Refinancing

According to vice president of research and economics at the Mortgage Bankers Association in Washington, D.C., Michael Fratantoni, mortgage refinancing is expected to experience a “very steep drop.”

Homeowners with ample equity, steady employment, and sterling credit have most likely already refinanced at least once in 2009 or 2010, which locked in low fixed rates, leaving little to no incentive to refinance in 2011.

Those who haven’t refinanced in the last two years due to inadequate equity, unstable employment, or impaired credit probably won’t do so this year either. While still-low interest rates may create an incentive, those same challenges remain to be surmounted.

Homes Loans

Unfortunately, its no secret that it is harder to qualify for a home loan today than it has been in the past, and it seems unlikely this will change any time soon.

Tight lending guidelines are the result of lenders’ new, more conservative attitude toward the risk of bad loans and the possibility that people will force them to repurchase sold-off loans. When this happens; when lenders are forced to buy back loans, they lose money.

This leads to lenders being that much more cautious when asking for voluminous documentation, such as multiple credit checks, income verifications, and appraisals.

Home Buyers

Low mortgage rates and fallen prices that make homes relatively more affordable to purchase mean now should be a great time to buy. There are plenty of homes on the market, and the possibility of future inflation could boost home values when looking at long term.

However, many might-be buyers remain dubious due to near-term doubts about the wisdom of buying a home. In a third quarter survey, 33 percent of those asked said they were more likely to rent rather than buy their next home.

Despite the Federal Reserve’s efforts to keep rates low, there has still been a recent rise in mortgage interest rates, a potential alarming fact for those looking to buy in the next few years. This does mean, however, that it could be better to buy sooner rather than later. (If rates go up, prices will come down, but it’s still better to lock in at an 8 percent loan than the possibility of it going down to 3.8 percent.)

While some of this information could seem alarming, it is important to remember these are predictions and not facts. An upside seems to be that renting could be a viable option, at least for a few years. The Warren Residential Group is an excellent resource whether you’re looking to buy Boston real estate or are looking into a Boston rental in the greater Boston area, so contact an agent today to schedule a viewing.

Since their acquisition, the firms refurbished the lobby and created an underground parking garage for top executive, spending over $40 million on improvements. In addition to the upgrades, they were able to offer lower rents than previous owners; even luring Bain Capital away from a Boston Properties owned building for a seven-floor lease in the Tower.

Under the deal conditions, Boston Properties paid $289.5 million in cash and assumed $640.5 million in debt, in the form of a securitized senior mortgage loan with a fixed, 5.68 percent interest due in January 2017.

Since its assembly in 1975, the Boston landmark has been known as a barometer for the real estate boom and bust. The 62-story glass skyscraper in Boston’s prestigious Back Bay neighborhood boasts over 2 million square feet of space, with roughly 1.7 million feet being available for rent, and an eight level parking garage with over 2,000 available parking spaces.

If you would like to live in the Back Bay neighborhood, or any of the other great Boston neighborhoods, please contact an agent at Warren Residential Group today to schedule an appointment. We would love to help you find your new Boston condo or luxury residence!

The lower rates on short-term loans, however, are not likely to affect the refinancing market.  Most people would need lower monthly payments to be able to afford a 15-year fixed mortgage as opposed to the more common 30-year loan.  Due to the weakened economy, fewer people are able to refinance.  In 2003, refinancing was more common, with about 33% of mortgages shifting from a 30-year loan to a 15-year loan.  Now, with the higher levels of unemployment and less equity in people’s homes, refinancing has fallen to about 20%, according to Credit Suisse.

And while these low rates are good news, it is important to note that not all homeowners will qualify for rates this low.  Typically one must have a certain credit score to qualify.  It’s important to conduct thorough research before buying a home or an apartment, and a qualified Boston realtor can help you with that.  Contact one of our realtors today or browse our online selection of Boston real estate for sale.

If you’re looking for a Boston rental, we can help with that, too!

Source article.

Additionally, we have sped up our foreclosure process – from petition to auction – to 138 days, down from 234 days in 2008. Timothy Warren, the CEO of The Warren Group, credits the facilitation of foreclosure to the familiarity of government foreclosure programs.
Read the full article here.

I thought that with the sales season under way, that I would share some tips for home purchase and ownership:
1. Get your financing in order
Given tighter lending practices — and that it’s a competitive buyers’ market — would-be buyers need to have their ducks in a row so that they’re ready when they see the right home.

2. Understand your time horizon

As a shorter-term buyer, you might consider whether the place is a good investment, and if it’s the kind of property that’s going to be attractive for the next buyer. “What concerns you now is going to be a concern in a few years,” Hillman says. A house near train tracks, for instance, is probably not what most people are looking for.

3. Know the overall market conditions
Investigate what comparable properties have sold for over the past three to six months, Dwyer advises. If you’re working with a buyer’s agent, he or she should know what fair-market value is, not just the list price.

4. Search and buy within your means This bit of advice is always true, but if the housing crisis has taught us anything, it’s that buying with the expectation that prices will continuously go up — and that if you can eke out the payments each month, you’ll be in a good spot in the long run — isn’t such a good idea.

5. If you’re waiting for prices to go lower, think again
Real estate is a bit like the stock market, in that it’s unpredictable. Though some people might be waiting on the sidelines for housing prices to dip lower, she says, “looking at the numbers, I can’t see them continuing to go down.”

6. Don’t get too sucked in by appearances
Buyers should keep in mind that many sellers will try to present their homes in the best possible light. “If the house has been staged, what [potential buyers] forget is that all that stuff is going out when [the sellers] leave. Sometimes you’re better off buying something that needs a little decorating, because it’s going to take on your own look anyway.”

7. Have questions prepared
Sellers and their agents should be prepared to answer questions including how old the roof, heating system, hot water heater, and windows are; if the basement has taken water in the time the seller has been there, and if there’s a sump pump; and what utilities and homeowner insurance generally cost.

8. If you’re thinking of buying a brand new house…
Consider that a home that’s been lived in has been tested. The seller will be able to tell you if the basement takes on water in a rainstorm, for instance.

9. If you’re buying a condo, know the rules
Condo lending rules have become more stringent, making it difficult for some would-be buyers to get financing. Lenders generally want buildings to be at least 50 percent owner-occupied, Dwyer says.

10. Think about a home’s intrinsic value
The downturn in the housing market and the uncertainty about where it’s headed may lead people to think less about picking up an incredible bargain in the hopes of making a huge profit and more about the home in its own right.
“[Buying a home] has always been a consumption decision and an investment decision,” says Nicolas Retsinas, director of the Joint Center for Housing Studies at Harvard. In recent years, “we moved that dot along the continuum, and it became an investment decision.”
“Questions such as ‘Is this where I want to raise a family’ and ‘Is this close to the things that are important to me’ will factor more into the decision,” he says.

With this info in mind, browse some of our listings available and make an appointment today!

(This list compiled by Ami Albernaz, a Boston Globe Correspondant. Read the full article here. )

Instead, it could be as little as two years. In a bulletin to lenders April 14, mortgage giant Fannie Mae said it is relaxing its previous rules that prevented loan applicants who have participated in short sales or deeds in lieu of foreclosure from obtaining a new mortgage for extended periods of time. The new rules are scheduled to take effect July 1.

Homeowners who’ve done short sales – such as under the Obama administration’s new Home Affordable Foreclosure Alternatives program – will also be able to qualify for a mortgage in as little as two years. Though Fannie Mae officials declined to discuss the reasoning behind the changes, the bulletin to lenders said the company hopes to encourage troubled borrowers to work out solutions that avoid the heavy costs of foreclosure.

If  borrowers can demonstrate that their mortgage problems were directly attributable to “extenuating circumstances” – such as loss of employment, medical expenses or divorce – they may be able to qualify for new loans with minimum 10 percent down payments in just two years. Housing and consumer counseling advocates welcomed Fannie’s relaxation of rules that had penalized borrowers who lost their houses following layoffs, illness and other unforeseen catastrophic financial events.

“This is a positive move,” said Marietta Rodriguez, director of homeownership and lending for NeighborWorks America, a national nonprofit network created by Congress to assist with homeowner financial counseling and community development.

“We all know that there are many people who through no fault of their own have to sell” – but were blocked from repurchasing a house for four years or longer, even though they’d rebuilt their credit, had qualifying incomes, and were fully capable of handling a mortgage responsibly.

(Source:  HARNEY, KENNETH R.: The Nation’s Housing. April 25, 2010)

Clients always ask me about mortgages.  They ask:  What is the current rate?  How much of a loan can I get?  Etc., Etc.  Well, the answer is that there really is no one answer for those questions.  There are so many variables that come in to account that it is impossible to give solid answer.  So, I asked our good friend Christina Longo over at Prospect Mortgage if she at least has some basic criteria for my Boston condo buyers to use as a guide.  Here is what she gave me:

For First time Home Buyers –

Credit score above 650

Need full documentation files (W-2, pay-stubs, bank statements, tax returns)

3.5% of own funds needs to be own funds into the transaction – unless putting 20% or more down

Verbal verification of rent for 12 months – name and # of landlord

FHA allow as little as 3.5% down

MA housing as little as 5% down (approval predicated on low income qualifications)

Condo guidelines –

All New Construction buildings (where the developer hasn’t yet turned over to homeowners association) you need 51% pre-sale requirement

No litigation allowed against the development

If commercial space in building – must be less than 20% of building (or can go for an exception)

All common areas and unit must be 100% complete to close on the unit

PMI – less than 20% down you need Private Mortgage Insurance (PMI)

You cannot go over a 41% debt to income ratio

If buying a condo you MUST have 70% owner occupancy ratio

NO LITIGATION – NO EXCEPTIONS

No more than 10% of the units in the project can be owned by more than 1 person

I know that is a lot to comprehend but at least if you use it as a starting point it should help you narrow down what might be possible and what definitely isn’t.  If you have more questions about Boston mortgages, please call Christina Longo at 978-886-9359 or email her at christina.longo@prospectmtg.com.

We at Warren Residential Group are proud to announce our partnership with Christina Longo - Sr. Loan Officer at Prospect Mortgage Company.

We partnered with Christina/Prospect Mortgage because she has shown us – even in this changing credit environment - that she is a valuable resource to our clients and at Warren Residential Group it a priority that our clients receive A+ service.

In addition, Prospect Mortgage has the products that fit our clients needs.  As a strong direct lender with the flexibility to also act as a broker – they provide choice, convenience, and control throughout the entire home buying and lending process.  Prospect Mortgage offers a full suite of lending products as they recognize the importance of having the right loan for most situations.

If you are thinking of buying and would like to talk with our experienced professional, please call Christina today at 978 886 9359 or email Christina.longo@prospectmtg.com

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I am a regular participant in the Bankrate.com Mortgage Rate Trend survey and this week’s survey may point you in the right direction.

The Bankrate.com survey is for conforming mortgages only. It is not specific to Cincinnati, nor does not apply to FHA mortgages, VA mortgages, jumbo mortgages, or super jumbo mortgages. For a personal rate offer, // contact me directly.

Here’s the group’s 30-day prediction for mortgage rates:

• 18% predict mortgage rates will increase
• 18% predict mortgage rates will decrease
• 64% predict mortgage rates will remain unchanged

I am bucking the trend, predicting that mortgage rates will decrease over the next 30 days.

My advice not be appropriate for your individual situation and I’m not always accurate besides. Either way, here’s what I told Bankrate.com:

“Demand for dollars-denominated bonds helps rates to ease lower.”

Now, there are a lot of reasons why mortgage rates change.  Economics, politics, trends — take your pick.  Each plays an important role. But of equal importance is the value of the U.S. dollar.

The U.S. dollar matters to mortgage rates because it’s the currency in which mortgage bond investors are repaid.  When the dollar loses value, so does the value of those repayments.  Therefore, mortgage-backed securities lose their luster and rates rise in order to entice investors back.

When the dollar gains, the chain reaction flips in reverse.  And, as a result, mortgage rates fall.

The dollar should gain in the coming weeks.  The U.S. economy appears to be recovering from recession — probably faster than our global peers.  As a result, whenever there’s a perceived risk in the global economy, global cash seems to flow to the U.S. markets. To investors, it’s the safest place to be.

This partly explains why stocks and bonds have moved in the same direction of late.  The same forces that are pushing stock markets higher are helping the U.S. dollar to gain, too.  It’s causing bond prices to rise and rates to fall.

That said, markets remain volatile and rates do, too.  The global economy is in flux and there are countless outside influences for which to account.

As a loan officer, I watch mortgage-backed securities and track rates on a real-time basis.  If you’re not working with a loan officer and want to work with me, I’m never too far from my phone or // my email so just reach out anytime. I’ll help you try to time a market bottom so you don’t overpay on your rate or your fees.

Or, you get more passive about it.  Watch me on Twitter: Briancav I post updates all day long