Is your mortgage scheduled to adjust this season? You may want to let it. This year’s ARM-holding homeowners in Massachusetts are finding out that an adjusting mortgage may be the simplest way to get access to today’s low mortgage rates — without paying the closing costs.
Currently, conventional adjustable-rate mortgages are adjusting to near 3.00 percent.
If your home is financed via an adjustable-rate mortgage, you’re likely cognizant of your loan’s life-cycle. At first, your ARM’s initial mortgage rate is agreed upon between you and your lender, a rate that both parties agree will remain in place from anywhere from one to 10 years, with periods of five and seven years being most common.
Then, after the initial “teaser rate” expires, the mortgage’s mortgage rate adjusts according to a pre-determined formula — one that’s also agreed upon at closing. The loan is then subject to an identical mortgage rate adjustment every 12 months thereafter until the loan is paid in full.
The most common conforming mortgage adjustment formula is to add 2.25 percent to the then-current 12-month LIBOR rate. (more…)
Despite several big-name banks pulling the product from their respective home loan offerings, reverse mortgages remain a popular mortgage choice among homeowners aged 62 or over.
A reverse mortgage is exactly what it sounds like — a mortgage in reverse. Rather than borrow a fixed amount of money then pay that loan balance down to zero as with a “forward” mortgage, a reverse mortgage starts at a given loan balance and works its way up as scheduled payments are added to the existing loan balance.
This 4-minute piece from NBC’s The Today Show highlights a few pros and cons of reverse mortgages, and the reasons why you may want to consider one, including :
No mortgage payments are ever due on your home
There is no credit check required for a reverse mortgage
There is no income requirement to qualify for a reverse mortgage
There are some basic qualification standards for the reverse mortgage program including a requirement that all borrowers on title must be 62 years of age or older; and that the subject property be a primary residence. Loan fees can also be higher than with a conventional-type mortgage.
If you meet the qualification standards, though, with a reverse mortgage, you have flexibility in how your home equity is distributed to you. You can receive a lump-sum payment, elect for monthly installments over time, create a line of credit, or a combination of all three.
Like all mortgages, reverse mortgages are complex instruments. That’s one reason why all reverse mortgage borrowers are required to attend counseling — the government wants you to be certain that you understand the nuances of the reverse mortgage program.
Your lender will want you to understand the program, too.
Planning to close on your home at the end of May? Plan ahead. Memorial Day is coming and the holiday may delay your closing.
Memorial Day marks the unofficial start of summer and the 3-day Memorial Day weekend is a popular vacation time in real estate-related industries.
Real estate agents tend to take time off because fewer of their clients are actively home shopping on a holiday weekend; mortgage lenders are closed because banks don’t operate on a federal holiday; and, title agents are often away from the office because the former two groups aren’t working.
But what’s supposed to be a 3-day weekend is actually a 4.5-day one. This is because many people leaving for a Memorial Day vacation will not go to work on the Friday before the holiday, and then getting back into the “work groove” on Tuesday can be a half-day affair.
Therefore, if you’re under contract to buy a home in Worcester County area , or to sell one; or if you have a refinance in progress that’s expected to close at month-end, there are some steps you should take to get pro-active with your closing. If you’re going to lose 4-and-a-half days at the end of the month, you’ll want to try to make those days up while the month is still young.
Here are 3 quick tips to speed up your closing and approval.
First, get your homeowners insurance policy picked out. Do your comparison shopping, select an insurer, and then prepay your first year of insurance, effective your closing date. Pay by check and not credit card, if possible, to avoid harming your credit score.
Provide your proof of payment to your lender immediately.
Next, if you’re using a Power of Attorney, have your documents signed by all interested parties and submit them to your lender for review. Don’t assume that your attorney’s Power of Attorney documents will be acceptable to a bank — banks require specific verbiage. If the documents are rejected, make the requested fixes and resubmit.
Banks do not compromise on Power of Attorney letters.
And, lastly, if you’re accepting gifts or using retirement funds for your downpayment, be sure to have your paperwork reviewed and on file with your lender as soon as possible. Do not wait to withdraw funds until just before closing, either. Have everything in the proper checking account at least one week in advance, and ready for your closing.
There are other steps you can take, too, to make sure your end-of-May closing goes smoothly and they all amount to “preparedness”.
When you’re asked for paperwork, provide it quickly. When you’re asked to sign a document, sign it on the same day. When you’re needed to attend a home inspection or an appraisal, do it during your first available opening.
Just leave as little as possible to the “last minute”, and everything should go well.
Been shopping for a mortgage rate? You may want to lock something down. Tomorrow morning, mortgage rates are expected to change. Unfortunately, we don’t know in which direction they’ll move.
It’s a risky time for Worcester County area home buyers to be without a locked mortgage rate.
The action begins at 8:30 A.M. ET Friday. This is when the government’s Bureau of Labor Statistics releases its April Non-Farm Payrolls report.
The monthly Non-Farm Payrolls report is more commonly known as “the jobs report” and provides a sector-by-sector breakdown of the U.S. employment situation, including changes in the Unemployment Rate.
In March 2012, the government reported 120,000 net new jobs created — half the number created during the month prior, and the third straight month of declining job creation. The Unemployment Rate fell one-tenth of one percent to 8.2%. (more…)
Last Friday, the Real Estate Bar Association of Massachusetts (REBA) filed an action in Suffolk Superior Court against a non-lawyer settlement service provider, National Loan Closers, Inc., and a number of Massachusetts lawyers who continue to perform “witness only” closings in violation of Real Estate Bar Ass’n for Massachusetts, Inc. v. National Real Estate Information Services, 459 Mass. 512, 946 N.E.2d 665 (2011). The filing followed a unanimous vote of the REBA’s Board of Directors.
“ ‘Witness only’ closings violate Massachusetts law prohibiting the unauthorized practice of law, place homebuyers and mortgage lenders at risk, erode the public’s confidence in the Commonwealth’s recording and registration system, and deprive the Massachusetts IOLTA Program of thousands of dollars of revenue,” said Chris Pitt, REBA’s President.
“Although most lenders, title companies, and title insurers now recognize that ‘witness only’ closings are not permitted in the Commonwealth, there are still some who persist,” said Tom Moriarty, Co-chair of the Committee on the Practice of Law by Non-Lawyers. “There is no justification for these unlawful practices to continue and title insurers, title companies and the attorneys who participate in ‘witness only’ closings should stop.”
Planning to close on your home at the end of May? Plan ahead. Memorial Day is coming and the holiday may delay your closing.