Now, at a time when rates are trending up overall - despite the first two weeks of 2017 seeing modest declines - home shoppers are looking for options.

What are points?

One of those options is buying points to reduce the overall mortgage rate, a strategic move that costs a little bit more upfront, but could save a homeowner money in the long run.

"Discount points are like pre-paying interest."

Points vary in price depending on the mortgage, but they are always equal to 1% of the loan. So, one point for a $150,000 mortgage would cost $1,500. There are two different types of points: origination points and discount points, explained Bankrate.

Origination points are charged by the lender as a fee for creating the loan. They have no effect on the overall mortgage rate.

Discount points, on the other hand, are like pre-paying interest. They're an option you can choose, but don't have to. If you have a mortgage rate of 7% and choose to pay 2 points, you might be able to walk away with a 6.5% interest rate instead. This will save you a small amount of money each month. Over the years, you'll make up the difference and accumulate substantial savings.

Points becoming more prominent

In recent years, residential mortgage rates have been relatively low. The average interest rate in 2016 was 3.65%, according to Freddie Mac. One decade prior, it was 6.41%. Since rates were at historic lows, fewer homeowners were concerned with buying points. But as rates continue to increase, this option is beginning to come up in conversations with lenders and real estate agents more frequently, according to Builder Online.

"The rate hike has led to a conversation that I haven't had in a long time: the ability to buy down your mortgage rate," Arto Poladian, a Los Angeles-based real estate agent said, according to Builder Online. "It does mean having to pay more up front, but it is a powerful way to keep your monthly mortgage payment within the budget you set when rates were still below 4%. Now that rates are on an upward trend I expect more people will be exercising this option."

Is it worth it?

There's no clear-cut answer to whether paying points in exchange for a better mortgage rate is the right way to go. Everyone's situation is different, and, as noted by The Truth About Mortgage, pricing for points isn't based on any specific mathematical formula. Because of this, there's usually a point at which paying points is worth it and others where it isn't.

Before deciding whether to pay points or how many are best, look at all the options. Calculate how much you'll pay throughout the life of the loan with no points, with two points, and so on. Additionally, take into consideration how long you'll stay in the home. Be realistic; If you move in three years, paying points might not be the most cost-effective option, while staying for 10 years could save you a few hundred dollars.

Academy Mortgage is one of the top independent purchase lenders in the country as ranked in the 2015 CoreLogic Marketrac Report. Visit www.academymortgage.com to find a loan, get a rate, or calculate your payment today.

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Is an FHA loan or a conventional loan with PMI a better option?

Among the many decisions you'll have to make on your journey to homeownership will be the choice of how much to pay upfront, also known as the down payment.

The traditional amount to put toward your down payment is 20% of the home's value. But, as many prospective homebuyers know, this isn't always feasible. Many lenders will accept lower down payments, while requiring the buyer to also purchase Private Mortgage Insurance.

Another way to put less than 20% down is to look into other loan products, like an FHA loan. These are government-sponsored products that allow down payments of as low as 3.5%.

For the buyer who wants to put less than 20% of the price of the home down, both PMI and an FHA loan are good options. But for some, one might be more beneficial than the other. Before making this decision, it's important to know which is the more financially responsible choice.

History of FHA loans and PMI

The Federal Housing Administration was first created in 1934. At that time, the housing industry was struggling immensely, according to the U.S. Department of Housing and Urban Development. The FHA helped many Americans become homeowners, and largely improved the market as a whole. 

Years later, in the late 2000s, another housing downturn came in the form of the Great Recession.

"Between 2007 and 2009, FHA loan originations increased 355%."

During this time, many homebuyers didn't qualify for PMI, so people who wanted to buy a home with less than a 20% down payment needed to find another option. This caused FHA loan popularity to soar. Between 2007 and 2009, FHA loan originations increased 355%, according to WalletHub. In 2009, a record 1.8 million FHA loans were issued, compared to the 402,000 just two years prior.

Meanwhile, conventional loans with PMI plummeted. In 2007, 1.5 million conventional loans with PMI were originated. By 2010, that number dropped to 260,000.

In the years that followed, FHA loans began to increase in price. Additionally, as the housing market continued to recover, PMI became affordable again. This gave rise to conventional loans with PMI once more.

In 2015, FHA loans were still more popular than those with PMI attached. However, FHA loans are trending downward overall, while PMI is gradually growing more popular. And while they both have their merits, it's important for homeowners to understand why one might be a better option than the other.

When does PMI make sense?

If you can pay 22% of the home's value quickly or plan on staying in the home for a long time.

WalletHub pointed out that the economic value of an FHA loan depends on several factors, including how long you plan to live in the home and what your credit score is. FHA options include mortgage insurance, but it's wrapped up in the price of the loan as a whole. PMI, on the other hand, is a completely separate product from the loan itself. PMI can be taken off after a few years, once the loan amount reaches 78% of the home's value. In the case of an FHA loan, however, the mortgage insurance will be included for the entire life of the loan.

If you have good credit.

There is no set amount that a lender can charge for PMI, but it's usually between 0.5% and 1% of the cost of the loan per year. One factor that contributes to how much it will cost is your credit score.

"The cost of PMI dropped 47% for people who had a credit score of 760 or more."

Generally speaking, the higher your score, the lower your PMI will be. WalletHub noted that between 2014 and 2016, the cost of PMI dropped 47% for people who had a credit score of 760 or more. But for people who had a credit score of 660 or lower, the cost increased 28%. For people with a good credit score, choosing PMI over an FHA loan could save them as much as $8,000.

When does an FHA loan make sense?

If you plan on refinancing soon.

PMI makes sense if you plan on staying in the home long enough to pay down 22% of the home's value, at which point you can get rid of the insurance and just pay off the loan. Likewise, if you don't plan on staying in the home for long, an FHA loan might be the way to go, since it's generally a bit less expensive right off the bat.

Additionally, Zillow pointed out that FHA loans are typically easier and cheaper to refinance than conventional mortgages through a process called "streamline refinance."

They also are assumable loans, which means they can be transferred to another party. This means that when it's time to sell a home, the buyer can take on the responsibility of the loan at the same time that he or she purchases the house. Since FHA loans typically have lower interest rates, this might end up be a good selling point.

If you have low credit.

If your credit score is 660 or lower, opting for an FHA loan instead of a conventional loan with PMI can save you as much as $11,000.

If you recently experienced a credit problem.

FHA loans also have looser restrictions for time elapsed between certain problems you might have encountered, like a bankruptcy or foreclosure. If you are pursuing a conventional loan, you'd have to wait four years after a bankruptcy or seven years after a foreclosure to qualify. But if you're looking for an FHA loan, you can qualify just two or three years, respectively, after the event.

Academy Mortgage is one of the top independent purchase lenders in the country as ranked in the 2015 CoreLogic Marketrac Report. Visit www.academymortgage.com to find a loan, get a rate, or calculate your payment today.

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