Now that FHA has announced that they are reducing the Monthly mortgage insurance premiums from 1.35% to .85% what does that mean for the average first time homebuyer? A buyer who is getting a mortgage of 300,000 would save $1,500 per year with the new rates.
"That is a substantial savings and will be very helpful for alot of first time homebuyers, but the bigger story is how it increases the borrowers purchasing power" says Joseph & Jared Garcia of Associated Mortgage Bankers located in Ronkonkama.
The same borrower that qualifies for a mortgage of $300,000 at the old rates would now qualify for approx $25,000 more with the new rates. This gives the purchaser more options. Anthony Garcia, Broker of Performance Residential Realty Corp. says with today's market and the limited inventory the extra purchasing power of 10-25 thousand really opens up the door and gives home buyers access to alot more inventory.
The change in MIP rates is a step in the right direction and loosens up the tight mortgage guidelines that borrowers face when they are buying a home. It allows buyers to have access to buy houses that they could not qualify for last month. While this isnt going to be a monumental swing it gives first time homebuyers an edge in a market that has them feeling like there is no inventory.
Every company has some sort of focus and way of doing things that takes up a lot of their attention. At Performance Residential Realty Corp we believe in customer service.
More specifically for our buyers we do our very best every time to get a customer into a home they want to see immediately. We feel it’s important to always be available for our customers and do everything in our power to confirm an appointment. Sometimes that means moving the day around, picking up a key at an inconvenient location, and being persistent in calling, texting, and emailing agents and sellers .
We know that our buyer’s schedules are sometimes limited and while it may be more convenient for us to postpone an appointment at a time that may work better for us we know that doesn’t help our customers. We believe in going the extra effort since any home could be our customers perfect home and the quicker they see it the better opportunity securing an accepted offer.
With the already increasing rates and the speculation that rates will continue to increase throughout 2014 there will be an effect on housing. The question becomes how much. We expect a minimal effect resulting in the higher interest rates but nothing that will drastically affect housing. The problem becomes the fact that the higher home prices increase and the higher the mortgage interest rates increase the less purchasing power buyers have and the less they qualify for.
300,000 loan amount at 4.75% interest rate= $1,565
300,000 loan amount at 5.75% interest rate = $1,750
*That is an increase of $185 per month
Let’s assume that a buyer is buying at the maximum they qualify for and was quoted a rate of 4.75%. That buyer was told that the principle and interest portion can’t exceed $1,565 per month in order to obtain financing. If rates increase 1% and are now at 5.75% than the buyer will qualify for approx 32,000 less than he did when the rates were at 4.75%. The reason for that is because there is more interest that takes up more of the $1,565 a month the buyer is qualified for.
Although research shows that most people don’t believe in ghosts, they are still reluctant to purchasing one; although to some the thought of buying a haunted house would be intriguing.
If you’re thinking of purchasing a home but its appearance kind of has you on the spooked side just do some research on the property. DiedInHouse.com is good website to find out if your dream home is a scream home!
In a real estate transaction there are realtors, attorney’s, home inspectors, loan officers, bank attorney’s, title companies, appraisers that are all involved at some point in time. With a buyer or seller depending on all these people it’s important that there is a quarterback who is making sure everything goes smoothly and if it doesn’t there needs to be a solution maker. “You will be surprised how many realtors get the deal accepted, pass the info to the attorneys, and simply ask to be notified when the closing date is” says Anthony Garcia, Broker at Performance Residential Realty Corp. Even in a smooth real estate transaction there are issues that come up and it’s important that your realtor will stay engaged and take care of the issues as they come up. It’s also crucial that the realtor has the broad knowledge and experience to be able to have conversations with all the above mentioned parties to fix any problems that incur. A lot of times a realtor will not get involved because they just don’t know how to fix the problem there for they need to rely on someone else like busy attorneys to take care of it.