Mortgage insurance (MI) protects mortgage companies in case a borrower fails to pay a home loan. It is typically required by a lender on mortgages with a down payment of less than 20% of the purchase price and is usually charged in monthly premiums. For buyers with tight budgets, monthly charges for MI can be an extra hardship. Financed MI is a potential solution. In this blog you will find the definition of financed mortgage insurance.

Definition Of Financed Mortgage Insurance

Financed MI enables a borrower to cover the insurance cost at closing and essentially include the cost into the principal of the home loan. It is available on both fixed rate and adjustable rate programs. It is helpful to understand the pros and cons of this arrangement.

Benefits of Financed MI

Financed MI reduces the total monthly mortgage payments. The overall amount of the insurance is somewhat low when applied to the life of the mortgage. It can also offer the most tax benefits as not all homeowners can use a tax deduction for monthly mortgage insurance costs.

Downside of Financed MI

There are a few cons to financing MI. Since the cost of MI is rolled into the principal of the loan, the mortgage starts at a higher figure. Additionally, the total premium is paid up-front so there is a greater up-front expense to obtaining the mortgage. If the mortgage is paid off early, the cost of MI can be effectively higher than using the monthly premium alternative.

Assessing MI Alternatives

Financing MI can be helpful if you want to hold on to a mortgage for more than a few years and/or if you require a lower monthly payment. If you intend to pay off your loan in a couple of years, it might be less costly to pay the insurance monthly. This definition of financed mortgage insurance is offered for reference only. To determine the best option for your particular situation, consult with a mortgage professional.

When real estate is transferred in MA, real estate transfer taxes (sometimes known as deed recording taxes) are charged. Different from annual real estate property taxes, transfer taxes are charged only once at closing. It is important for home buyers and sellers to be familiar with what a transfer tax is and the cost that it may affect money needed at closing. Below is information on MA real estate transfer taxes and who pays them.

MA Real Estate Transfer Taxes and Who Pays Them

The transfer of real estate means a grant, sale, exchange, assignment, quitclaim, contract for sale, or other change of ownership in title to real property. In MA, sellers take on the burden of real estate transfer taxes. The sum of MA real estate transfer taxes is calculated by the market value of the home and the tax rate of $4.56 per thousand. It is included as part of closing costs for sellers and is commonly required before the deed files. The determination of the tax is normally the responsibility of the closing attorney and is reflected as part of the settlement statement.

Information On MA Real Estate Transfer Taxes

The amount of tax charged is based on the applicable rate at the time a closing completes and the deed is recorded. Transfer tax rates do change from time to time. Proposed increases are often met with resistance. Ask a real estate professional for applicable information on tax rates. You should also check with your tax preparer on whether real estate transfer taxes aredeductible on your federal and/or local tax return. Information on MA real estate transfer taxes and who pays them, as provided above, is strictly general information. Contact Peter DaMore at Law Offices of Peter T. DaMore Jr. by calling 781-229-7900 or emailing pdamore@ptdlaw.com with any questions.

Refinancing a home mortgage may lead to big savings if completed under the correct circumstances. Every loan and homeowner varies, so an opportune time for one person may not be for another. Before starting a refinance, take a look at these 5 factors for refinancing a home loan.

5 Factors For Refinancing A Home Loan

1. Your Unique Needs

Your personal situation needs should play an important role in your decision to refinance and the loan program you should select. When do you intend to sell the home? Will you possibly refinance again in the future? Do you intend to convert the home into a rental property? Does your existing home loan have a pre-payment penalty? How much do you have available to cover closing costs? These are all important questions to ask yourself and to discuss with your loan advisor.

2. Interest Rates

Interest rates are based on market conditions, credit rating, loan amount, and loan term. First, consider whether rates are expected to rise or fall based on what is going on in the economy and with the federal government. You cannot predict the future, but there may be particular circumstances that may directly impact rates. Second, find out what rate you qualify for with your credit history and loan amount. The one you can get may not necessarily be the advertised rate. You will receive better interest rates if your credit score is high. Lastly, compare the current interest rate to your old one. The savings (per month and over the length of the loan) should be compared against the expenses associated with refinancing. Typically, it is worthwhile if the new rate is one percent or more less than the existing rate.

3. Expenses for Refinancing

It is useful to understand both the overall cost of refinancing and the cash due at closing. Every mortgage has fees associated with it. Loans marketed as having no closing costs simply mean that the costs are either lumped into the loan amount or are covered by a higher interest rate. Some costs, such as pre-paid expenses, are not classified as closing costs but will result in out-of-pocket expenses.

Usually, a refinance will require some money brought to closing. Funds that you receive back from your old escrow account can offset some of this cost. Additionally, you may have one month without a loan payment. For example, if you refinance during the month of June, you will have already submitted your June mortgage payment and the first installment due on the new mortgage will not be due until August 1st. An exception to requiring money at closing is a cash out refinance. In that case, closing fees would be deducted from the equity funds.

4. Real Estate Market Value

You may have heard the term loan-to-value. This percentage reflects the amount of your loan against its current market value. Because the real estate market continually changes, so will the value of your home. Although a real estate agent can prepare a good estimate of market value, an appraisal is required at the time you refinance to pinpoint the exact figure. Maximum loan-to-value percentages may apply (the exact ratio depends on the mortgage program). If the value of your home is less than the mortgage balance, you will have trouble refinancing without funds to reduce the loan amount. Some financing programs, such as an FHA streamline refinance, may waive the appraisal requirement and therefore make this less of an issue.

5. Qualification Conditions

Every loan program has specific qualifications and limitations. Below are common factors:

• Loan-to-value Percentage
• Credit Rating
• Property Type
• Dollar Amount of Loan
• Reduction in Monthly Payment
• Whether You Have Any Non-occupant Owners
• Mortgage Insurance Amount and Duration

MA Refinance Considerations – The Next Step

As you see from the 5 factors for refinancing a home loan above, deciding to refinance includes more than comparing interest rates. It requires consideration of personal factors and weighing of all options. An experienced loan officer will help you analyze these different pieces of information and assist you with making an educated decision. For additional MA refinance considerations, contact Peter DaMore at Law Offices of Peter T. DaMore Jr..

Everyone has a right to dispute mistakes on their credit report. However, home buyers should be conscious of the effect that this may have on obtaining financing. This article offers important information on disputed trade accounts and the effect on MA mortgages.

Preparing for a Home Purchase

If you are thinking of buying real estate in the future, be sure to review your credit report far in advance. This affords you the opportunity to identify and address mistakes prior to applying for a loan. Ideally, you would want the disputes cleared before beginning the home purchase process. If you do have any pending items, notify your mortgage consultant early in the process. Do not assume that it was noticed on your report during the pre-approval process.

What Are Disputed Trade Accounts

If you identify an error on your credit report, you have the ability to dispute it by sending information to the three credit bureaus. A note is made in your credit file and the accounts are considered disputed trade accounts. Credit bureaus may opt to disregard the specific items when calculating your score, so they might not impact your score while in process. Usually, the notation is removed when the issue is resolved and, if necessary, the needed corrections are made. This process can take many months. Even though you may not notice a reduction of your score, the information on the dispute can cause other problems.

Disputed Trade Accounts And The Effect On MA Mortgages

Many mortgage companies utilize electronic underwriting systems. Your credit score and other information from your credit report are analyzed by the program. Disputed trade accounts may lead a loan application to be denied or diverted to manual underwriting. Gather all paperwork and information related to the disputed trade accounts. If it was a debt that you settled but was not correctly reflected in the credit reports, have statements displaying the amount owed and verification of amounts paid. Also prepare a letter explaining the scenario. This may improve the likelihood of getting your financing approved. Keep in mind that many mortgage companies may not approve a loan if there is a dispute on file, regardless of the circumstances. This is in place in an attempt to reduce fraud but, unfortunately, can often hurt buyers with reasonable claims. To be safe, it may be best to fully address credit disputes before submitting an application.

Scheduling and seeing properties can be a bit cumbersome. There are a few things to consider when selecting homes to view, prior to showings, and during showings. The MA buyer real estate showing guidance below can help make it a little bit easier.

Deciding Real Estate to See

Price Range Is Important

It will be heart breaking to fall in love with homes that you cannot afford. This can also waste significant time and energy. Request a home loan pre-approval and know what you can purchase prior to seeing homes for sale. This is probably the most critical of the MA buyer real estate showing guidance.

Home Features

Compile a wish list with amenities that you must have and those that are optional. Keep in mind that no property is perfect and that you may need to identify amenities that you can live without. Ask your real estate broker for advice on what different features may cost or are commonly available in real estate within your price range. Considering this information ahead of time will help make the process easier.

Things You Can Do Ahead of Time

Research

Review virtual tours of homes online ahead of time and eliminate listings that obviously do not match your criteria. If possible, drive by properties ahead of time. Ask your real estate representative about specific neighborhoods and market trends. In markets with an abundance of listings, narrowing down options will make the time spent visiting listings in-person less time consuming.

Grouping Viewings

Make good use of your time by planning visits to multiple properties during the same trip. Your real estate professional will decide the optimal order for viewing them and actually contacting listing agents and/or sellers to verify appointments. Try not to be too ambitious as you can get information overload.

Advice During Showings

MA buyer real estate showing guidance would not be complete without information for during and after showings. If you know right away that you will not consider a property, do not waste any additional time seeing it. This allows you to spend additional time in properties that interest you. Write down your thoughts during or shortly after a showing. List things that you liked and did not like. These personal notes may help you remember each listing later. It is not necessary to see and remember every aspect of a listing in one visit. Think of first viewings as an opportunity to narrow down your options and return for second showings for properties that you are really interested in. You may catch different things upon seeing a property a second time or at a different time of day.

Additional MA Buyer Real Estate Showing Guidance

Real estate brokers know the area and understand how to best arrange showings. Select a professional that understands your requirements and trust that agent to guide you through the process. Your agent can also offer additional MA buyer real estate showing guidance. This guide was compiled by Peter DaMore at Law Offices of Peter T. DaMore Jr. and is intended only as an overview.

Home owners often evaluate selling a property on their own with the primary objective of making more money. Experience has proven that it can actually cost more than it saves,… for sale by owner may result in overpricing by MA sellers. Below are a few considerations for sellers before deciding sell by owner.

Proper Pricing

The real estate market is constantly moving. Pricing will determine how long it remains on the market, what amount it eventually sells for, and if it sells at all. Real estate agents have the knowledge and experience to assist sellers with marketing price based on their specific property, location, and desired time frame, and to adjust it as required for fluctuating market conditions.

Comparable Properties

It all begins with finding comparable listings. Homeowners usually make a few errors at this step.
1. Looking back to the value of properties in the area and what they sold for years ago.
2. Referring to the price of their home from a past mortgage refinance.
3. Selecting varying styles or types of homes (i.e. comparing a split-entry to a colonial).
4. Pulling up active listings that are incorrectly priced or not selling.

Using incorrect homes for pricing will result in incorrect values and typically overpricing.

Making Price Adjustments

Another aspect of pricing is making adjustments for differing amenities. It is rare to find two identical listings, so adjustments are generally made for interior space, acreage, and amenities such as parking spaces, bathrooms, fireplaces, condition, and updates. Homeowners naturally use the amount paid for upgrades. However, the market value of most items do not often match the cost for them. In fact, certain expenses may not add any value. Real estate professionals are familiar with what appraisers will calculate for adjustments and will apply those properly for pricing.

For Sale By Owner May Result In Overpricing By MA Sellers

Overpriced homes can cost homeowners valuable energy and money. Listings can sit on the market with little activity or with interest from buyers that are strictly wondering why the price is so high. additionally, buyers have a negative view on homes that have been on the market for a long time and are likely to offer less even if the price is reduced later. In a declining market, a listing can even be worth less by the time it sells. All of this leads a for sale by owner home to sell for significantly less than it may have with the proper guidance of a real estate professional. That difference could be more than what a seller thought he or she was saving by trying it alone. This For Sale By Owner May Result In Overpricing By MA Sellers topic was published by Peter DaMore at Law Offices of Peter T. DaMore Jr..

Condominium purchases can be different from single family home purchases. There are more factors to evaluate. This blog provides condominium purchasing tips for MA home buyers.

Definition of a Condo

Condos are buildings with two or more units with shared common areas such as land and hallways. Shared components belong to the association and every owner has a percentage interest. The exact share is normally based on total number of units. Condo owners must maintain the interior of their own unit but share the expense of common areas such as land. Due to the common elements and expenditures, it is important for MA buyers to review certain paperwork ahead of time.

Information You Need to Know

Using Different Loan Programs

Financing programs will restrict loans to units in qualified complexes or based on specific criteria. For example, FHA requires specific owner occupancy percentages, satisfactory reserves, and a variety of other items. Condo complexes that cannot obtain FHA approval will be more difficult to sell. Buyers intending to use FHA should find out whether a complex is approved prior to spending too much effort viewing units there.

Owner Occupied Units

Every complex has some rental units. High owner occupancy percentages are better from a mortgage standpoint. High rental rates also tend to be less desirable.

Recurring Fees and Reserves

Most condominium complexes have monthly fees. The fees are for common expenses. A certain portion is also placed into a reserve to prepare for upcoming maintenance. It is important for potential buyers to ask how much the condo fee is, what is covered, the history of changes, and expected changes in the future. Buyers should also ask about the current reserve. If a complex does not have enough to cover a significant repair, all unit owners will be billed for the shortage. This is called an assessment and can be a lot for owners to cover.

Know the Restrictions

The biggest difference between single family and condo homes relates to restrictions. It is necessary to obtain the rules and regulations in advance and determine whether they are acceptable. Rules can apply to both common spaces and interior spaces.

Condominium Purchasing Tips For MA Home Buyers

There are risks to buying any type of listing, but condo ownership has some additional components that buyers must understand. Carefully review all documentation and get help from a real estate attorney for help. Also think about the future market value of units based on the finances of the complex and mortgage qualification. Contact a real estate broker to furnish historical information on sales in the complex. All of this helps buyers develop an informed decision about a condo purchase. This article on condominium purchasing tips for MA home buyers was shared by Peter DaMore at Law Offices of Peter T. DaMore Jr.. Contact Peter at 781-229-7900 or pdamore@ptdlaw.com for facts on particular complexes in MA or for help with other real estate matters.

Mortgage insurance is generally included in a loan when a home buyer puts less than twenty percent down of the value of a home. It protects mortgage companies against financial loss should a homeowner fail to pay. Although it insures the lender, it is commonly the responsibility of the buyer as a closing cost and additional recurring amount. In certain cases, a lender will cover the expense of the mortgage insurance. This article important information on lender paid mortgage insurance for MA home loans.

Important Information On Lender Paid Mortgage Insurance

Some lenders will provide lender paid mortgage insurance loan programs in exchange for a higher interest rate. When a homeowner pays mortgage insurance directly, it stays in effect while the loan amount exceeds eighty percent of the original price or current market value. So at some point, the monthly payment decreases when mortgage insurance is no longer applicable. With lender paid mortgage insurance loans, this reduction in monthly payment will not occur since the higher interest rate continues for the life of the loan. The only means to alter it is to refinance.

Choosing Between Owner Paid and Lender Paid Mortgage Insurance

Even though the interest rate on lender paid mortgage insurance loans may be greater, it can still lead to a lower monthly payment for some buyers. Additionally, mortgage insurance may not be tax deductible for buyers whose annual income is higher than certain IRS guidelines whereas interest paid on a loan is normally tax deductible. Therefore, opting for an increased interest rate and lender paid mortgage insurance might also result in better tax savings for some homeowners.

Help with MA Home Loans

Lender paid mortgage insurance loans can be a good option for some buyers. It is important to analyze the advantages and understand the immediate and long-term benefits. The above is important information on lender paid mortgage insurance for MA home loans and is intended only as an introduction.

No closing cost mortgages are usually requested by buyers with few money to bring to closing. The phrase is a bit misleading as there is always a cost to lending money. The way those expenses are recouped by a mortgage company may be structured differently. The following is an explanation of MA no closing cost mortgages, what you should know, and how it compares to programs with closing costs.

What Are No Closing Cost Mortgages

Closing costs exist with all loans because mortgage companies have expenses related to processing mortgages, compensating brokers, etc. In a usual loan, the exact charges are outlined and listed as closing costs. This leads to more money due at closing, which may be a challenge for all home buyers. No closing cost mortgages were developed to minimize this situation.

There are two primary ways that mortgage companies are able to offer no closing cost mortgages. One method is to obtain a larger interest rate, allowing them to recoup the closing costs over time. The other is to roll the closing costs into the amount of the loan.

Pros And Cons

Whether to use no closing cost mortgages must be based on several considerations. If you plan to pay off your mortgage within a few years, then it can be a good option since the higher interest rate would be effective for only a short period of time. This can be true during times where interest rates are high but are expected to lower in the future or if you plan to own a property for only a few years. On the other hand, if you intend to hold a mortgage for the long term, then the expense of an increased interest rate over the years can be significantly higher than simply covering the closing costs now.

It is important to note that no closing costs does NOT mean that money will not be required at closing. Closing costs really only apply to only some items. Other items, such as escrows, are considered pre-paid expenses. They are not put in the closing costs classification and will therefore still be due at closing.

MA No Closing Cost Mortgages

MA no closing cost mortgages may or may not be the best solution for your mortgage needs. To make an educated decision about what financing program works best for you, compare both the interest rate and fees of each loan. Also consider how many years you expect to keep the mortgage and the the long-term cost. Most of this data may be reviewed by requesting a good faith estimate from your lender.

Credit ratings are generated by three credit agencies (Experian, Equifax, and Transunion). They each use a differing methods to calculate a numerical credit score that reflects your credit history. The higher the score, the less risky you are as a borrower. Specific activities can have a adverse influence on your rating and could possibly cause you to get denied for a home loan. Below are advice for potential MA home buyers on credit activities to avoid before buying a home.

Credit Activities To Avoid Before Buying A Home

Delinquent Behavior

Missing payments demonstrate poor credit habits and consequently reduce your score. How many payments you have missed (30, 60, or 90+ days) and how many times you are late also play a role. Delinquencies remain on your credit report for a very long time.

Collection Accounts

If you are really behind on payments and a lender has given up on their own attempts to obtain anything from you, they may move your debt to a collection company. This appears on your credit report. The information will stay on your credit file even after you pay off the debt.

Lender Charge-off

If a creditor is unable to collect the complete balance that you owe to them, they may “charge-off” the uncollected amount. This may apply if you entirely neglect to pay or if you settle for a lower amount. Charge-offs appear on your credit file for 7 years. Future creditors will view this item and debate how likely you are to continue with that behavior.

Matters of Public Record

Bankruptcy, tax liens, judgments, foreclosures, and other similar matters are part public record. Regardless of whether you settle those accounts, the initial reporting stays on your credit score. Particular things appear for seven to ten years whereas others (such as liens) remain forever. Obviously, it is critical not to let issues get this far.

Advice For Potential MA Home Buyers

All of the credit activities to avoid before buying a home noted above make you a risky borrower and may cause higher mortgage rates or completely stop you from getting loans. Demonstrate responsible behavior and it will save time, money, and disappointment when it is time to buy real estate. These are the best advice for potential MA home buyers. this includes only a few common credit mistakes. Speak with a credit professional for information on your particular situation.