Archive for the ‘Mortgages, Mortgage Rates, Refis, & Loan Limits’ Category

Billerica Mortgage Rates: Perception and Reality

Billerica mortgage rates have been so low for such a long time that it would be surprising if area buyers didn’t begin to take them for granted. It’s only human nature. Addressing would-be home buyers who, though qualified, remain on the sidelines, government-sponsored Freddie Mac headlined the question, “If Housing Is So Affordable, Why Doesn’t It Feel That Way?

The article appeared in Freddie Mac’s Insight publication which noted that right now housing isn’t just affordable—it’s “near record” affordable! HUD’s Housing Affordability Index has been rising for over 35 years, interrupted only briefly by the housing crisis of the mid-2000s. It hasn’t quite sustained the all-time affordability peak but is holding steady well within hailing distance of that 2012 record.

Billerica mortgage rates have cooperated nicely, continuing to go with the national herd. For 30-year fixed-rate mortgages, U.S. rates averaged 3.90%—down even further from the previous week’s 3.93%. Of course, the 15-year and adjustable rate offerings were even lower.

With that kind of good news, why do the media report “affordability issues” (Mortgage Daily News) and even an “affordability crisis” (PBS)? The answers dwell in both perception and in some underlying realities.

There’s definitely reality in the widespread phenomenon of a shortage of housing supply. Billerica listings may show a number of properties being offered, but the national number of homes up for sale remains “very tight.” The echoes from 2009, when new housing starts hit rock bottom, are still having an effect. In that year, housing starts barely equaled a third of the previous averages. Even though current construction levels are nearly back to normal, they’ve yet to make up for that shortfall.

Less real is the public perception of how much cash is needed for a down payment. Billerica mortgage rates may be tantalizingly low, but when potential local applicants “mistakenly believe they must have a 20% down payment to obtain a mortgage,” the result is a number of otherwise-qualified buyers who don’t know that more than half of today’s borrowers make smaller down payments.

Not mentioned in the Insight article is another psychological factor that could explain two things at once. In The New York Times’ “Politics” section, a commentary sought to explain why the Federal Reserve wasn’t acting to boost interest rates. According to the author, the cause lay with inflation rates, which remain low—“and that’s a problem” for Fed rate-makers. The reason higher inflation would be a good thing (despite common sense) is that it makes consumers feel good when their paychecks go up. “A little inflation can brighten the economic mood…people enjoy the illusion.”

The upshot here may be that even though today’s extraordinarily low Billerica mortgage rates create actual affordability, some well-qualified customers may feel safer staying on the sidelines until the economy starts generating go-go economy headlines. It’s an ironic reality that by the time those headlines materialize, actual affordability might have already begun to slip away.

If you’ve been mulling the wisdom of your own Billerica home acquisition, let me show you some great properties…and some great numbers!

Joan Parcewski —CRS, MRP, CSHP, SRES, CBR, LMC, Realtor & Notary
978-376-3978   JParcewski@LAERRealty.com    OR    JParcewski@gmail.com
 
Licensed MA & NH    
Introductory Video  https://youtu.be/RrM4q17cjU0
Laer Realty PartnersJoan_Parcewski (1 of 1)

 

 

 

Buyer’s Remorse, Billerica Mortgage Rates, and Summertime

Mortgage rates in Billerica remained mostly steady this past month, at least partially due to the predictable July-August doldrum effect. When the summertime vacation schedules of Washington and Manhattan movers and shakers presages a slowdown in activity and economic reports, there is simply less going on that might affect the rate meter—in either direction.

Summertime can also mark the beginning of a nationwide tapering off of real estate’s peak selling season. With the added factor of mortgage rates in (town) looking as if they will remain invitingly low for the near future, fear of a sudden rate rise is ebbing as well. It’s the kind of  apprehension that can spur some buyers into feeling the need to scoop up some of Billerica’s current inventory with less than due diligence, so that’s a positive development—especially if a new report from Trulia is accurate.

Trulia’s report highlighted the importance of careful deliberation for new buyers. A wide-ranging poll registered the startling fact that nearly half of Americans are willing to express some form of buyer’s remorse about their home soon after purchase.

Trulia found the top regret came in not choosing the right sized home. The lion’s share belonged to the third of homeowners who wished they’d bought a larger place. This might have been expected among those whose budgets wouldn’t accommodate a “dream home” property, yet even among Americans earning $100,000 or more, according to the study, 16% regretted having bought a home that was proving too small for their liking.

The takeaway is simple: if you are thinking of buying in the near future, allowing any outside factors (including Billerica mortgage rates) to push you into a home that isn’t right for you and your family can have an immediate downside. Buying a home is definitely a venture that rewards cool reflection…even when a potential dream home is in on the horizon.

At least for the moment, mortgage rates in (town) remain at historically affordable levels.  If you’re looking to buy this year, be sure to keep your “must have” list handy as you assess the emerging inventory. Better still, when you give me a call, I’ll be happy to turn my professional efforts to helping with the monitoring effort. I’m here all summer standing by!

Joan Parcewski —CRS, MRP, CSHP, SRES, CBR, LMC, Realtor & Notary
978-376-3978   JParcewski@LAERRealty.com    OR    JParcewski@gmail.com
 
Licensed MA & NH    
Introductory Video  https://youtu.be/RrM4q17cjU0

 

Events Solidify Burlington Mortgage Rate Speculation

Several weeks ago there was another interest rate development—though it was a slightly whipsawed kind of development. Since mortgage interest rates are so important to the bottom line in all but all-cash Burlington residential home sales, the direction rates are headed is something worth watching closely.

It was one of those days that come about twice a year. It was the occasion when the Federal Reserve Chairman is called upon to testify before Congress. The date is set as a biannual marker for revealing what’s likely to lie ahead for interest rates. If the Fed is going to decide to raise the Fed Funds rate, it’s usually the single strongest pointer to higher mortgage interest rates. All things being equal, that would eventually slow Burlington’s real estate market activity by making mortgage payments more expensive.

As the appointed hour for the testimony neared, Reuters weighed in early. At about 8:30 in the morning, they reacted to the advance copy of Chairman Yellen’s prepared remarks. Reuters reported on some key paragraphs citing the continued gathering strength of the economy—which would, therefore, “warrant gradual increases in the federal funds rate over time.”

Not great news for Burlington mortgage rate watchers—or was it? Reading more closely, there were those “gradual” and “over time” phrases. Wouldn’t that lead one to think the raises would be slow and gradual? Possibly more slow and gradual than previous Fed hints had led us to believe?

Ninety minutes later came the actual testimony, followed by questioning from the congressional committee. CNBC saw good news for Burlington mortgage applicants: “Fed stands ready to slow down rate hikes” was their takeaway. Sooooo, the Fed was going to raise the Fed funds rate (bad), but more slowly than expected (good).

The picture became clearer as the Mortgage News Daily pointed to newly released retail sales and consumer inflation reports showing “economic data that coincides with rates moving lower.” And despite anything the public hearing had produced, in MND’s opinion, “the Fed is less likely to flip the switch on those plans.”

So Burlington buyers and sellers could head into the coming days with few worries about interest rates, which remain at appetizingly low levels. If you are thinking of taking a look at some of the terrifically affordable Burlington home buys they make possible, today would be a good time give me a call!

Joan Parcewski —CRS, MRP, CSHP, SRES, CBR, LMC, Realtor & Notary
978-376-3978   JParcewski@LAERRealty.com    OR    JParcewski@gmail.com
 
Licensed MA & NH    
Introductory Video  https://youtu.be/RrM4q17cjU0
Laer Realty Partners    Joan_Parcewski (1 of 1)

Bedford Mortgages & the Student Loan Phenomenon

All of a sudden last month Bedford readers might have come across a number of new articles dealing with the same topic: the problem young first time home buyers are encountering due to outstanding student loans.

The target group is the millennials—everyone born between the early 1980s and 2000s. If you are one of them, you are frequently reminded that there are millions and millions of you out there. And millions who also share the same student loan problem.

There are conflicting accounts of the precise size of the issue, but it seems that the average college graduate now carries somewhere between $30,000 – $50,000 in debt upon graduation. The Federal Reserve says that the amount of student debt has more than doubled since 2007, to something like $1.3 trillion, at this point!

Nobody would deny that this appears to be a roadblock to young adults contemplating applying for their first Bedford mortgage. Dealing with banks or any lending institutions for the first time always has the aura of stepping into alien territory. A major unknown is the detail known as the debt-to-income ratio.

Apparently many would-be first-time homebuyers who are thinking about qualifying for Bedford mortgages automatically assume that their own debt-to-income ratios disqualify them from consideration, even though that’s not necessarily the case. At least according to the folks at Equifax, the debt reporting company, that perception is at odds with the reality.

The debt-to-income ratio is the monthly dollar amount an individual must produce in order to service his or her combined debts in relation to their total income. It is not the total amount of debt (no matter how soberingly large that number might be). Rather, it’s the ratio between the cash in and cash out per month. That becomes a considerably less daunting proposition because it’s a measure that can be improved much more rapidly. A recent survey showed that most respondents assumed that they had to reduce their debt payments by more than $300 per month in order to qualify for a mortgage, but an actual analysis showed that the real number was most often less than $300—and sometimes as little as $150.

Qualifying for Bedford mortgages differs for everyone, so the takeaway for Bedford Millennials (as for every other first time home buyer) is that assumptions shouldn’t get in the way of real fact-finding. Give me a call if you’d like to get a broad view of today’s Bedford starter home offerings. It could be that you are closer to moving into a home of your than you think!

 

For Some Burlington Home Loan Applicants, a Surprise Boost

A few Burlington mortgage applicants may see a one-time favorable change in how they are viewed by home loan lending institutions. It’s a technical change that could amount to a significant difference in the results they get when they apply for Burlington home loans.

The first evidence of what the Washington Post calls “a surprise boost” will be triggered on Saturday, which marks the July 1 beginning of a changeover in the information gathered by the three national credit bureaus. Equifax, Experian, and TransUnion have been working with a number of states to handle an awkward technical problem: many states have outmoded computer reporting systems that result in “troubling error rates” in official public records.

Translation: they’re frequently outdated, scrambled, missing identity information—just plain wrong.

The data in question—tax liens and monetary damages from civil court judgments—has too often been the basis for depressed credit scores for unfortunate home loan applicants. And because some governmental agencies can be excruciatingly slow to respond to requests for corrections, when time is a factor (as it often is) those mistakes can be decisive. For any Burlington home loan applicant whose own credit score has suffered, it’s not an abstract problem.

As part of an initiative by the credit bureaus to increase the accuracy of their scoring, beginning in July they will purge the dubious information from their files and stop collecting it altogether. FICO estimates that between 12 and 14 million U.S. consumers have tax liens or judgments in their current files: they can expect an abrupt jump in their scores. Consumers with no other negatives in their files could see their FICO scores instantly jump by 40 points or more. The result could be better home loan offer terms as well as lower interest rates.

Inevitably, there is a downside. Those with legitimate judgments and tax liens against them will also show elevated scores, which could be misleading to loan companies and landlords who rely on the numbers to make informed risk evaluations. The size of the problem is expected to be limited, though, since most people with judgments and liens have other negatives in their files.

In case you are uncertain whether your own credit score might be affected, that probably means it’s been a while since you checked…and that’s never a good thing! Keeping on top of your credit reputation is certain to pay off in the long run, especially when the time comes to begin looking for your next Burlington home—which is also when you’ll want to give me a call!

 

Joan Parcewski — CRS, MRP, CSHP, SRES, CBR, LMC, Realtor & Notary
978-376-3978   JParcewski@LAERRealty.com    OR    JParcewski@gmail.com
LAER Realty Partners (22 offices – one team)
   
Licensed MA & NH  
  
Introductory Video  https://youtu.be/RrM4q17cjU0
Laer Realty Partners                  Joan_Parcewski (1 of 1)

Are you a healthcare professional? There is a loan program designed for you.

There are so many loan options on the market and it takes a mortgage professional to tell us about them.  Woods Real Estate stays close to its mortgage professionals to keep abreast of these options – incuding sometimes little know options – for our clients.

Here is a program from Leader Bank – sent to us by Kevin Buckley (kbuckley@leaderbank.com ) – Healthcare Professionals Home Loan Program

Eligible employers are

        *  Beth Israel Deaconess Medical Center

  • Boston Shriners Hospital
  • Brigham and Women’s Hospital
  • Cambridge Hospital / Cambridge Health Alliance
  • Boston Children’s Hospital
  • Dana Farber Cancer Institute
  • Harvard Pilgrim Health Care
  • Harvard Vanguard Medical Associates
  • Joslin Diabetes Center
  • McLean Hospital
  • Massachusetts Eye and Ear Infirmary
  • MGH / Partners Health Care System
  • MGH Institute of Health Professions
  • Massachusetts Mental Health Center
  • Medical, Academic and Scientific Community Org.
  • Mount Auburn Hospital
  • Spaulding Rehabilitation Hospital
  • The Center for Blood Research
  • The Schepens Eye Research Institute
  • Veterans Administration Boston Healthcare Systems

Terms and Conditions

 – Maximum loan amount of $1,200,000

– Property located in Commonwealth of Massachusetts

– Maximum CLTV of 90%
– Maximum debt to income ratio of 40%
– Minimum FICO of 720
– Eligible properties include single family primary residences and warrantable condos
– US Citizens and Permanent Residents only
– Must be employed by one of the institutions listed

If you work at one of these healthcare companies and meet these requirements, give Kevin Buckley a call

 

Joan Parcewski, Realtor and Notary, Woods Real Estate (veteran owned and family operated real estate agency)

MRP, SRES, GRI, CBR, GREEN, E-PRO, LMC, SFR, CDPE, CIAS

Joan@woodsre.com     O 978-262-9665      C 978-376-3978       http://www.JoanParcewski.com

 

 

 

 

Buyers Denied Loan, But Still Lose Deposit – A Reprint

The following is a reprint of James Haroutunian’s column that appeared in the Lowell Sun on February 11, 2012

A fellow real-estate lawyer who write the massrealestateblog.com brings attention to a recent appeals-court case that cost a couple their $31,000 deposit.  This case highlights the importance of proper contingency language in purchase-and-sale contracts.

These unfortunate buyers started off like everyone else.  Armed with a pre-approval letter, the buyers’ P&S contract contained a standard mortgage contingency.  It offered a refund of the deposit if the buyers were unable to get a mortgage loan.  A deadline was set and the buyers worked diligently with their lender to get a loan commitment.

These buyers were unique because they did not intend to sell their current home – essentially buying a second home.  When the lender analyzed the buyers debt-to-income ratios, it was determined they could not afford to carry both mortgage payments.

As a result, the lender required the buyers to “list their home for sale.”  When the buyers refused, the lender denied the loan.  Timely notice of the denial was provided, but the sellers refused to release the deposit.  The court determined the buyer’s refusal to list their current home for sale was unreasonable, and in violation of the “prevailing terms and conditions” portion of the mortgage-contingency clause.

Here the court found the lender’s condition reasonable, and the buyers’ refusal to list their home for sale unreasonable.  Thus the buyers LOST their $31,000 deposit.

Sadly, if the issue were addressed upfront, simple language could have been added.  Stating that financing would not be conditional on the buyers’ listing or selling their current home may have lowered the “prevailing conditions” standard enough to save the buyers’ deposit

Attorney James Haroutunian practices real-estate law, estate planning and probate at 630 Boston Road, Billerica.  He invites questions at james@hlawoffice.com or by phone at 978-671-0711.  His blog is found at http://www.hlawoffice.com

 

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