With home mortgage interest rates at historic low rates it may be a perfect time to refinance your current Andover or North Andover home. Although refinancing can sometimes be a complicated process it may be worth the effort because it may save you tens of thousands of dollars over the life of your loan. 

Generally refinancing makes sense if you can reduce your current mortgage by 2 points or more.  Analyze whether the cost of refinancing makes sense by figuring out how long it will take you to cover the refinancing costs and whether you plan on being in your home that period of time.  If your new mortgage will save you $200 a month in mortgage payments and it will cost you $2,000 to obtain the loan then it will take 10 months for you to “break even” and begin to save money. 

Shorter loans have lower interest rates but higher monthly payments.  Mortgages are usually 15 years or 30 years in length.  Make sure that your new loan doesn’t have penalties associated with an early pay-off if your plan is to move or pay off your home loan early.

 Refinancing can be a wise financial decision and with mortgage rates at a 30 year low refinancing is at an all-time high.  Weigh all of the details and make sure that your new mortgage is exactly what you are looking for before signing on the dotted line.

This mortgage calculator can help you decide or Click here for more information about refinancing from Yahoo Real Estate.

It is important to chose your real estate advisor carefully!

We all know this is a great time to buy real estate…especially for first time home buyers in the Andover area.  Housing is more affordable than it has been in many years.  Still, if there is one thing we can take away from the real estate meltdown it is a realization of the importance of purchasing a home you can afford.  The time to buy a home has as much to do with your personal and economic well being as it does with the condition of the housing market.   Hopefully we’ve all learned some lessons from the days of risky loans and over-leveraging your assets.  In today’s real estate market it is more important than ever to borrow only what you can afford.

According to an article at Yahoo Real Estate, “Mortgage lenders generally use a ratio of 36 percent as the guideline for how high your debt-to-income ratio should be. A ratio above 36 percent is seen as risky, and the lender will likely either deny the loan or charge a higher interest rate. Another good guideline is that no more than 28 percent of your gross monthly income goes to housing expenses.”

Keeping the percentage at 28% or lower can only improve your financial situation.  Take a good hard look at your finances, look at your income and look at your expenses.  Consider your personal spending habits and long and short term personal and financial goals.   In the long run you and your bank account will be better off for being realistic.

Click here and find helpful information on calculating an affordable mortgage at Yahoo Real Estate.

I have about 45 days to get 1st Time Home buyers (or anyone who has not owned a home in 3 years) under contract so they can get the $8000 Tax Credit from the federal government as part of the Stimulus Package.

 

This program is going away in 80 days and I want to help as many people in the Andover area as I can.

 

Who do you know that wants to own their 1st home?  I have a great lender who can help you.

 

Housing prices are great and interest rates are great, but are predicted to go up with inflation. When interest rate go up, buyers cannot afford as much home.  Timing is perfect!  Start your home search with my FREE Email Updates.

 

Although mortgage rates are still above the record lows, mortgage interest rates have been falling. Rates rose this past June due to the yields on climbing long-term government debt. Investors became concerned that large amounts of extra government debt would trigger inflation. Experts speculate that mortgage rates fell this past week from market concern due to the weakening labor market. Whatever the reason, lower mortgage rates are great news for home buyers and home sellers in Andover, North Andover and the Merrimack Valley. Look at the difference just a 1% point increase makes in these loans.

People are waiting for prices to continue to drop; however, when rates go from 5% to 7%, it is the equivalent of a 20% increase in price to the borrower. Now is the time to buy.  For more information on how even small changes in fixed mortgage rates contact me at RE/MAX Partners in Andover, MA.  

Your credit score is critically important if you're buying a home.  A favorable credit score will not only make it possible for you to obtain a lower mortgage interest rate, but will be an important factor in determining whether or not the lender approving your loan. If you are concerned about your credit score, there is new information about what credit scoring companies deem important. One change that is being made is that there is a significantly more negative importance on a person that carries their credit balance near the limit. Experts are suggesting that people try to keep all balances owed near 30% of available credit. Another important fact is that you should never close an account with a zero balance. If you close the account, it can alter your total Debt to Credit ratio. It works in your favor to have a long credit history. Also, do not apply for too many credit cards, especially from companies that do not set a spending limit.  To raise your score, always pay your debts ON TIME. Your payment history makes up 35% of your score. A late payment can actually drop your score by up to 100 points and these late payments could last on your report for seven years. Bankruptcies last for ten years. If your score is below 620, people assume you are a bad risk dooming you to credit denial, sub prime interest rates, higher home insurance premiums, and possible checks form landlords withholding a lease. To order a free report go to annualcreditreport.com.

With the large number of foreclosures that are occurring all over the United States, people should know the many options they have to avoid one. Here are additional options (Part II.) for foreclosure:  

• Rent the Property: If your mortgage payment is low enough that market rent will cover it, this option will allow you to keep your property indefinitely.  
• Deed In Lieu Of Foreclosure: Sometimes known as a “friendly foreclosure”, because it allows the homeowner to return the property to the lender. It does require lender approval, and the homeowner must vacate the property.
• Bankruptcy: If the homeowner has non-mortgage debts whose payments are causing them to fall short of paying their mortgage, a personal bankruptcy will eliminate these debts. Bankruptcy can be very costly.
• Refinance: If homeowner has sufficient equity in the home and their credit is still good, a refinance is a possibility. In some cases it may lower payments, but it is an expensive process.
• Service members Civil Relief Act (Military Personnel Only): If a an active member of the military is experiencing financial distress, they could qualify for lower payments on all their consumer debt as well as mortgage payments.

Facing a foreclosure is stressful enough...but you may be eligible for one of these solutions.  I can help you put together a team of professionals with the experience and expertise to help.  For a confidential, no obligation consultation, contact me at RE/MAX Partners in Andover.

Today in the United States there are more and more homeowners facing the devastating financial challenge of foreclosure. Many times it can be avoided. Here are some options (Part I.) for foreclosure, along with a short explanation of each.   Reinstatement: This option is extremely simple, but the most difficult. The homeowner asks the mortgage company the total amount owed and pays it all, including fines and fees. It does not require approval, and lenders will allow this up to the day before the final foreclosure sale. Forbearance or Repayment plan: This is when a homeowner negotiates repaying their back payments over a period of time. Usually, the homeowner makes their current payment as well as a portion of the back payments owed. Most lenders require homeowners to be qualified for this option. Mortgage Modification: This plan is when either the interest rate of the loan, the principal balance or the term of the loan is reduced. The result is generally a lower, more affordable payment for the homeowner. Homeowners need to qualify for this option and must supply all necessary documentation, while the lender has to be actively pursuing modifications. Before losing your home to foreclosure seek the advice of a trusted professional. There are alternatives and I have some tools available which may help.  For a confidential, free consultation, contact me at RE/MAX Partners in Andover, MA.  Together we can explore some alternatives.

If you’re worried that you may be facing foreclosure on your home, there may be a solution for you. Very few realtors have the experience and knowledge to help distressed homeowners through the the complicated maze of procedures, strategies, and yes, paperwork to help the bank help you, the homeowner.  I have the expertise and certification it takes to help homeowners avoid foreclosure whenever possible. Remember that time is critical and the longer you wait the more difficult it will be to avoid foreclosure.  Here are 5 important reasons to avoid foreclosure!

1. The homeowner will ALWAYS have to disclose a foreclosure on a mortgage application.

2.  Credit scores will be lowered by 300+ points affecting the borrowers ability to get car, apartment, credit card and other financing.

3.  A foreclosure is one credit report item that is almost impossible to be “repaired.”

4.  Military and government clearance could be at risk with a foreclosure.

5.  Many employers run credit reports for prospective employers and foreclosure is one of the top items that may put a potential new hire in jeopardy.

If you are worried about a foreclosure on your home, contact me at RE/MAX Partners in Andover, MA for a confidential and complimentary consultation.