Area man has trouble getting mortgage loan
Boston Condos for Sale and Apartments for Rent
Area man has trouble getting mortgage loan
A potential buyer was thinking of refinancing his new South Boston condo. I told him to hold off. Let’s start off with the basics, and you’ll understand why I told him to hold off.
You may have been told by a Boston condo for sale agent that :
You will date the rate but marry the condo
The idea of buying a Beacon Hill condo now and planning on refinancing to a lower rate later does carry some risk.
Mortgage interest is front-loaded, which means that the borrower pays the most interest on the first payments. Refinancing means starting over and paying more toward interest and less toward capital, which means less equity.
As a rule of thumb, wait until rates go down by 2% before refinancing. That way, refinancing will pay off.
People who buy downtown Boston condos now have no guarantee that when rates are lower that they will have a job. Jobs come and go but mortgage payments can last for decades, which is one heck of a long date.
Buying a less expensive Boston condo is one way to keep mortgage payments lower. Another strategy is to save up for a large down payment.
When the news headlines exclaim that mortgage rates are lower, that doesn’t mean they are low. It means that they were recently higher. Right now, they are about what they were a year ago, when they were at 6.77%.
These rates are averages. You may qualify for a lower rate or for a higher rate. Ask your lender.
Love thy neighbor
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Area man has trouble getting mortgage loan
Some (good) people are having trouble getting loans.
A June survey by Deloitte Research of people who attempted to secure various types of credit and mortgage products during the last year found both home buyers and homeowners discouraged by the housing market. Some of the findings:
* Of those who applied for a mortgage, 67 percent found it more difficult than they expected.
* Of those who considered refinancing an existing home, 70 percent were unable to complete the transaction or decided against it.
* Sellers were also reluctant to make a move with 69 percent saying they are unlikely to sell a home in the next year, given the current economic environment.
* Of respondents who currently have a mortgage, 91 percent said they made their mortgage payments either early or on time over the past year.
I am happy to say that my clients have not had too much trouble qualifying for loans or closing as scheduled, fortunately for them (and me).
Things are certainly unstable right now in the credit market, to overstate the obvious.
Source: Getting a Mortgage Perceived as “Difficult” – Deloitte Research by way of Realtor.org
