Massachusetts Home Buyer Guide

U.S. Mortgage Interest Rates Decline to Near Record Lows

Buying a home is starting to become a no-brainer for a lot of people. With home prices down as much as 40 percent in some areas of Massachusetts over the last five or six years, mortgage interest rates still at historic lows and rents rapidly going up, it's cheaper to buy a home than to rent for many people.

First-time home buyer programs help too.

The average rate on the 30-year fixed mortgage in the U.S. dropped near its all-time this week, making home-buying and refinancing a bargain for those who can qualify, USA Today reported April 12, 2012.

Mortgage buyer Freddie Mac reported that the rate on the 30-year loan fell to 3.88 percent from 3.98 percent. That's just above the rate of 3.87 percent reached in February, the lowest since long-term mortgages began in the 1950s.

The 15-year mortgage, a popular option for refinancing, plunged to a fresh low of 3.11 percent from 3.21 percent last week. The previous record low of 3.13 percent was reached last month.

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NAR: Houses More Affordable Then In Last 40 Years

The affordability of housing is at a record high in the United States, rising to levels unseen since the National Association of Realtors’ Housing Affordability Index started keeping record in 1970, the National Association of Realtors reported March 6, 2012.

In January, the NAR Housing Affordability Index rose to 206.1. The number represents the relationship between median home prices, median family income and average mortgage interest rates. The higher the number the more affordable homes are to the median household.

A score of 100 represents the point in which a median-income household can qualify for the purchase of a median-priced existing single family home. The score of 206.1 found in January means that a typical family has more than double the income needed to purchase a median-priced home. This is the first time the housing affordability index has broken the 200 mark.

The 2012 Housing Affordability Index should remain at record-high levels over the course of 2012, with little change in home prices and interest rates expected this year.

Purchase Mortgage Applications Up 8%

U.S. mortgage applications for those purchasing homes were on the upswing last week. Applications for purchases grew a seasonally adjusted 8.2 percent during the week ending Feb. 24, the Mortgage Bankers Association (MBA) reported.

Mortgage refinance applications, on the other hand, dropped 2.2 percent during the same period, which brought overall mortgage applications down 0.3 percent compared to a week earlier.

The MBA report was adjusted to take into account the President’s Day holiday.

U.S. Mortgage Applications Decline

Mortgage applications decreased 11.7 percent on a seasonally adjusted basis from one week earlier, the Mortgage Bankers Association (MBA) reported November 30, 2011. The Weekly Mortgage Applications Survey included an adjustment to account for the Thanksgiving holiday.

The Refinance Index decreased 15.3 percent while the Purchase Index decreased only 0.8 percent from the previous week.

The four-week, moving average for the seasonally adjusted index was down 3.29 percent. The four-week, moving average was up 2.37 percent for the seasonally adjusted Purchase Index, while the Refinance Index was down 4.92 percent.

Mortgage Fraud on the Rise

In second quarter 2011 there was an increase in U.S. mortgage-fraud reports, which were fueled by a wave of lawsuits from investors of mortgage-backed securities that are resulting in lenders reviewing loans, the Associated Press reported September 28, 2011.

The Treasury Department’s Financial Crimes Enforcement Network received 29,558 reports, or tips, of possible mortgage fraud in the second quarter, up from 15,727 reports in the second quarter of 2010. The network enforces the legislation that requires banks to report questionable transactions to the government, also including illegal money transfers and money laundering.

A report released by the network found that 81 percent of the “suspicious activity reports” filed involved mortgages that were signed prior to 2008, while 63 percent targeted mortgages from at least four years ago. Network Director James H. Freis said the fact that the loans in question are older is "an indication that financial institutions are uncovering fraud as they sift through defaulted mortgages."

The most common suspicious activity reports filed included fake documentation reports, debt-elimination scams and scams that involved fraudulent Social Security numbers.

More Massachusetts Homeowners 'Underwater'

Nearly a quarter-million homes have negative equity in Massachusetts, a number that has grown roughly 5 percent over the past year, the Boston Business Journal reported Tuesday, September 13, 2011.

A home is considered “underwater” when its mortgage exceeds the property’s overall value. Although the percentage of Massachusetts homes that are underwater is quite a bit lower than the national average (15.7 percent in MA, 22.5 percent nationally), Corelogic, a provider of financial, property and consumer information, reported that Bay State percentages are trending upwards while the national average declines.

As of the end of June, 15.7 percent of Massachusetts homes were underwater compared to 14.9 percent at the third quarter 2010, a difference of 11,846 homes (234,443 in June 2011, 222.599 in September 2010).  The Boston-Quincy metro region saw negative equity rates rise from 15.7 percent in September 2010 to 16 percent in June 2011.

Nationally, negative equity rates dropped to 22.5 percent in June, down from 23.1 percent at the end of 2010.

$5,000 Grants For First-time Military Buyers

Active duty personnel, veterans, retired members of the military, and employees of the U.S. Department of Defense and the Department of Homeland Security are eligible to apply for up to $5,000 in down-payment and closing-cost assistance in the purchase of a first home.
 
The national nonprofit Pentagon Federal Credit Union Foundation is offering the assistance through its Dream Makers program and says the grants can be applied to a mortgage from any financial institution.

You're eligible for a Dream Makers grant if:

1. You're Military (Active Duty, Reserve, National Guard or Veteran), a Department of Defense employee or a Department of Homeland Security employee.
2. You're a first-time home buyer, or you have not owned a home for the last three years, or you have lost your home through divorce or disaster.
3. The gross household income, including allowances, that you use to qualify for your mortgage loan is:
   - A maximum of $55,000 per year, or
   - A maximum of 80% of your community’s median income based on your family size

U.S. Mortgage Applications Rise

The number of mortgage applications in the U.S. increased last week, fueled by a surge in purchase loan applications, which jumped by the most in two years, Bloomberg reported November 24, 2010.

The Mortgage Bankers Association’s mortgage application index rose 2.1 percent compared to the previous week; however, purchase applications surged 14.4 percent, the biggest gain since November 2008. Refinancing loan applications declined 1 percent.

Home Loans at Record Low Interest Rates

Mortgage interest rates are at record lows. Get a referral to a competent Massachusetts mortgage professional.

U.S. Mortgage Interest Rates Continue Decline

The average rate for a 30-year, fixed rate U.S. mortgage loan declined to 4.49 percent from 4.54 percent the previous week, Reuters reported August 4, 2010.

A year ago the same loan stood at 5.22 percent. The data come from Freddie Mac.

Thirty-year mortgage rates have fallen to new lows in six out of the last seven weeks.

Fifteen-year, fixed-rate mortgages averaged 3.95 percent, down from 4 percent the previous week, the lowest since Freddie Mac began surveying this loan type in 1991. Fifteen-year mortgage rates have hit fresh lows in five of the last seven weeks.

With the home buyer tax credit now expired, low mortgage rates are the biggest incentive for potential home buyers to move off the sidelines. I have had several closings over the past few weeks where my clients had 30-year, fixed-rate loans at less than 5 percent.

Applications to refinance loans increased 1.3 percent last week and those to purchase homes increased 1.5 percent, according to the Mortgage Bankers Association.

The following is a report by National Public Radio.

Find a mortgage lender, get pre-approved and check out the latest interest rates.

U.S. Mortgage Interest Rates Decline Slightly

The average interest rate in the U.S. for a 30-year, fixed-rate mortgage loan declined to 5.06 percent from 5.07 percent the previous week, Bloomberg.com reported April 29, 2010.

The Mortgage Bankers Association released the data.

The average 15-year interest rate stood at 4.39 percent.

U.S. mortgage applications declined 2.9 percent, Bloomberg.com reported April 28, 2010. 

Mortgage applications to refinance declined 8.8 percent; however, purchases applications climbed 7.4 percent to the highest level since October 2009, the month before the 2009 first-time home tax credit was due to lapse.

There are many mortgage calculators online to figure out home loan payments.

Mortgage Interest Rates Rise

The average 30-year fixed mortgage rate on the Zillow Mortgage Marketplace is currently 4.93 percent, an increase of 13 basis points from 4.80 percent compared to last week, Zillow reported March 30, 2010. 

Zillow's real-time mortgage rates are based on thousands of custom mortgage quotes submitted daily to anonymous borrowers through the site, and reflect the most recent changes in the market. These are not marketing rates, or a weekly survey.

The rate for 15-year, fixed-rate home loans is currently 4.26 percent, while the average rate for a 5-1 adjustable-rate mortgage (ARM) is 3.53 percent.

Mortgage Applications Decline

U.S. mortgage applications declined 1.2 percent compared to the previous week, MarketWatch.com reported February 10, 2010.

Mortgage applications for home purchases declined 7 percent. Refinance applications rose 1.4 percent.

One in Four U.S. Homeowners Underwater

One in four U.S. homeowners holds a mortgage with a balance higher than the property’s value, BusinessWeek reported January 29, 2010.

The number of borrowers with negative equity, also know as being "underwater" on your mortgage, reached 10.7 million, or 23 percent, at the end of Q3 2009, according to a November 24, 2009 report by First American CoreLogic, a Santa Ana, California-based real estate research firm.

Government programs to help underwater borrowers exclude jumbo mortgages, which are not eligible to be purchased by Washington-based Fannie Mae and Freddie Mac of McLean, Virginia.

MassHousing Providing Tax Credit Loan

MassHousing has created a program that allows first-time home buyers to use their $8,000 federal tax credit towards a down payment or towards closing costs rather than having to wait until they file their taxes.Home buyers that use a MassHousing first mortgage loan to buy their home apply through a participating lender for the Tax Credit Loan program.

 

Once the loan is used towards either your down payment or closing costs the next step is to file for the tax credit on your next tax return as you normally would to receive the credit. Once you receive the credit you use that money to pay off the MassHousing tax credit loan. The loan does not collect any interest until June 1, 2011. If not paid by June 1, 2011 "the Tax Credit Loan is amortized over the next 10 years, at the same interest rate as the first mortgage."

 

To be eligible for this loan you must be a first-time home buyer, meet certain income and loan limits, enter into a binding contract by April 30, 2010, and use the property as your primary residence for the life of the mortgage.

For more information, visit the MassHousing Web site.