Realtors and Homebuyers: A Major Market Shift is Happening – Be Prepared!

We always hear about buyers' markets and sellers' markets in real estate – but do you know which one we are in right now?  Well, this may depend on where you are buying or selling, but my experience over the last few months is that we are in the middle of a BIG TIME shift that we have been awaiting for eight years.  Now if you are in the market to buy a home this year, don’t let this scare you.  In fact, it may be the most opportunistic time to buy in years! 

Let’s explore this first with a few simple observations…..

• There is a shortage of inventory on the market right now.  Although the number of homes for sale fluctuates by area and neighborhood, there are 5 buyers for every 2 houses on the market right now.  Naturally by supply and demand, this creates competition and drives prices up.  The good news is that with the spring market comes a lot of new inventory, so buyers who are prepared will be in the driver’s seat.
• There are more cash buyers in the market this year, which also drives up prices, without the appraisal contingencies to worry about.
• Interest rates on the rise – The Fed has tapered its stimulus from $85 billion to $65 billion in monthly purchasing of mortgage backed securities. This has resulted in higher rates, as we saw last fall when rates went from the 3’s to the 4’s overnight.  As we see the economy improve coupled with further Fed tapering, rates will continue to go up, creating more urgency from buyers.

OK – So Why is this Good News for Everyone? 

 

For buyers, the cost of money is still cheap.  With the national average FHA 30 year fixed rates below 4% and Conventional 30 year fixed rate just above 4%, getting in now is KEY.  As mortgage rates rise, so do interest rates on your savings and other investments. Locking in on a low fixed rate while all other rates go up gives you the best of both worlds.

 

Also, lenders are expanding product offerings.  We are starting to see more options for Conventional loans like old the 80/10/10, and 5% down with No Monthly PMI.

 

Sellers who may have not been able to sell for the last few years, or were previously unwilling to sell in a down market, will now be reconsidering the move since they may be able to get more for their home than they did last year or the year before.

 

Buyers – Be Prepared!

 

If you are in the market to buy a home this year, start by talking to a lender NOW.  Actually, talk to a couple lenders. 

• Find out what you qualify for before you start looking at houses.  The last thing you want to do is find your dream home, and then lose it to another buyer because you haven’t gotten your ducks in a row.  If you are scrambling at the last minute to secure a loan, you might not make the best choice in lender or loan type.
• If you are a 1st time homebuyer, you may be eligible for FREE money toward down payment and closing costs.  That’s right – FREE Money!  Not all lenders participate in all programs, so make sure you get hooked up with a knowledgeable lender.
• Have your lender show you on paper how one loan compares with another, what the costs are, and how each loan option affects your cash out-of-pocket and monthly payment.  The loan that your friend, family member, or co-worker got may not be the right loan for you. 
• If you are having a hard time understanding the information being given to you by your lender, don’t be afraid to ask questions until you do understand.  For most people, this is the largest obligation you will take on, and you should make sure you make informed decisions.

This is a very exciting time for anyone buying or selling a home.  Having a dedicated, caring, competent lender makes all the difference. 

 

Please call or email me if you would like more information on mortgage products and getting pre-approved so you are prepared when you or your client find your home of choice.

Federal Home Loan Bank of Atlanta (FHLB) Is Back!

We have been given a rare opportunity to access the remaining funds for 2013; effective August 26, 2013!

The First-time Homebuyer Program (FHP) provides matching funds for down-payment and closing-cost assistance to low- and moderate-income homebuyers. Federal Home Loan Bank of Atlanta partners with member financial institutions to make awards of up to $5,000 per household. The money is distributed to eligible homebuyers on a first-come, first-served basis.

Check with us on 2013 Income limits to see if you/your buyer is eligible today!

Let Us Work for You!
Please call Stuart directly at 410.491.0200 or sepstein@baybankmd.com.

Understanding the Home Appraisal Process

Both homeowners who are selling their home and potential buyers are often confused by the home appraisal process.  

Sellers often feel that their home is worth a certain amount especially if they upgraded their home, made improvements or added amenities.  On the other side of the process, a potential buyer may have found their dream home for X amount and wonder if the house is really worth that much. 
These questions and concerns are at the heart of home appraisals. 

At its core, an appraisal determines the value of taxable property or property that appreciates; such as fine jewelry, art, businesses and land.  A home appraisal is simply the opinion of a state-licensed third-party professional whose expertise is in determining the value of the land and buildings or structures contained on the property. 

In residential properties, the appraiser will usually compare the sales cost of other properties in the area.   However, the appraiser will also evaluate the lot size, square footage of finished and unfinished spaces, condition of the property and features like a garage or fireplace.

When it comes to home improvements, it is important to remember that there is no set amount associated with upgrades.  The appraised amount of any upgrade could very well be less than the cost the homeowner paid for the upgrade.  Again, appraisers will look to other properties in the neighborhood with similar upgrades to determine the value.

For example, a homeowner may spend $25,000 on a swimming pool but if the local marketplace can only support a $10,000 pool, then that upgrade will be marked on the appraisal as $10,000.  This is the reason why homeowners should choose their upgrades wisely.  

Lenders determine appraisal guidelines in order to force appraisers to attach a fair market value on a home based on comparable sales.  Comparisons are based on the most recent six months of market activity and often examine closed or pending sales of at least three similar properties.   This process prevents appraisers from over-valuing the home in question; a practice that some believe contributed to the 2007 housing bubble.  Recent Federal rules have been instituted to prevent lenders from having influence over the appraiser’s results by requiring non-interested third party services to select and communicate with the appraiser prior to its completion.

Although the home appraisal process protects the lender from unnecessary risk, it also protects the buyer from overpaying on a house. 

If you have any additional questions about the home appraisal process, please call Stuart directly at 410.491.0200 or email at septstein@baybankmd.com.

We Are An Approved CityLIFT Lender!

We are proud to announce that we are now an approved CityLIFT Lender!

The CityLIFTSM program in Baltimore is designed to provide $15,000 in down payment assistance grants to new Baltimore homebuyers and homebuyer education programs in areas most impacted by the financial crisis.  This is a “soft second” mortgage that is forgiven over a 5 year period.

• No First-Time Homebuyer Requirement
• Can use in conjunction with CDA loans and grant programs
• Can use in conjunction with one other city-based program

Call us today to see if you can take advantage of this great program!

STUART EPSTEIN - 410.491.0200

Loan Officer/Branch Manager

 

 

*Rates and program details are subject to change.

 



Refinance/Purchase Opportunities Could Outshine Black Friday Deals

There seems to be an emerging emphasis on shopping that has taken the activity to new extremes, almost giving it the feel of a competition. People are constantly attempting to showcase their knack for the biggest and best sales. Never is this more evident than the phenomenon that has become of Black Friday and Cyber Monday.

However, a new study has emerged that suggests this new generation of extreme shoppers don’t apply the same diehard tactics to everything they buy. The people who camp outside in front of shops for days, vulture coupons as if they were winning lotto tickets, and self-induce carpool tunnel syndrome scavenging the web, apparently may be the same people being referred to as the least savvy homebuyers.

A recent poll taken of Black Friday and Cyber Monday shoppers reported that nine out of every ten people cited the appeal of competitive specials and sales as reason for partaking. That same figure of people reported to have compared similar products between brands and stores for pricing prior to purchasing an item. It also suggested that an overwhelming majority of shoppers who turned out for the deals were low to medium income earners.

These people may do staggeringly less research and comparison prior to purchasing a
home.

This poll comes on the heels of an unrelated report on mortgage purchasing by Fannie Mae Chief Economist Doug Duncan, who reported that fewer people shop around prior to obtaining a mortgage and it typically costs them thousands of dollars in closing costs and interest rates.

"Homeowners who don't obtain multiple mortgage offers or carefully compare rates are essentially leaving money on the table, particularly given today's unprecedentedly low interest rates," said Duncan. "Although a home purchase is the largest financial obligation most people will ever make, many borrowers do not fully understand their mortgage products and costs. As a result, some homeowners in this position may find themselves with unsustainable payments down the road."
The report compared the due diligence between classes of income earners, and revealed that low to medium income earners performed 20% less research prior to obtaining a mortgage than medium to high income earners. An additional 43% of the lower income earners also reported not understanding their mortgage rate. Another 10% of the lower income earners reported paying more than expected in closing costs than higher income earners.

While mortgage rates and contracts are naturally more complicated than television discounts and buy-one-get-one sales, they can be easily explained by professionals probably in less time than it takes to wait in the lines at the mall during Black Friday sales.

The deals afforded by current record low mortgage rates are also enough to have even the stiffest of extreme shoppers excited. So the next time you plan on camping out overnight in front of the local Best Buy, maybe consider taking the opportunity to call a few local mortgage professionals and ask about current refinance and purchasing opportunities while you wait. You just may find that you’ve been missing out on deals that will save you way more than Black Friday ever could.

Spring Housing Market Update for Baltimore Metropolitan Area

Written by Stuart Epstein

It’s hard to believe that we are into May already!  I will say that I am happy to report that the first four months of 2012 have been one of the busiest that we have seen in a long time in the Baltimore area home buying market.  We are up by 9% over 2011 for purchase mortgages, and an average purchase price of $200,000, compared to $187,000 for the same period last year.  Many people are starting to realize that home prices may have hit their low point and interest rates could not be more attractive than right now.  For example, the average rate on an FHA 30-year fixed rate loan right now is 3.5% and a Conventional 30-year fixed at 3.875%.  Our refinances have more than doubled for the first four months of 2012 over 2011!  This is mainly due to rates being at an all time low.  Many are reducing the term from 30 years down to 15.

The majority of the new applications are 1st time homebuyers, who happen to be in the best position right now, given they have no house to sell as a contingency for buying.  They also have the benefit of receiving 1st time homebuyer grants and incentives, such as the CDA loan with DSELP (Maryland Mortgage Program) and the FHLB grant. 

We are also seeing more “step-up” buyers, those who are selling their current home and upgrading to a larger or superior home.  Since inventories of sought after homes on the market seem to be shrinking, some sellers are finding it easier to get contracts on their houses in a couple months.   Some areas are actually experiencing bidding wars again.

The mortgage qualifying and documentation standards have continued to get more and more restrictive, which can make for a stressful process when applying and taking out a loan these days. The good news is that qualified borrowers can still get a loan, and at historically low rates.  It just may be a bit more painful getting to settlement. 

I may sound like a broken record, but the key is having a good, reputable, local lender working for you to make the transaction as smooth as possible. 

If you own a home and have not refinanced in the last year, make sure you check with your lender to see if it makes sense for you to refinance.  There are several programs available to help: the FHA Streamline Refinance, the VA IRRRL Refinance and the Fannie Mae DU Refi Plus programs all have flexible guidelines to help those who may not have the equity normally required to get a lower rate.  If you are not sure if it makes sense for you to refinance, or if you are not sure if you can, don’t hesitate to call (410.491.0200) or email us to do a free analysis.

Enjoy the beautiful spring weather!

The FHLB Grant is Back!

Carrollton Mortgage Services is proud to be one of very few lenders in the State to offer this 1st Time Buyer Grant; Buyers may be eligible for $5000 towards their closing costs and down payment on a home!  FHLB is a forgivable grant (20% each year up to 5 years total) and is issued at settlement toward the down payment. The $5000 grant is per household, and is allowed to go towards a buyer’s FHA 3.5% minimum requirement for down payment.

Borrowers must meet just a few requirements to qualify for the wonderful grant and it is on a first-come, first-serve basis.

Carrollton helped over 135 1st time buyers just last year alone achieve the dream of homeownership with the FHLB Grant.  We also have several other down payment and closing cost assistance programs to offer that can be used in conjunction with FHLB or independently as well.

If you or anyone you know might be able to benefit from these funds, please don’t hesitate to call on us to help! Email at sepstein@carrolltonbank.com or call 410.491.0200.

One of Stuart Epstein's Fans Tells Her Success Story

Ordinarily, waiting at the MVA would be a frustrating affair. Today however, is different. I am content! I realize they are calling for G62; my ticket says G105, but I'm beaming. This is the day I change my license to my new permanent address, my first house.

Six months ago I would have told you that I was not ready for the commitment of buying a home. Or that I couldn't afford a mortgage, student loans, and a healthy social life. However, last September I attended a course presented by LiveBaltimore where I learned about the various incentives available to home-buyers in Baltimore City.

In October I approached Stuart Epstein and the Carrollton Bank team (Bob Foster and Jennifer Grosholz) with a challenge. Through my research and Stuart's assistance I hoped to earn $47,000 worth of grants, incentives, and principal diminishing loans to assist in the purchase of a new home. I also needed to close before December 1.

Stuart was excited by the challenge and the complexity of the paperwork involved; nor did it deter Bob or Jennifer who were extremely well organized, focused and served as an excellent resource.

Stuart and his team accomplished a miraculous feat by processing grants and loans from several different entities. They placed a rush on the inspection and kept me focused as the December 1 deadline rapidly approached.

It is with significant evidence of their hard work that I recommend Stuart Epstein and his team to you. Stuart is incredibly informed and up to date on all of the programs and incentives offered by the City of Baltimore, and even more so after working with me. They are responsive, professional, and personalize each service to the client.  I would not hesitate in working with them again and highly recommend their service.

I realize, still waiting for my number to be called at the MVA, that this would never have been my city, my home, without their support and hard work.

Thank you Stuart, Bob, and Jennifer!

- Charlotte Jones RN, BSN

More Exciting News for 1st Time Buyers in Maryland!

More Exciting News for 1^st Time Buyers in Maryland!

CDA  (The Maryland Mortgage Program) is offering the 30 year fixed rate loan at 3.5% and no points!! 

Can you believe it?  Well, there’s more.  You can also purchase and renovate a home with a 203k Loan and CDA and get a 30 year fixed rate at 3% and no points. 

I know it seems too good to be true.  CDA has lowered their rates to help to revitalize the market and incentivize 1^st time homebuyers.

In addition to the awesome rates, you can qualify for the DSELP - $5000 toward closing costs and down payment, and several other grants that come along with the CDA loan.

These rates won’t last forever.  If you want to know if you are eligible for this incredible program, please contact us right away! Contact me directly at sepstein@carrolltonbank.com or (410) 491-0200. 

Attention First-Time Homebuyers:

We have some really exciting news from the Maryland Mortgage Program (some know this program as the CDA loan or MMP).  The MMP has added the FHA 203(k) Streamline Renovation loan program to its offerings!!
You can now take advantage of the awesome benefits of the Maryland CDA loan and closing cost assistance - and add up to an additional $35,000 to renovate your new home at the same time. This is a big deal!!  And here is the best part – the CDA program is offering this loan at a 30-years fixed rate of 3.875% and zero points – for a limited time.

We have been waiting for years for this program to be released.  This loan is especially helpful if you are interested in buying a foreclosure or any “neglected” property that needs some TLC, or perhaps a new kitchen or bathroom(s).  The Maryland Mortgage Program also comes with DSELP, a $5000 zero percent interest loan from the State to help with your down payment and closing costs.  There are several other grants that come along with this wonderful program as well.

Traditionally, when using the Maryland Mortgage Program, you had to have a home inspection and the program required that all the items on the home inspection be repaired before settlement.  This was very prohibitive for buying homes where the seller was not able or willing to make those repairs.  That issue no longer exists with this new program.  You, as the buyer, select you licensed contractor and make your list of repairs and wish list of renovations/upgrades, and we add that to your loan, up to $35,000.  You can make the house into your dream home before you move in!

The eligibility for this MMP 203(k) loan is the same as the regular CDA mortgage.

As always, I am happy to walk you through this great program, and answer any questions you may have.  Feel free to check out all the details on my website http://www.stuartepstein.com/, or go to the website for the program - http://www.mmprogram.com/.