Search results matching tags 'brooklyn real estate blog' and 'mortgage rates'

Getting a Mortgage in Brooklyn (or anywhere else)? Lock-in the Rate!

213769 — Sun, 27 Jun 2010 03:04:00 GMT

Getting a Mortgage in Brooklyn (or anywhere else)? Lock-in the Rate!

The most important first step in purchasing a house is putting together a budget and knowing how much you can spend and what your monthly payments will be. When banks pre-qualify buyers (so to speak), in order to do so they have to look at the buyer's last two years tax returns, last three months bank statements and full factual credit report at a minimal level. The bank will form a ratio of your monthly living expense (mortgage payment, real estate taxes and homeowners insurance) vs your reported income.

Several years ago mortgage rates for a 30 year fixed mortgage were about 6%. At that time if you took a 30 year fixed mortgage at 6% for say $400,000.00 your mortgage payment would have been $2,400.00 per month. Right now (6/25/2010) mortgage rates are the lowest they have been in the history of man. Now you can get a 30 year fixed mortgage with a rate of about 4.375%. This means that if you borrow the same $400,000.00 now with the lower rate you will be paying just $1996.00 per month. Wow... a savings of over $400.00 per month!!

Combine that with the fact that prices in most areas are also down by at least 10% in most parts of Brooklyn over the past two years creates a fantastic buying opportunity for consumers right now. The house you were buying for $450,000.00 in 2008 can now be purchased (in most cases) for $410,000.00. When you take that and the lower mortgage rates into consideration, you would be saving almost $500.00 per month!

This is the first time ever that mortgage rates and home prices are both low relatively speaking. Usually home prices and mortgage rates act conversely. When rates go down prices go up and when rates go up prices go down. I think it is safe to assume that as we move forward, either mortgage rates or home prices will go up. Hence if you wait to buy, you may miss a great opportunity.

So in order purchase you need to prepare a budget and get yourself pre-qualified. Your best bet would be to meet with three banks with all the paperwork I mentioned above and have them run your credit. At that point the banks will be able to explain to you your options and what type of mortgage products they can offer you. Keep in mind that as a buyer you will also incur closing costs associated with your mortgage which generally will be about 5% of the actual loan amount. When you compare banks you have to take into consideration the actual rate they offer you and the closing costs to determine who is offering you the best deal. In addition to that, often times a bank will allow you to"buy down" the rate by paying extra points (1% of the loan amount). The only time you will want to consider doing that is if you are certain that you will not be paying off the loan for a long time.

Here is a list of questions to ask the banks when your getting pre-qualified:

1) What is the rate you can offer me?

2) How much are the closing costs?

3) Do I have to pay any points to get the rate you quoted?

4) Can I buy down the rate and if so how much would that cost?

5) How quickly can you get me a commitment once I put in an actual application?

6) Do you need any other paperwork from me?

7) What other types of loan products do I qualify for (as opposed to a 30 year fixed mortgage) and how will they benefit me?

8) Can I lock-in the rate you are quoting me? If so for how long does the lock-in last? Do I have to pay to lock-in?

With regard to number (8) above... most of the time when a bank quotes you a rate it is NOT locked in. This is because nobody knows how long it will take you to find a house you want to buy. Ultimately when you do negotiate a deal and go into contract to purchase a home, you will then be submitting your actual mortgage application to the bank. Because rates always go up and down, the bank will not be able to lock-in your rate until they know you are actually buying a house. Sometimes buyer chose not to lock-in the rate. In that case you will not know what rate you will actually get until the closing is set up. At that point in time the bank would set the rate at whatever the prevailing rates are (which could be anything, who knows). Sometimes the rate can be what the bank originally quoted, other times is can be very different so you have to be cautious. The best thing to do if you want to be sure is to ask what rate you will be given again at the time you submit your actual mortgage application to the bank. At that juncture, if you happy with the rate you should lock-in!

Here are some additional questions to ask when you lock-in:

1) How much do I have to pay to lock-in?

2) Will that lock-in fee be credited back to me at the closing (usually it will be!)?

3) How long does the lock-in last?

You want to make sure the lock-in will be good long enough for you to close. Speak to your attorney about that to make sure you have enough time. I hope you find this information helpful and informative. If you have a question regarding this blog entry or Brooklyn real estate in general, submit them to my blog or contact me direct. Thanks for reading!!

Sincerely,
Mitchell S. Feldman
Associate Broker/ Director of Sales
Madison Estates & Properties, Inc.
Office: (718) 645-1665/ Cell: (917) 805-0783
Email: MitchellSFeldman@aol.com
Web Site: www.MitchellFeldman.com and www.MadisonEstates.com

© Copyright by Mitchell Feldman. All Rights Reserved. Republication or redistribution of this material is expressly prohibited without prior written consent by Mitchell Feldman. This information is deemed reliable but not 100% guaranteed. Mitchell Feldman is not at attorney and therefore not able to give legal advice. If you are involved in a real estate transaction and have a question, besides speaking to Mitchell, you should also speak to your attorney.

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Mortgage Rates Sink to Historic Low Level in Brooklyn (and anywhere else!)! (12/04/2009)

213769 — Fri, 04 Dec 2009 20:04:00 GMT

Mortgage Rates Sink to Historic Low Level in Brooklyn (and anywhere else!)!

If you picked up today's New York Daily News (12/04/2009) and turned to page 62 you saw the article "Mortgage Rates Sink." The fact is that mortgage rates on a 30 year fixed loan as of today have dipped down to 4.71%. This is the lowest that mortgage rates have ever gone since finance giant Freddie Mac began tracking rates back in 1971! There was also an article about this in today's Chicago Tribune which you can read here:
http://www.chicagotribune.com/business/chi-tc-biz-rates-1203-1204-dec04,0,7133013.story

     This means that if qualified, you will be paying less than $520.00 for every $100,000 you borrow on a monthly basis. If you borrow $400,000 you would be paying only $2080.00. After you add in real estate taxes and homeowner's insurance you would still be spending less than $2,500.0 per month if you were to purchase a home in Brooklyn (based on average tax and insurance rates and a purchase price of $500,000 with 20% down). Combine that with the income tax write off you get when you purchase a home to be your primary residence and the end result is that it would cost you less to own a house than it would to rent!

     In addition and as per my last blog entry (www.homegain.com/blogs/mitchellsfeldman-507663/Homebuyer-Tax-Credit-is-Coming-Back-to-Brooklyn-or-anywhere-else-Better--Stronger) as a first time buyer you can get a $8,000 tax credit if you get into contract by April 30, 2010 and close before July 1, 2010 (some restrictions apply, read my previous blog entry). Even if you’re an existing homeowner selling your primary residence and purchasing another property, you will get a $6,500.00 tax credit (again, some restrictions apply, see my previous blog entry for more details).

     In my opinion the planets are aligned right now making it the perfect time to purchase. Home values have gone down over the past three years making today's prices very attractive and there are lots of homes to look at. Combining that with the fact that many buyers wait until the springtime to begin their home search opens up an opportunity for the buyers who are looking to have less competition. This puts the buyer in a stronger negotiating position.

     NOW IS THE TIME TO BUY! Think about it... What are the chances that interest rates will stay low, prices will stay down, inventory to remain high and competition among buyers to be low AND the government offering you thousands of dollars to go out and buy a house? If you’re a betting man, it all adds up to BUY NOW!

     Have an opinion or question, please submit them to this blog or contact me!

Mitchell Feldman
Associate Broker/Director of Sales
Madison Estates & Properties, Inc.
Office: (718) 645-1665/Cellular: (917) 805-0783
Email: MitchellSFeldman@aol.com
Web site: www.MitchellFeldman.com

© Copyright by Mitchell Feldman. All Rights Reserved. Republication or redistribution of this material is expressly prohibited without prior written consent by Mitchell Feldman. This information is deemed reliable but not 100% guaranteed. Mitchell Feldman is not at attorney and therefore not able to give legal advice. If you are involved in a real estate transaction and have a question, besides speaking to Mitchell, you should also speak to your attorney.

Mortgage Rates Sink to Historic Low Level in Brooklyn! (12/04/2009)

213769 — Fri, 04 Dec 2009 20:04:00 GMT