Jun 17, 2024 | Personal Finance
As a home buyer or refinancing household in Massachusetts , you have choices with respect to your mortgage.
You can choose a loan with accompanying discount points in exchange for lower mortgage rates; you can choose adjustable-rate loans over fixed rate ones; and, you can choose loans with principal + interest repayment schedules or repayments which are interest only, as examples.
For borrowers using fixed rate loans, there’s also the choice between the 30-year and 15-year fixed rate mortgage. Each has its positives and negatives and neither is “better” than the other.
Choosing your most appropriate fixed-rate term is a matter of preference and, sometimes, of budget.
The 15-Year Mortgage
With a 15-year fixed rate mortgage, mortgage rates are often lower as compared to a comparable 30-year fixed rate mortgage. However, because loan repayment is compressed into half as many years, the monthly payment will necessarily be higher, all things equal. On the other side, though, homeowners using a 15-year fixed rate mortgage will build equity faster, and will pay less mortgage interest over time.
The 30-Year Mortgage
With a 30-year fixed rate mortgage, mortgage rates tend to be higher as compared to a 15-year fixed rate loan, but payments are much lower — sometimes by as much as 50%. Lower payments come at a cost, however, as mortgage interest costs add up over 30 years. Regardless, 30-year fixed rate mortgages remain the most common mortgage product for their simplicity and low relative payment.
Which One Is Right For You?
There is no “best” choice between the 15-year fixed rate mortgage and the 30-year fixed rate mortgage. Choose a product based on your short- and long-term financial goals, and your personal feelings regarding debt. Mortgage applicants choosing the 30-year fixed rate mortgage can qualify to purchase homes at higher price points, but those using the 15-year fixed rate product will stop making payments a decade-and-a-half sooner.
There are benefits with both product types so, if you’re unsure of which path works best for you, speak with your loan officer for guidance and advice.
May 30, 2024 | Real Estate Definitions
As part of the federal Truth-in-Lending Act, refinancing homeowners are granted a 3-day “cooling off” period post-closing during which they retain the right to rescind, or “cancel”, their recent refinance without penalty or cost.
The Right To Cancel is protection against surprises at closing and/or a change of heart. It’s also a safety valve for homeowners signing paperwork under duress. With 3 days to revisit and rethink the terms of a loan, a homeowner can maintain tighter control of his/her financial situation.
If you ever have the wish (or need) to execute (more…)
May 13, 2024 | Buying Real Estate, Mortgage Guidelines, Mortgage Lenders
The FHA is insuring a greater percentage of loans than during any time in recent history. In 2006, it insured roughly 5 percent of the purchase mortgage market. Today, it insures one-quarter. “Going FHA” is more common than ever before — but is it better?
The answer — like most things in mortgage — depends on your circumstance.
Like its conforming counterpart, an FHA-insured mortgage is available as a fixed-rate loan and as an adjustable-rate one. Payments are made monthly and come without prepayment penalties.
That’s where the similarities end, however, and decision-making begins. For homeowners and buyers across Worcester , FHA mortgages carry a different set rules as compared to conforming loans through Fannie Mae or Freddie Mac that can render them more — or less — attractive for financing. (more…)
Apr 10, 2024 | Uncategorized
By: Rhonda Duddy, Esq., Massachusetts and New Hampshire Underwriting Counsel, Stewart Title
The recently proposed NAR settlement comes after several years of litigation. The plaintiffs in the lawsuits are home sellers alleging that NAR and other organizations participated in a conspiracy to raise, fix, maintain, or stabilize real estate commissions in violation of Section 1 of the Sherman Act and corresponding state law.
In 2023 the jury awarded the plaintiffs $1.8 billion. Although NAR denies the allegations, they announced on March 15, 2024 that they wished to settle the matter rather than move forward with an appeal. Defendants Keller Williams, RE/MAX and Anywhere Real Estate settled earlier this year. The sole remaining defendant is Home Services of America.
The total monetary settlement amount that NAR has proposed is $418 million, broken down as follows:
Within 30 days following the filing of the first motion for preliminary approval of the Settlement Agreement, NAR will deposit $5 million into escrow; within 90 days following final approval of the Settlement Agreement, NAR will deposit $197 million into escrow; no later than 1 year after the initial $197 million payment, NAR will deposit $72 million in principal, and no later than 2 years after the initial $197 million NAR will deposit another $72 million in principal. No later than 3 years after the initial $197 million payment, NAR will deposit into escrow the remaining principal, along with interest on each of the installment payments. The obligation to make these installments will be evidenced by a promissory note.
The practice changes NAR has proposed to implement are primarily outlined in Paragraph 58 of the 108-page Settlement Agreement and include the following:
- Eliminate and prohibit any requirement by NAR, any Realtor® MLS, or Member Boards that listing brokers or sellers must make offers of compensation to buyer brokers or other buyer representatives and eliminate and prohibit any requirement that such offers, if made, must be blanket, unconditional, or unilateral;
- Prohibit Realtor® MLS participants, subscribers, other real estate brokers, other real estate agents, and their sellers from (a) making offers of compensation on the MLS to buyer brokers or other buyer representatives or disclosing on the MLS listing broker compensation or total broker compensation;
- Require each Realtor® MLS to eliminate all broker compensation fields on the MLS and prohibit the sharing of the offers of compensation to buyer brokers or other buyer representatives;
- Eliminate and prohibit any requirements conditioning participation or membership in a Realtor® MLS on offering or accepting offers of compensation to buyer brokers or other buyer representatives;
- Agree not to create, facilitate, or support any non-MLS mechanism for listing brokers or sellers to make offers of compensation to buyer brokers or other buyer representatives;
- Require that all Realtor® MLS participants working with a buyer enter into a written agreement (before the buyer tours any home) with the following provisions:
1. The agreement must specify and conspicuously disclose the amount or rate of compensation it will receive or how this amount will be determined;
2. The amount of compensation reflected must be objectively ascertainable and may not be open-ended; and
3. Such a Realtor® or participant may not receive compensation for brokerage services from any source that exceeds the amount or rate agreed to in the agreement with the buyer.
- Prohibit Realtors® and Realtor® MLS participants from representing to a client or customer that their brokerage services are free or available at no cost to their clients, unless they will receive no financial compensation from any source for those services;
- Require Realtors® and Realtor® MLS participants acting for sellers to conspicuously disclose to sellers and obtain seller approval for any payment or offer of payment that the listing broker or seller will make to another broker, agent, or other representative acting for buyers (such disclosure must be in writing, provided in advance of any payment or agreement to pay to another broker acting for buyers and specify the amount or rate of any such payment);
- Require Realtors® and Realtor® MLS participants to disclose to prospective sellers and buyers in conspicuous language that broker commissions are not set by law and are fully negotiable;
- Require that Realtors® and Realtor® MLS participants and subscribers must not filter out or restrict MLS listings communicated to their customers or clients based on the existence or level of compensation offered to the buyer broker or other buyer representative assisting the buyer;
- Rescind or modify any existing rules that are inconsistent with the practice changes reflected in the Settlement Agreement; and
- Develop educational materials that reflect and are consistent with each provision in these practice changes and eliminate educational materials, if any, that are contrary to it.The Agreement also provides that the practice changes shall not prevent offers of compensation to buyer brokers or other buyer representatives off of the multiple listing service, nor will it prevent sellers from offering buyer concessions on a Realtor® MLS (e.g., buyer closing costs) so long as such concessions are not limited to or conditioned on the retention of or payment to a cooperating broker, buyer broker, or other buyer representative.
The Settlement Agreement further states that these practice changes will terminate 7 years after the class notice date.
The Settlement Agreement is still pending the federal court’s approval. We will continue to keep you updated as more information becomes available. If the Settlement Agreement is approved, the changes will go into effect within 60 days.
www.stewart.com
Mar 13, 2024 | Around The Home, Interesting Stuff
In today’s Leominster homes, front-loading washing machines are a popular choices as compared to traditional, top-loading machines for 3 main reasons:
- They wash more clothes per cycle, lowering household energy costs
- They’re environmentally-friendly, using less water per cycle
- They’re gentler on clothes, preserving colors and fabrics longer
They also require more care in the “cleaning” department.
Because of the way most front-loading washers are built, they tend to pool water in their drums, which can be a breeding ground bacteria and mildew.
Whether your front-loading washer smells “dirty” or not, you’ll want to follow proper procedures to keep it clean.
First, only use High Efficiency detergent. High Efficiency detergent is super-concentrated and creates fewer suds than traditional laundry detergent. Fewer suds means more soap is drained in the rinse cycle, leaving fewer chemicals and fragrances to sit in the drum. (more…)
