Proper Use of Interrobangs and Mortgage Brokers

Have you ever written a question in a text or email with such excitement you weren’t sure if you should punctuate it with a question mark or an exclamation point?

For example: Did you see the World Series last night?!
or
Did you hear who’s running for governor?!
or
Can you believe he baked that cake by himself?!

The combined use of question mark and exclamation point is seen frequently. But did you know that in 1962, American ad man, Martin Spekter, created a hybrid of those two marks and called it the interrobang? It looks like this:

Wouldn’t it be useful to have this punctuation mark at your disposal? And now that you know how to properly use it, your life just got a little easier, didn’t it?

Mortgage brokers are a lot like interrobangs. Most people don’t always see the benefit and some have no idea of how they work. Also, mortgage brokers work in two capacities. First, we act like a financial coach, understanding the macro view of your finances. Next we act like detectives, drilling down to a micro view that finds you a mortgage that makes the most sense, saves you money or creates a better cash flow.

The dedication of a highly qualified mortgage professional can be the difference between buying a home you can afford and taking on too much debt. Using a mortgage broker for the first time will open your eyes to all the options, suggestions, and caveats that come with the largest asset you may ever own. Can you imagine how much money and stress you’d save?!

Ready to buy a new home or refinance the one you own? Please get in touch and I’ll be happy to answer your questions and help guide you through the process. I look forward to speaking with you.


Happy Halloween, friends!

It may be snowing, and we may have had the strangest year ever, but before the major holidays we pay tribute all things spooky.

Here are some Halloween trivia tidbits to talk about while you’re eating candy corn and sitting six feet apart.

  1. Not only is Halloween happening on a Saturday, but it’s also a full moon.
  2. In fact, it’s a blue moon, which means it’s the second full moon of the month, which only occurs once every 2.7 years (aka “once in a blue moon”).
  3. Which country had the first Halloween? Ireland.
  4. The word “bonfire” combines which two words? “Bone” and “Fire.” Spoooooky!
  5. Before pumpkins became the standard, the original jack-o-lanterns were made from which vegetable? Turnips.
  6. From which region of the world did pumpkins originate? Central America.

Halloween Home Improver: White Vinegar: Let’s Make Some Slime for Halloween!

Oh, boy. You did it again, didn’t you? You planned the perfect kids’ Halloween party and you forgot to buy the slime. And now it’s too late to hit up Party City because they’ve sold all their slime for the season.

No worries, we’ve got your back with a homemade slime recipe that’s easy and fun. Perfect ghoulish fun for the kiddos.
You’ll need:

  • 1 6-oz bottle of white liquid all-purpose glue
  • 1/2 teaspoon baking soda
  • 1½ tablespoon buffered or multipurpose contact lens solution
  • A few drops of liquid food coloring to give your slime color
  • 2 tbsp up to 1/2 cup warm water to make your slime stretchier and oozier.

Pour the glue into a bowl. In a separate small bowl or measuring cup, add the baking soda, contact lens solution and food coloring, if you are using it. Combine the baking soda solution with the glue and mix with a spoon or with your hands. The slime will feel sticky at first, but will get less so with additional kneading. Adjust the texture to your preference by adding a pinch more baking soda for firmer slime and a bit more water for oozier slime – we suggest oozier slime. It’s Halloween after all! (Recipe Source: Arm & Hammer)

 

Is Zillow the Uber of Real Estate?

There’s no question that Zillow.com has evolved from a real estate curiosity to a major player in the industry. While some may think of it as a starting point for future homebuyers or simply an entertaining way for house-hunters to kill some time online, Zillow is emerging as a force that could disrupt the entire real estate process. In fact, it already has.

If you’re wondering if Zillow will eventually displace real estate agents, I suppose it’s possible, though highly unlikely — and it would be years away if Zillow were to consider such a pivot.

The more likely lasting scenario is their current model, which uses real estate agents the way Uber uses vetted drivers to close business for them.

Here’s how it works: Zillow sells leads to agents backed by large real estate brokers like Keller Williams, Re/Max and Coldwell Banker. Users sign up and explore locales where they want to buy. Zillow provides their “Zestimate,” which is sometimes less of an estimate and more of a guesstimate. Eventually, Zillow will suggest one of their recommended agents to work with the homebuyer, gather as much accurate data as they can and seal the deal. So the agent gets paid, but so does the broker and now Zillow gets their cut.

Now, whether these agents are any good at selling is no guarantee. The agents Zillow recommends are the ones paying thousands of dollars a year for leads. They are not necessarily the cream of the crop, though some are. Bottom line: it’s a crapshoot.

And that’s the risk you take when starting with software rather than a human. Real estate is almost always an emotional purchase and you need a sentient human to make it all work. Zillow knows that and that’s why they invest in human capital to power their sales engine. At least for now.

Ready to buy a new home or refinance the one you own? Please get in touch and I’ll be happy to answer your questions and help guide you through the process. I look forward to speaking with you.

Credit Card Debt is Up Again. Now What?

When the bottom dropped out of the market in 2009, people became more careful about spending and accumulating debt. But once the economy started improving, consumers felt more comfortable about spending. Now, eight years later, we are seeing a return to our less careful days of money management. In fact, we’re setting new records of debt.

In June, Americans officially logged their highest collective debt in history. Of the $1.021 trillion in outstanding revolving credit, $1 trillion of it is credit card debt. This tops the previous record of $1.020 trillion, back in the carefree spending days of April, 2008.

Yikes! What does it all mean in the world of mortgages?

For one thing, it could effect your ability to secure your mortgage. According to a recent report, credit card delinquency is up to 4.4% and may be trending toward the 8% or more reached during the recession.

This is a wake-up call to consumers and specifically homebuyers. With more access to credit cards, people are spending money they don’t have and paying a major price for it, both literally and figuratively.

When I work with homebuyers, I look for three things: Credit, Cash and Capacity. Let’s start with credit. Lower credit scores, combined with the loan-to-value ratio, can affect the interest rate that you’d be eligible for. If your credit is not stellar, buying a home is not impossible, and this is where working with me can make a big difference in your homebuying experience.

When it comes to cash, I encourage buyers to make sure they have a cushion beyond the purchase to replace and/or upgrade parts of their home, whether it’s the air conditioning, a new bathroom or an unexpected but necessary home improvement project.

Finally, and perhaps most important, is capacity. Have you developed a saving discipline over time that prepares you to take on your largest debt? For new homebuyers, I look at their bill-paying history from the bottom up. Starting with small monthly debts like rent and utilities; followed by credit cards and auto loans. If you’re having trouble making these monthly payments, I may advise you that now may not be the best time to buy. I feel it’s my responsibility to guide you in the right direction. If I see potential problems with making your monthly mortgage payment, I’ll let you know.

So what can you do if you’re concerned about taking on the debt of a mortgage? Pre-planning is the key. People don’t always jump right into parenthood. They start to learn to nurture at a young age. First a goldfish, then a cat, then a dog, then a baby. The same is true with homebuying. Take the time to pay down your debt and bring up your credit score. Make all your payments early or on time every month. These actions will put you in a more responsibly deserving place to take on debt you can comfortably control and pay off in a timely manner.

Ready to buy a new home or refinance the one you own? Please get in touch and I’ll be happy to answer your questions and help guide you through the process. I look forward to speaking with you.

When is an ARM Better Than a Fixed?

The world of mortgages has a short menu. Will it be an Adjustable Rate Mortgage (ARM) or a Fixed Rate Mortgage? You’ll often hear people say that a fixed-rate mortgage is always the best move
— that’s not necessarily the truth. Homebuyers sometimes have unique circumstances that allow them to take advantage of the initial lower rate of an ARM.

First, let’s distinguish between the two. The interest rate of a fixed-rate mortgage never changes. An adjustable-rate mortgage, on the other hand, resets its interest rate at pre-specified times. For example, a “7/1 ARM” indicates the interest rate is locked in for the first seven years and adjusts annually after year seven. Because rates have been lower in recent times, homeowners generally opt for a 30-year fixed-rate mortgage to lock in that low rate for the life of the loan.

So when might it make more sense to go with an ARM? Here are a few scenarios:
Changing Cities, Changing Jobs. If you think you’ll be moving within a short time frame but prefer not to rent, an ARM is option that could work very well. For example, a student who’s doing a medical residency may wind up practicing in another state after she graduates. Because she’s uncertain where she’ll land after graduation, an ARM may be the better choice for a few years.
Investment Property. If you’re buying an investment property but only plan to hold onto it for a limited period, why not take the lower rate?
Salary Bump. If your budget is stretched now, but you’re confident your salary will increase in the next 5-7 years, you could start with an ARM and then refinance your mortgage before the rate goes up.
First-time Homebuyers. In cases where financing a 30-year fixed is not a viable option, first-time homebuyers may choose an ARM and either sell or refinance later.
While ARMs usually have caps in place for rate increases, there are usually no caps or limits to how much the first adjustment after the reset point will be. If you wind up staying beyond the first interval of your ARM, you could face a larger rate increase than you can afford. This is why we only recommend ARMs for the short term, even though it’s entirely possible the rate could adjust down.

Ready to buy a new home or refinance the one you own? Please get in touch and I’ll be happy to answer your questions and help guide you through the process. I look forward to speaking with you.

3 Downpayment Myths Debunked

When it comes to mortgage downpayments, there seems to be some confusion about how much you really need to put down on a new property. Let’s take a look at three common misconceptions.

1. The 20% Rule. If you were to ask the average person on the street about downpayments, the majority of them would say 20% is required. While 20% is a common guideline, it’s not necessarily the reality. In fact, there are a number of low downpayment programs available.

2. It Has to be ONLY my money. Gift funds are a great option. A gift may be provided by a spouse, child, or anyone related to the borrower. It must specify the dollar amount and an official gift letter is required stating that the funds were a gift and no repayment is expected.

3. First-time Homebuyers Only. While the industry has always encouraged first-time homebuyers, it’s a myth to think current and previous homeowners will be forced to submit 20% and not a penny less. I have worked with numerous clients over the years who have preferred a smaller downpayment so they can keep some money for repairs and additions to their new home.

Don’t be fooled by these misconceptions that have seeped into the general consciousness. There are more options for low downpayments than you may have imagined. If you or someone you know would like to explore the possibility of a low downpayment option, I can help. Call me at 617-965-1236.

Ready to buy a new home or refinance the one you own? Please get in touch and I’ll be happy to answer your questions and help guide you through the process. I look forward to speaking with you.

The One Question That Saves Thousands of Dollars

I’ve been working with homeowners for many years and I discovered long ago that eager buyers set themselves up to fail by taking the wrong approach in their excitement of making what is often the largest purchase of their lives.

Whether I’m advising couples, divorced women, single men or anyone else across all demographics, the majority of these home buyers start house-hunting with the amount of money in mind that has been determined with their pre-approval. It’s a mistake and can lead to serious financial issues.

The question I start with is a simple one: What do you need to live happily and comfortably over the next several years? That change of mindset–focusing on their needs rather than what the bank tells them they can afford–makes a huge difference.

Let’s face it: in many ways, we are a nation of impulse buyers. Why buy a Toyota when you can buy a Lexus, right? I’ll tell you why. Because you can’t afford it. You only think you can.

First-time homebuyers often find themselves in serious debt when they learn of unexpected costs to maintain their homes in addition to their monthly mortgage payment, property taxes, utility bills and more. Then suddenly one winter they have ice dams and roof repairs and mold remediation. The typical homebuyer thinks of a dream home, not a nightmare scenario that stretches their budget to the limit and beyond.

When buyers work with me they have a professional who helps them make practical decisions that will serve them well over the life of the mortgage. Consider me the reality check you never asked for, but really need. You can’t put a price on good advice, but you can always afford it. I’m happy to help.

Ready to buy a new home or refinance the one you own? Please get in touch and I’ll be happy to answer your questions and help guide you through the process. I look forward to speaking with you.

Second Home vs. Investment Property

If you ever hear someone say they are interested in buying a second home as an investment property, stop them right there. A second home and an investment property are not the same thing. There are several distinctions that set them apart. Let’s take a look.

A second home is just what it sounds like: another location for you to reside at various times of the year. So let’s say you own a home in Needham but you’re interested in buying a winter home in Miami. That falls into the “second home” classification.

An investment property, on the other hand, is intended to generate a return on investment, either through rental income or resale (or both). Examples of investment properties include two-family houses and renovation/flipping projects.

To avoid charges of fraud, your second home should be a considerable distance from your primary residence. The rule of thumb is approximately 50 miles (Wellesley to the Cape, for example, is about 80 or 90 miles.) A two-family second home is unlikely to be approved because it is, by design, intended to be a revenue generating property.

A downpayment on a second home carries less risk and therefore may be the home purchase you can make with the least amount of money down. Your downpayment on an investment property, however, will be higher because the risk is higher. The two-family investment is viewed as a risk by the banks because you’ll be counting on the rent coming in. There’s no guarantee of tenant reliability or year-round occupancy.

I hope this helps clear up any confusion. If you need further clarification, please contact me at 617-965-1236.

Ready to buy a new home or refinance the one you own? Please get in touch and I’ll be happy to answer your questions and help guide you through the process. I look forward to speaking with you.

FHFA Increasing Loan Limits in 2017

There’s some good news for those homebuyers looking for a larger loan amount in 2017. The Federal Housing Finance Agency recently announced that loan limits for are rising. The limit on conforming loans moves up from $417,000 to $424,100. This is the first increase in the baseline loan limit since 2006. That’s good news for those of us in the industry, but it’s better news for homebuyers.

A conforming loan — not to be confused with a conventional loan — is a mortgage loan that follows Fannie Mae guidelines. On its surface a $7000 increase may not seem like much when considering a $400,000 mortgage, but that extra bit of cash can come in very handy for those seeking the best financial advantage as possible when purchasing a new home.

Loans that exceed this new limit are considered high balance loans. This translates to higher pricing with the least flexibility. Staying under the cap will get a mortgage with the most underwriting and highest flexibility. Nonconforming or jumbo loans carry a higher interest rate than conforming loans, increasing monthly payments and negatively impacting affordability.

The new loan limit will allow more buyers to borrow more money without having to put more money down. Homeowners can refinance bigger loan sizes while staying within the conforming loan limits.

This increase comes at a time when mortgage rates have increased slightly to just over 4.0%. That’s still an excellent rate, compared to 6% in 2008 and 8% in 2000.

This bodes well for the real estate industry as a whole, with the Federal Housing Finance Agency showing greater confidence in the recovery of home prices across the country. 2017 will be another great year for homebuyers.

Ready to buy a new home or refinance the one you own? Please get in touch and I’ll be happy to answer your questions and help guide you through the process. I look forward to speaking with you.

3 Ways to Stay Ahead of the Competition

Just because you’ve found the home of your dreams doesn’t mean you’re going to move into it. Many factors including price, location, inventory and time of year may bring in multiple offers from eager buyers. So how can you gain an advantage over the competition? Here are three helpful tips:

1. Pre-approval. Before you even start looking for homes, meeting with your mortgage professional is critical. A pre-approval means you have provided documentation of income and assets. This is different from pre-qualifying, which is typically done in conversation wherein you talk about your income and assets. It’s virtually meaningless until you back up what you say with the paperwork for pre-approval. Also, you should know how much you’re willing to put down. The stronger the downpayment, the more confidence the seller has in you and your offer.

2. Waive the Home Inspection. This saves time and money, but is it smart? There is a way around it. Bring a home inspector to the Open House. While you’re checking out the size of the bathroom and imagining your furniture in this house, your home inspector is walking around checking for things like termite or water damage, asbestos, knob-and-tube wiring, heating and AC issues and more.

3. Write a Personal Letter. You may not realize it, but selling a home can be just as stressful to the owner as it is to the buyer. By writing a personal letter, you are making an emotional appeal to a seller who is probably feeling sentimental about the home. Talk about how you would want to raise your family in this home just as they did; that you want your kids to benefit from attending the same school as their kids. Make a genuine appeal that ties your future to their past and that just might be what tips the scales in your favor.

Of course, there are no guarantees. But these suggestions have proven successful for many happy new homeowners. For more ideas, please give me a call at 617-965-1236.

February’s Home Improver
Re-painting Kitchen Cabinets

Replacing your kitchen cabinets can be cost-prohibitive. But what can you do when your formerly new cabinets have lost their looks over the years? If you’re up to the task, painting your cabinets can make them look like new for much less than the cost of replacing them.

Here are step-by-step directions:

1. Remove the cabinet doors and hardware. (Tip: Put a note on each one indicating location so they’ll go back in the right places.)

2. Clean all cabinet surfaces and allow them to dry completely.

3. Sand down the surfaces enough so that the paint adheres and lays flat.

4. Apply primer-sealer first. Let to dry, before painting.

5. Apply paint with a spray, brush or roller (for flat surfaces only). Let it dry. Put hardware back on doors and hang them on the cabinets.

Remember to use a drop cloth and tape off the areas around the cabinets. If you think a project like this is beyond your skill set or patience, hiring a professional painter will still cost significantly less than bringing in all new custom cabinetry. Good luck!

What Is a PLA and How Can It Be Used for a Downpayment?

I’m always looking for creative solutions to help my clients purchase their homes. One of the most common obstacles, particularly for divorced women, is coming up with the downpayment. I asked my good friend, Jay Gordon, of the Popper-Gordon Group at Morgan Stanley, if he had any ideas to share.
He suggested creating a Portfolio Loan Account (PLA). This can be set up to borrow against most account types at Morgan Stanley, with a few exceptions.
Provided that you maintain a certain level of collateral, a PLA can give you the line of credit you need to cover your downpayment. In most cases, there are minimal or no fees to set up your PLA and it can be established in a week or two, without a lot of paperwork.
If you’re concerned about the plan to repay the loan, there is good news: the repayment structure is flexible, offering variable and fixed rate options. Variable rate PLAs can be paid off in full at any time with no penalty.
Upon approval of your PLA, you will have immediate access to your line of credit by writing a check or wiring funds when needed. You won’t need to reapply each time you borrow against the PLA. There is no obligation or penalty if for any reason you decide not to use your line of credit.
If this option for liquidity makes sense for you, or if you have any questions regarding a portfolio loan account, please contact me at 617-965-1236.

October’s Home Value Improver

Outdoor Lighting for Safety and Curb Appeal

At this time of year, you may find yourself driving to work in the dark and driving home in the dark. This is a good time to view your home when the sun is not shining on it. How is the lighting? Are the walkways safe? Does your home have good curb appeal? Is it lit well enough to keep intruders away? These are important questions to ask, especially for divorced women who are single moms. Good lighting is used for more than beautifying your home. It’s also an important safety measure that all homeowners need to consider.

Here are some creative tips for outdoor lighting:

1. Pathway Lights. If there is a pathway to your front door, be sure to properly light it to avoid tripping on uneven pavement or avoiding ice that can cause slip-and-fall accidents. You don’t need very bright fixtures, but enough light to safely guide people to your door.

2. Patio Lights. Use indirect light for outdoor gatherings. Cool bulbs rather than harsh light make for a more comfortable outdoor event.

3. Doorway Lights. Install two small lanterns on either side of your door frame. For larger entryways, consider this option, but add a hanging lantern, centered above the door.

4. Landscape Lighting. If your home is set back from the street, it is recommended to have landscape lighting. A well-lit home without any landscape lights can look isolated and appear standoffish to your new neighbors. A few simple lanterns emitting soft white light will make a noticeable difference.

If you are looking for an outdoor lighting expert, I am happy to recommend one of my most trusted contacts. Call me at 617-965-1236.