Nationwide, mortgage rates are low in Worcester County area and home prices remain relatively low, too. This combination, plus rising rents, is pushing renters in some cities — including Worcester County area — toward first-time homeownership.
Buying your first home can be exciting, but you should also do your research to make sure that you ask the proper questions of the process, and make the best choices for yourself and your household.
For example, recommended questions for first-time buyers to ask home sellers include :
What major repairs have been made to your home?
Although standard disclosure forms are supposed to provide information regarding past damage and renovation to the property, there are occasionally repairs that are omitted or otherwise forgotten. Be proactive and ask pointed questions about the roof, the foundation, and the electrical system. Some home issue have a way of resurfacing many years later and it’s best to know in advance. •
To which school district does the home belong?
As a first-time homebuyer, you may or may not have school-aged children. However, in many areas, public school rankings positively (or negatively) affect home values. Ask your real estate agent for school district data. Consider asking the seller for feedback, too.
Is this a “distressed” property, and what does that mean to me?
For many home buyers, the allure of a foreclosed home or a home in short sale can be large. Prices are discounted as compared to comparable real estate — sometimes by as much as 20%. However, many distressed properties are sold as-is,” with little room for negotiation. This means that homes may be defective or, worse, uninhabitable. Ask your real estate agent for help with distressed homes and their suitability to your home buying needs.
After asking the above questions, and other questions, too, it’s important to remember that buying a home can be an emotional decision; and one that requires using your “brain” as much as your “heart”. Try to keep emotions in check so that you don’t overpay for a home that’s unsuitable, for example.
The U.S. housing market recovery is underway. New home sales are at a multi-year high, housing starts are at pre-recession levels, and home builders plan for a strong 2013.
Since late-2011, falling mortgage rates have boosted buyer purchasing power. Now, today, in many U.S. markets, the number of active home buyers outnumbers the number of active home sellers. It’s among the reasons why home supplies remain scarce and why home prices are rising.
Roughly 20 percent of today’s home buyers purchase homes with cash. For everyone else, the ability to gain mortgage approval depends on income, assets, and, most importantly, credit scores. Your credit score is a predictor of your future payment performance and lenders pay close attention.
If you plan to buy a home in Worcester County area or anywhere else in the next 12 months, spend some time with this The Today Show interview. It’s five minutes of practical credit scoring advice, including separation of credit score myth from credit score fact.
Among the credit scoring tips shared :
How to get your credit checked without harming your credit score
The value of using automatic payments with credit cards
How to use “old” credit cards to boost your credit score
You’ll also learn about utility companies and why you should never be late with payment.
As compared to August 2011, last month’s average, mortgage-financing home buyer’s FICO score improved 9 points to 750. The average “denied” mortgage applicant’s FICO score was 704. Clearly, standards are high. However, credit scoring is a system and, with time, you can improve your rating.
Watch the interview and find ways to make your credit score better. With better credit comes better mortgage rates.
Mortgage rates in Massachusetts continue to troll near all-time lows, boosting the purchasing power of home buyers statewide.
According to Freddie Mac’s most recent Primary Mortgage Market survey, the average 30-year fixed rate mortgage is now 3.39 percent nationwide, just three ticks off an all-time low. At the start of last quarter, 30-year fixed rate mortgage rates averaged 3.62 percent.
One year ago, they averaged 4.12%.
When mortgage rates are falling, they present Worcester County area home buyers with interesting options. Because of lower rates, buyers can choose to tighten their household budgets, buying an ideal home but paying less to own it each month. Or, for buyers who shop for homes by “monthly payment”, falling mortgage rates put more homes with affordability’s reach.
As a real-life example, for a buyer whose monthly principal + interest mortgage payment is limited to $1,000 per month, and whom opts for a 30-year fixed rate mortgage, as compared to January of this year, the maximum property purchase price has climbed 6.6%, or $14,000 in list price.
Consider this comparison:
January 2012 : A payment of $1,000 afforded a maximum loan size of $211,756
October 2012 : A payment of $1,000 affords a maximum loan size of $225,771
The 6.6 percent increase in affordability outpaces this year’s rise in home prices and is one reason why the U.S. housing market is improving. Slowly and steadily, the U.S. economy is improving and “good deals” in housing are becoming harder to find. In addition, because homeownership is now less expensive than renting in many U.S. cities, home demand among buyers continues to rise.
For today’s home buyer, market conditions appear ripe. Mortgage rates are near all-time lows, low-downpayment mortgage program remain plentiful, and home values have been rising since late-2011. Within 6 months, rates may be up and homes prices, too. Purchasing power would decline, decreasing home affordability nationwide.
The best “deals” in housing, therefore, may be the ones you find today.
With mortgage rates at all-time lows, purchase and refinance activity is climbing.
Home sales are at their highest levels since May 2010 as home buyers take advantage of favorable economic conditions. Home prices are low, household income is rising, and rents are up in many U.S. cities.
Low rates have stoked mortgage refinance applications throughout Worcester County area , too.
Last week, with 30-year fixed rate mortgage rates slipping to 3.36% nationwide, on average, more U.S. homeowners were in search of a refinance than during any one-week period since April 2009.
With loan volume high, banks are nearing their respective capacities for underwriting and approving home loans. As a mortgage applicant, therefore, you’ll want to make sure that you’re taking whatever steps necessary to ensure that your home loan closes on-time, and without hassle.
You most important responsibility? Be responsive to your lender.
When asked for paperwork and/or supporting documentation, providing a 24-hour turnaround can keep your loan “top of mind” with your underwriter. This is important because underwriters are people and, sometimes, people “forget”. The fewer times that an underwriter has to “relearn” your file and its nuances, the better your chances for a speedy approval.
A secondary benefit to being responsive to your lender is that you’ll be less likely to miss your rate lock deadline which, too often, is a costly proposition for a borrower. Even if the mortgage market has improved since your original lock date, your lender may assess rate-lock extension fees equal to up to one-half percent of your loan size.
Other tips to ensure an on-time closing include :
Disclose everything upfront. Your lender will find out anyway, so don’t under-disclose important facts.
Be accessible. Your lender will often want to contact you by phone or email. Don’t lose days playing “phone tag”.
When required, schedule your appraisal for as soon as possible. It’s easy to lose days to this part of the process.
And, lastly, don’t challenge an underwriter’s request for “more paperwork”. Lenders want to see as little paper as possible. They don’t ask for information that’s not required to approve your loan.
Mortgage volume is expected to remain high through the end of 2012 and into 2013. Follow these steps to help close your loan on time, and with few headaches.
Home values are rising in many U.S. markets. The S&P/Case-Shiller Index has home values up 1.2 percent as compared to last year, and the government’s Home Price Index shows an increase of 3.7 percent.
This has been partially evidenced by rising median home sales prices nationwide. Versus last year, the median sale price of a new construction home has climbed 17 percent, and the median sale price of an existing home sale is higher by 10 percent.
For home sellers, an improving market means the chance to net more proceeds from a home sale. Or does it?
In this 3-minute piece from NBC’s The Today Show, we hear about the home appraisal process and how it may be limiting the number of home sales nationwide, plus the prices at which homes are selling.
The interview includes several key insights into the home appraisal process :
In a rising housing market, a home’s appraised home value may be lower than its “true” market value
Short sales and foreclosures can make a negative impact on a home’s appraised value
Consolidation in the appraisal industry has lowered product quality and may be harming valuations
One key take-away from the video is that home owners in Worcester County area should provide their home appraisers with as much relevant information as possible — especially information which may not be publicly-available. This includes records of recent “all-cash” sales of comparable homes which were never formally listed for sale.
One in three purchase agreements are canceled because of appraisal issues, according to the interview. Take steps to make sure yours is not among them.
For today’s home buyers and refinancing households, the value of “good credit” has never been higher.
Mortgage approvals hinge on your FICO score, as does your final mortgage pricing.
If you’re shopping for a home in Massachusetts , therefore, or contemplating a refinance, be aware of how everyday credit behaviors can affect your FICO. Even small events can make a big impact.
Here are some common-sense steps to help improve your credit score.
First, keep a “cushion” on your credit cards.
30 percent of your credit score is linked to “Amount Owed” and a big part of Amount Owed is a raw calculation of (1) What you owe in dollar terms, against (2) How much credit you have at your disposal. The credit bureaus want to see at least 70% of your credit “available”. (more…)
Nationwide, mortgage rates are low in Worcester County area and home prices remain relatively low, too. This combination, plus rising rents, is pushing renters in some cities — including Worcester County area — toward first-time homeownership.
With mortgage rates at all-time lows, purchase and refinance activity is climbing.
For today’s home buyers and refinancing households, the value of “good credit” has never been higher.