Mortgage Rates and Weekly Financing update 6/10/2011

I would like to thank seasoned Mortgage Broker Jennifer Buchanan of Metlife Loans  for posting mortgage rates again this Friday, as a guest contributor to update you on the current interest rates and trends. Please feel free to contact Jennifer for any mortgage questions that you may have, and know that she and I work closely together as a team to help you reach your goals.

Fixed mortgage rates fell for the eighth straight week in the widely watched Freddie Mac survey of what lenders are offering to well-qualified borrowers.  The 30-year fixed-rate mortgage averaged 4.49% this week, down from last week when it averaged 4.55%, Freddie Mac said.  Freddie Mac economist Frank Nothaft said a weak jobs report had pushed down yields on long-term Treasury bonds. Those debt securities are a benchmark for home lending rates, and mortgage rates followed suit
This week mortgage experts examined the 10 year Treasury note charts due to its ideal role as a benchmark of the general "bond market."  While it's true that loan pricing is derived from MBS,  or mortgage backed securities the goal was to examine long-term, big-picture movements.  The highest yield levels of 2007 through present day lie roughly along the same line. There appears a near perfect parallel line that, with the exception of the initial panicked flight-to-safety in 2008 and the repeat performance in 2010, the 10 year Treasury note charts contains every last bit of trading since the crisis. 

This is one of those times where technical analysis really is saying something very clear about the future: we're either in for an unfriendly bounce, or we're looking at the possibility of rates going lower. 

Plain and Simple: The revisiting of a long term technical level coincides with several other uncommon market dynamics, including the end of QE2, this is combining to create a perfect storm where rates are "on the ledge, poised for directional volatility.  Best advice, if you are purchasing or refinancing, work with a lender who has real time live MBS market data streaming to them so you can lock if the market starts to move into negative territory.

Mortgage rates this week:

30 year fixed - 4.375 %  with  .250%  points for rate
20 year fixed - 4.125 0%  with .250% points for rate
15 year fixed - 3.625% 0 points for rate
10 year fixed - 3.250% with 1.00 point credit to borrower for rate
5/1 ARM - 2.75% - 0 points for rate
7/1 ARM - 3.125% - 0 -points for rate
Jumbo - over 729,000
30 year fixed - 4.99% 0 points  for rate
15 year fixed - 4.50% - 0 points for rate
5/1 ARM - 3.50% - 0 points for rate
7/1 ARM - 4.00% - 0 points for rate

About Jennifer Buchanan:

    Jennifer Buchanan,  Certified Mortgage Planning Specialist at MetLife Loans is a seasoned veteran of the Mortgage, Banking and Broker Industry and specializes in mortgage loans throughout Fairfield County, Connecticut.
   Her attention to detail is unsurpassed, and her understanding of the marketplace makes it easy to find the right loan to fit her clients specific needs .  Jennifer's local processing and closing team are also known for their exemplary service.
   Understanding that the vast majority of mortgage brokers never discuss the long or short term  financial needs or goals with their clients, she set herself apart from the rest by obtaining the coveted CMPS  designation. (Certified Mortgage Planning Specialist)
    She is a member of the National Association of Responsible Loan Officers, and her commitment to ethics, understanding of the marketplace, and business acumen have earned her the respect of her peers and clients alike.

Jennifer Buchanan
Metlife Loans
203-341-6949

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Seller or Owner financing, and the term "taking back paper" - Do's and Don'ts

Seller financing is defined as a  loan provided by the seller of a home to the purchaser. It could be for a portion of the sale amount, or for the entire purchase less a downpayment. The buyer would then make monthly installment payments over a specified time until the loan is fully repaid at an agreed-upon interest rate.

A seller take-back is just like a loan from any lender. It must be repaid according to the terms and conditions outlined in the note. If not repaid, the property can be foreclosed upon, just like with a bank.

Have an attorney prepare and review the take-back/seller financing  loan papers before signing anything. If you are a seller, insist on seeing a buyer’s credit report and past tax information — just like any lender. And be sure that any loan arrangement is written according to terms which are satisfactory to your attorney.

There are benefits and drawbacks to both parties.

BUYER BENEFITS:
It may be the only way that you can purchase a home at this time.
Both the buyer and the seller can quite possibly save a lot of money in closing costs. The seller conveyance tax on property is going up as of July 1, 2011. It might help your case!
You  can negotiate an interest rate, repayment schedule, and other conditions of the loan, not like with a bank
 You , as the borrower would not have to pay PMI insurance unless required by the seller, and as a bonus, you do not have to go through a bank's loan underwriting department, who usually places conditions of the loan with your approval, if you can get one. .
 
BUYER DRAWBACKS:
You could pay the loan  back in full but still not receive clear title due  to encumbrances, items not divulged by or unknown to the seller, or the seller disappears. He would have to file a release of lien for you to be able to sell the home when you want to.
You may not have had the privilege or right to obtain the protection of a home inspection, mortgage insurance, or an bank appraisal to ensure that you are  not paying too much for the property. Make sure this is part of your agreement.
Make sure that you hold title to the property with a seller note. If you don't and he defaults on his current loan, or has encumbrances on the property that you are not aware of, YOU will be kicked out, and your money lost  if he goes into foreclosure.

SELLER BENEFITS:
The seller can receive a higher yield on his/her investment by receiving equity with interest, if negotiated that way.
The seller could negotiate a higher selling price  as well as higher interest rate.
The property could be sold "as is" so there will be no need for repairs.
The seller could choose which security documents (mortgage, deed of trust, land sales document, etc.) to best secure his/her interest until the loan is paid.

SELLER DRAWBACKS:
The seller might not get the buyer’s full credit or employment picture, which could make foreclosure more likely.
Depending upon whatever security instrument that was used, foreclosure could take up to a year or longer, if unfortunately needed.
The seller could agree to a small down payment from the buyer to try and help out the buyer and to make the sale, only to have the buyer abandon the property because of the small investment that was at stake.

Seller-financed sales can be good, as long as it is a win-win situation for all parties- good for both seller and buyer.  NEVER attempt to enter into a transaction like this without the assistance and guidance of your attorney.

GREAT COMMENT BELOW BY JENNIFER BUCHANAN- PLEASE READ

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What you should know before choosing a neighborhood to live in

Buying a home is a big investment of time, money and emotions. It can  be a dauntless task without the best guidance possible and assistance available to you. So go ahead, and ask questions of your agent if something is of concern to you. Maybe your question or concern is not  something that most other people would ask. I say ask anyway- you are spending thousands of dollars and you have every right.  A few things to consider are:

Resale statistics- What are the resale statistics for the last 10 years for the house, (if it has been sold receently), the street, the neighborhood, and the town? Compare them and see how that home stacks up.

How recession proof is the neighborhood?Is the neighborhood transient? More sales activity on any given street, and homeowners moving in and moving out in a few years rather than the national average of seven years could be a positive thing, or a negative one. If the homeowners all tend to work at one company, and that company isn't doing well for example, then there may be a lot of layoffs, and home sales at distressed values. That could hurt your resale for years. If the neighborhod is considered transient, it could be  1) that it is a starter neighborhood (no issues) or, 2) It could be a lot of executives choose the location for its proximity to transportation and they get transferred (no issues), but that doesn;t always mean that a transient neighborhood is a safe investment.  Just ask your agent to give you statistics, and be prepared to stay there emotionally and monetarily  if a recession hits.

Public School rankings- Very important even if you don't have any children, or any children in school.   When you decide to sell the home, buyers always ask for the best school districts. If at all possible, look for a house in that district. It may not make a difference to you now, but when you sell, you will get more of a premium for your home because of it.

Where are the sought after streets, and why? Every town or city has those few streets that have that "je ne se quios". Find out which streets they are- and why, if you can. I can think of a few streets in every town that just say "YOU MADE IT", and others are well known for neighborhood activities.  The homes on those streets tend to sell quicker and for more money, so be on alert.

What streets have traditionally had less than average  re-sale value? You know they exist- think about a street right now in the town where you live, and  people grimace when the name of that street comes up. That very good deal on that house in the town that you want to live in could be a very good deal because of that!  Also take note, that some neighborhoods have natural boundary lines, and if you want to live within that neighborhood, that across the street from that boundary line is not considered in that neighborhood. I can think of areas in cities where one side of the street is considered okay, and the other side IS NOT. Check into it!

Neighborhood ambience.  Does the neighborhood have the same feel throughout, or does it change down the street. If so, why? Do certain homes stick out as being absolutely perfect, while others look like they are unkempt? Pay attention to the neighborhood, and that brings me to my next point.

Does the neighborhood have a different feel from day to night, or weekday to weekend? There are neighborhoods that I, personally, wouldn't venture into after 8PM at night. If that's the case, I won't take you there in the day to look at a home. Some neighborhoods change at night, and that change may not be to your standards, so it is important to see for yourself.

Where are the parks, shopping, restaurants, health and town facilities. Well maybe you don't care too much about the parks for yourself, but it only helps resale value if you are close- just not too close. You might wnat to know if the nearest grocer closes at six PM, and doesn't have as much stock as you would like. Walk in clinics, hospitals, and pharmacies are important too. Nowadays, there are usually walk in clinics in most towns that we all hope that you don't need, but you have to think about that. You should also be able to find 24 hour pharmacies in somewhat close proximity. And where are the fire hydrants on your street, how close are they to your home, where is the nearest fire department, what's their response time, and where is the Police department. Lots of research, I know. Better done sooner than later when it's too late.

Crime rate for the neighborhood, as well as for the house itself. Check into the crime rate for the neighborhood. As an agent, I am unable to tell you this, however I can reer you to the Police Department and you can ask yourself. You may want to ask for the history of any crimes reported at the house, as well. If a violent offender lived at the house previously, someone exacting revenge on that person may not know they no longer live there. Might it be a good idea for you to check that out? I think so. You may also want to check the sex offender registry to see if anyone on that list lives on your street or nearby. If you have a question about poltergeists, or psychological impacts on the home, see my previous post on that here.

I am happy to help you  through your buying process, and make it as easy as possible. Just look at some  testimonials from past clients. They say it better than I ever could.

... and when you are ready to buy a home, please contact me :)

Why doesn't the listing agent show your home more often?

If your listing agent is not showing your home as often as you would like, it does not mean that your agent is not working hard for you. A lot of homeowners think it's only natural that their listing agent should be showing their home. And it is, to an extent- but it doesn't always happen, and try not to get too upset about it.

When you hire your agent, you expect your agent to market your home to the best of their ability, and to get as many buyers through the door as possible, so that one of those buyers ends up purchasing your home.

If we look at things realistically and statistically, most agents have a group of buyers that they are working with at the present time. Let's say, on average, that number is 25. Out of those 25 potentials, how many would be in the market for your home? Most agents work in a variety of price ranges, and towns, so the possibility of an existing buyer being interested in your home is somewhat slim.

Which brings me to the next point- If the agent is marketing your home, and marketing it well, wouldn't they get new buyers just from your listing, that would already have some interest? The answer to that is yes, but the amount all depends on how marketable your home is as well as the agent's marketing efforts. For example, if your agent made sure that your home had all the exposure it could possibly have, your home may not be as marketable  as you think it would be. The other point to make here, is that you must make sure that your agent presents your home in the best possible light to buyers. Even when all the conditions on marketability and presentation are met, the market may be very slow. It does not mean that your agent is not doing their job.

The last piece of the puzzle, and the most important one, is that your agent also markets your property to other Realtors. It is a well known statistic that the vast majority of agents RARELY sell their own listings. In addition, historically, less than 3% of all homes sell at public open houses.  

In our area of Fairfield County Connecticut, there are over 7,000 agents who are members of the Multiple Listing Service. If they all had 25 prospective buyers, wouldn't THAT be a great place for your agent to concentrate some of their efforts to secure a sale for you? What do you think the possibility is that just one of those 7,000 members has a buyer for your property. That would be,..... well 7,000 times greater than just your agent having a buyer, wouldn't it?

So try not to get too upset if your agent doesn't show your home as often as you would like. Some agents, myself included, show their own listings more frequently- and secure sales on their own listings, but that also is rare, and even for those of us who do manage to  find our own buyers for our listings, it's the exception, rather than the rule. Just remember, that your agent is  working on selling your property nonetheless.

All about the town of Fairfield Connecticut

The town of Fairfield Connecticut is located along the coast of Long Island Sound in the mid-eastern section of Fairfield County. It's proximity and accessibility to New York City along with its five sandy beaches and 6 mile coastline make this community an excellent choice for anyone desiring the amenities of a nearby metropolis along with the comforts and traditions of a New England community. The Town of Fairfield  was incorporated in  1639 and encompasses approximately 30 square miles. Some quick additional demographic data:

Elevation 15 ft.                                                             
58,000 Residents
20,600 Households
81% owner occupied
37% of homes built prior to 1950

See Fairfield CT Listings, now

Fairfield, as a community, holds deep in its heart the rich tradition of its history and there are numerous nationally registered historical landmarks scattered about in town. The cultural diversity and arts community are both impressive and expressive, and annual local fairs, festivals and fundraisers are of the norm.

There are five golf courses in town, public beaches, lakes, tennis courts, numerous parks, playgrounds and outdoor activities for everyone. Another fine feature of this town is its ease of transportation. There are currently two train stations, and a third on the way that are serviced by the Mtero North Railroad. Major transportation arteries, such as Interstate 95 and one of Connecticut's scenic roads, Merritt Parkway (Route 15), offer convenience to all commuters.
The public school system is one that is well noted for its excellence. Fairfield also hosts two higher education learning institutions, Fairfield University and Sacred Heart University.

Different enclaves in town make for a scenic ride anywhere within the Fairfield's boundaries. There's the older Stratfield section, historic Southport on the water, which certainly has the feel of a quaint New England town such as Nantucket, and the beautiful landscape of Greenfield Hill, among others. Each year, thousands of visitors visit Greenfield Hill's much celebrated 10,000 tree Dogwood Festival, which is held each spring. Fairfield is a town where there really is a place for everyone. Where else can you purchase a home for $250,000 all the way up to 25 million?

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