The Effect of Coronavirus On Mortgages

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There is no question the coronavrius pandemic has had a severe impact on our daily lives. Financially, it’s brought a very strong economy into a recession almost overnight. In the past three weeks more than 17 million U.S. workers filed for unemployment after a staggering number of layoffs.

Real estate sales slowed during stay-at-home orders and as of April 5, new home listings were down 27% nationally year-over-year.

You may have heard talk of the Fed cutting rates to 0%. Let’s be clear, though, that mortgage rates and the Fed’s rates are two different things. But there is some good news for buyers. Two weeks ago, the rates for a 30-year fixed-rate mortgage dropped to 3.29%, hitting an all-time low. This week, they rose to 3.33%, but that’s still significantly lower than the very reasonable 4.12% from a year ago.

While a low rate may make purchasing a new home or refinancing your existing one a desirable option, there are things you should consider. Is your job and income secure? (That may be difficult to answer given the uncertainty of what’s to come.) Do you have assets and savings along with good credit? This is particularly important now because banks may be more stringent than ever in approving mortgage applications.

This is where I can help. I know how to navigate towards a mortgage approval in difficult times. I have experience and success working with clients in the post-9/11 economy as well as during the recession in 2009. This is a similar situation and together we can figure out if buying now is right for you, your family, or friends.

We’ll get through this as we have in the past. We have learned hard lessons and that makes us more equipped to take on challenges as we adjust to the new economy.

I wish you all good health and if I can be of any help to you myself or through my trusted network, please 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.

Tips for Making Staying Home More Interesting

If you are a non-essential worker and you find yourself housebound during the coronavirus, you may find yourself getting restless. If you live alone, you may feel isolated and if you have a family, you may feel like there’s no escape from the kids running around and looking for something to do. After all, how much Tiger King can you take?

Here are some ideas to make your 24/7 stay-at-home life a little more interesting.

  1. Learn something new. Watch a TED Talk every day.
  2. Start a blog on Medium and get paid for if it takes off. Or just read the thousands of articles published daily.
  3. Update your résumé and use free Canva templates to get creative with it.
  4. Self-publish that book that’s been sitting on your computer for free with Kindle Direct Publishing.
  5. Have fun with leftovers and miscellaneous food items and stage a “Chopped” competition with your family.
  6. Try 63 science experiments with the kids using stuff from around the house.
  7. Do the Getty Museum challenge. It’s becoming very popular! Use household items to recreate famous works of art.
  8. Have Virtual Happy Hour with friends (for adults) and Virtual play dates (for the kids) with Zoom or Google Hangouts.
  9. Plan a scavenger hunt in your house by hiding items in different rooms and have the kids hunt them down.
  10. Try a free 30-day yoga challenge.

April’s Home Improver: Spring Cleaning & Donating

Since most non-essential workers are spending more time at home than they have in years, we’re hearing of a lot of small home improvement projects. But most of all, people are keeping busy with spring cleaning. You may notice you have quite a few things in your home that you no longer use or need. Donating to charities can give your possessions a second life while decluttering your home. Here are a few ideas of places to donate.

  1. Non-perishable foods. Local food pantries are always in need of non-perishable items. If you have canned goods you’ll probably never use as you clean out the cupboard, you can always donate them to a food pantry in your neighborhood.
  2. Old books. For those who prefer paper books to Kindle or Apple e-books, you may have accumulated a stockpile of novels you no longer need. Why not donate them to the military? Check out Operation Paperback and send some books to our troops!
  3. Old clothes. If you have gone through your closets and realized you’ve got clothes in good shape that you and your family will probably never wear again, you can always make a donation to a charity that will gladly accept them along with other household items you may want to donate. Here is a list of charities you can help.

Is Zillow the Uber of Real Estate?

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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.

If Money Doesn’t Buy Happiness, What Does?

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With the Powerball jackpot now over a billion dollars, many people purchasing tickets have fantasized about how incredible life would be if they somehow managed to beat the 292-million-to-1 odds and won the biggest lottery payout ever.

It would truly be amazing and it would certainly present opportunities that the average person could never imagine. But don’t be discouraged if/when you don’t win. After all, wealth and happiness are two very different concepts.

A recent article in the Wall Street Journal discussed a survey of divorced women and their relationship with money. The majority of the women polled felt that they were more secure about their finances than when they were married.

This may seem incongruent, given that most of the women left a two-income household. Now, with less money and more responsibility, they feel more content.

How can this be?

The answer is control. Many women do not have enough of a say regarding their finances while married and they have little control over their spouse’s spending. The author went on to point out a poll that mentions financial issues as the leading cause of divorce, ahead of compatibility. It makes sense that divorced women with less money but more control over their spending could very well be more content than they were in their marriage.

Do you have a friend or relative who is newly divorced or considering the possibility? I can give her expert guidance on securing the mortgage that works best for her.

For those of you who are already content but want more, there’s always Powerball. Good luck!

If you have questions about mortgages or you are preparing to purchase a new home, please get in touch and I’ll be happy to help guide you through the process. I look forward to speaking with you.

January’s Home Improver

Marie Kondo’s Tips for Tidying

Even though we’re still a couple of cold and snowy months away from spring cleaning, your home may look its most cluttered in the winter. Boots, bulky coats and snow shovels are all within reach when they are normally in storage most of the year. Snowed-in kids break out their toys and games and many don’t put them back as neatly as they found them.

Marie Kondo is the author of the bestselling book, “The Life-Changing Magic of Tidying Up.” It has been at or near the top of the nonfiction chart for over a year. Here are some of her rules for decluttering:

  • Declutter not by room, but by category. Start with the easy stuff (old documents) and proceed to the things that are more difficult to part with (photos and mementos).
  • Only keep items that “spark joy.” Ask yourself that question when you pick up each item.
  • Rather than looking at what you want to get rid of, choose only the items you need to keep. Are they truly necessary?
  • Fold and store things carefully in drawers to maximize space. There are many YouTube videos demonstrating her technique.

Have fun decluttering and tidying your home!

Understanding the Generational and Cultural Perception of Debt

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Debt is a four-letter word. Many people won’t talk about it, much less take it on, but you may be surprised to know that debt can be a good thing.
Millennials hate debt, probably because they are drowning in it, primarily from high college loans, auto loans and high-interest credit cards. The debt they have amassed at a young age has kept them from buying homes. Instead they’re opting to rent or just live with mom and dad longer than expected, which is leading to a later start on marriage and family.
Debt is not exclusively generational; it’s cultural, too. Many people who come to the United States are surprised by the “debt culture” here. They tend to avoid debt at all possible costs. Many immigrant families don’t use credit or debit cards. Everything is paid in cash. They rent, save money efficiently and pay everything off quickly. A loan? That’s another four-letter word they avoid.
But there is a difference between “good” and “bad” debt. Anything that depreciates over time is considered bad debt. An auto loan, for example, may be necessary, but your car will be worth much less than what you paid for it at the end of the loan. A home loan, on the other hand, is an investment. A manageable mortgage will leave you with a higher property value on the day of your final mortgage payment. Because property values always increase over time, real estate is one of the safest investments you can make.
Mortgages allow for the redistribution of financial assets over time. They free up cash to pay for those life events that cause those poor young Millennials to struggle in the first place. With interest rates at just under 4%, a home loan is the cheapest money you can borrow.
When it comes to debt, it’s all about perception. Knowing the difference between good and bad debt is a start. I can help you or your children find the right mortgage that will begin what may be the most important investment of their lives.

Please get in touch and I’ll be happy to help guide you through the process and answer your questions. I look forward to helping you.

November’s Home Improver

Tips to Keep Your Home Out of Probate

Guest Article by Lauren E Miller, Esq.

You may have heard stories before of homes that are “stuck” in probate. But what does this mean? What is probate, and should you avoid it? If you are interested in learning the answers to these questions, then read on!
Probate property is any property that is held in your sole name at death. After you pass away, probate is the process through which your assets are transferred to your named beneficiaries (if you have a will) or to your heirs (if you pass away without a will). In the case of your home, the way it is titled on your deed determines whether or not your home is a probate asset.
So what are some examples of ways to title your home that will not avoid probate?
1. Your sole name. If your deed has your name only, and you pass away, your home becomes a probate asset.
2. Multiple names as tenants in common. Unlike “joint tenants,”ownership as “tenants in common”does not include the right of survivorship. For example, let’s say that you and your sibling have equal ownership in a home that you inherited from your parents, as tenants in common. If you die, your fifty percent share will go to your beneficiaries or heirs, and not to your sibling. This means that your 50% share must go through probate.
Here are some ways to title your home that will avoid probate:
1. Joint tenants with right of survivorship. This title allows a property to pass directly to the other person(s) named on the deed.
2. Tenants by the entirety. This type of ownership functions similarly to joint tenants, but is a special title only allowed for married couples. Tenants by the entirety ownership also takes advantage of certain asset protection rules created specifically for married couples.
3. Title in the name of a trust. The are various types of trusts, many of which allow your assets to bypass the probate process.  If your title is in the name of the trustee of your trust, your home can avoid the probate process. Please note: simply having a trust does NOT mean that your house will avoid probate, your house must be placed into the trust before you pass away. If you have questions regarding a specific trust, please consult an attorney.
Okay, so now you know ways to title your home to avoid probate, but why should you care?  Probate is a long and costly process. Most probates in Massachusetts take a minimum of one year. Any assets that must go through probate are inaccessible to the heirs or beneficiaries for months after you have passed away, and real estate cannot be sold right away either.
Now that you understand the basics of how probate works for real estate, ask yourself: Is my home titled to avoid probate?
If you have questions regarding keeping your home out of probate, please contact Lauren E. Miller, Esq., of Ladimer Law Office, PC at (508) 620-4565 or at lmiller@ladimerlaw.com.

You Don’t Need a Spouse to Buy a House

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Real estate trends occur for many reasons. The economy is often a factor, but other influences determine changes in demographics. The steady increase of women choosing career over family, combined with fewer couples marrying — or staying married — has led to a rising trend of single women buying homes.
The National Association of Realtors recently published statistics showing that single women account for 23% of first-time home buyers. That’s significant growth in a category that has slowly but steadily risen since the late 1990s. In contrast, single men make up just 15% of first-time home buyers.
What about repeat buyers, you ask? The numbers remain in line. Single women comprise 15%, while single men account for just 8% of second time (or more) home purchases.
With divorces and the overall slowdown of marriages leaving more single adults in the market for housing, it’s easy to see why single women are buying more homes on their own than ever before. Back in the ’90s, 52% of first-time buyers were married couples. Today that number is just 40%.
These statistics reflect my client base. It is very common for divorced or single women to contact me about buying a home. Some have children and some do not. What they don’t have is a spouse.
As this demographic grows, it presents more opportunities for me to help these women make smart financial choices about their mortgages. I love helping them understand the process and make good decisions for themselves, their finances, and their future.
If you know a single woman who is tired of renting or is divorcing and wants to know their options for buying a home, please have them get in touch with me for a consultation. I would be more than happy to answer their questions.

September’s Home Improver

Get Your Mind Into the Gutter

The fall is unforgiving when it comes to clogged gutters. If you haven’t already cleaned them out in the past few weeks, you should take care of it as soon as you are able. Leaves will be falling before you know it and if your gutters are already clogged, you may experience some unexpected damage to your home.
Here’s why:
Your gutters and downspouts control the flow of rainwater around your home. When they are clogged, the excess water has nowhere to go. This often causes the exterior of your home to decay prematurely and the cost for repair is typically much larger than the cost to pay a professional to clear your gutters. Notice more mosquitoes around the house than usual? Standing water in your gutters is a literal breeding ground for those pests.
You may think that the summer doesn’t add leaves so the gutters are probably fine. However, soil accumulated from the winter and spring can cause weeds to grow and thrive in the gutter and downspouts, causing heavy blockages even before the first fall leaves begin to change colors.
If you think you’ve got nothing to worry about because there aren’t many trees in your area, think again–especially if you happen to own a house with asphalt shingles. The granules in the shingles fall away during harsh weather and make their way into gutters and downspouts. Remember that brief but battering August hailstorm? That may have triggered an asphalt granule mini avalanche.
For all of these reasons, it is well worth taking the time to have your gutters thoroughly inspected and cleaned.

Why National Mortgage Trends Are Irrelevant

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You may have read an article in The Wall Street Journal or watched Diane Sawyer on ABC talking about housing market trends and alerting you of the best times to buy or sell your home. While the trends may be accurate on a national level, they may be entirely different when you consider them from a local — or even regional — perspective.

There are a few factors that cause these incongruities between national and regional trends. This past winter was so oppressively cold that only a few brave souls were diligently working on buying or selling their homes. This left the northeast region behind some other regions in home sales. Now that the weather has improved, we’re seeing a market correction, of sorts. More people are aggressively vying to buy in a market with limited inventory.

According to the National Association of Home Builders, the Housing Opportunity Index (HOI) for a given area is defined as “the share of homes sold in that area that would have been affordable to a family earning the local median income, based on standard mortgage underwriting criteria.”

HOI is a good indicator of determining trends because it takes both median income and affordability into consideration. Statistics show that Boston’s HOI has been in decline since 2012, largely due to a decrease in median household income combined with an increase in the median price for home sales. Nationally, the average percentage of affordable homes is 66%. Locally, the percentage is just 51%, a full 15% lower than the national numbers.

We can conclude from this that national numbers can’t be assumed to coincide with the local Massachusetts housing market. So when Diane Sawyer tells you to buy, sell or hold tight, it’s best to contact me for advice that comes from a locally informed source. I will gladly discuss all the concerns you have about timing your new home purchase and give you the best advice for your individual needs.

 

July’s Home Value Improver

Garden Pest Terminator: The Ladybug

Are you fighting a losing battle in your garden? Are the bugs eating your vegetables before you get a chance to enjoy them?

It’s no wonder farmers turn to pesticides to eradicate those flying and crawling garden pests. But half the fun of raising your fruits and vegetables yourself is to enjoy your own completely organic, toxin-free foods. So what’s an enterprising gardener to do? The solution: Ditch the pesticides and order up a big batch of ladybugs.

The ladybug is a natural, cost-effective eliminator of common garden pests. They especially love aphids, but will consume other bugs, worms and mites. They may come in a cute package, but they are a generalist predator and will keep your unwanted bug population under control.

You can pick up your ladybugs at some garden centers or you can simply order them online from Amazon (yes, they really have everything at Amazon, including boxes of 1500 live ladybugs, costing under $20).

Once your ladybugs arrive, wait until evening. Watering your plants before releasing them is a good idea, as the ladybugs may feel dehydrated from being in captivity. Doing this at night gives your ladybugs the best chance to remain in your garden as they acclimate themselves quietly overnight.

Will your ladybugs fly away? Yes, many will. However, the ones that stay will almost immediately start laying eggs, keeping your ladybug population flourishing. If you happen to notice a small black and red insect that looks like a spiny little alligator, that’s a ladybug larva. They may start off homely, but they hatch ready to eat your unwanted bugs.

Put those ladybugs to work and enjoy the harvest of your own organic garden.


Mortgage Trends 2013

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Where will mortgage rates head this year? Will the housing market pick up steam? Will the economy strengthen? We’ve gotten through January (and avoided the fiscal cliff), and while there’s still talk about debt ceilings and minting trillion dollar coins, I DO think it’s safe to make these predictions for 2013.

Prediction #1: Refinancings Will Remain Strong Mortgage rates should stay extraordinarily low unless the economy becomes much stronger than anticipated. Even borrowers who refinanced just a couple of years ago will be tempted by interest rates in the low-to-mid 3% range. During 2012, 80% of my loans were refinancing. I expect this trend to continue this year.

Prediction #2: Shorter Term Loans Will Continue to be Popular Rock-bottom rates take the sting out of refinancing to a shorter term. Monthly payments on a 30-year loan at 5% may be almost the same as the payments on a 20-year or 15-year loan at rates in the 3% range. Many of my clients are selecting shorter term mortgages that will be paid off before college tuitions hit or retirement arrives.

Prediction #3: Paperwork Will Continue to Increase Lenders are scrutinizing data and asking for more and more documentation. They are requesting letters from borrowers explaining every recent credit inquiry in their records, or explanations for non-paycheck deposits made to bank accounts. Instead of one year of tax returns, it is not unusual for a lender to request two years or more.

Prediction #4: Processing Times Will Stretch Appraisers are swamped and lenders are requesting more documentation than ever. The result is that loan underwriting and processing can take longer than anticipated. Delays vary from lender to lender, so I pick my lending partners carefully and work hard to guide applications along as quickly as possible.

Note: regarding the last two predictions, this is why working with a company like Westchester Mortgage can really help. At Westchester, one person handles your mortgage from beginning to end. You work directly with a licensed Massachusetts loan originator with years of experience. We handle all the paperwork in-house so that you don’t have to worry about it.

Read more about the Westchester Mortgage difference here