Showing posts with label Buyers. Show all posts
Showing posts with label Buyers. Show all posts

Jan 3, 2016

Does an Increase in Interest Rates Affect a Buyer’s Mortgage Payment?

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Happy New Year 2016. 

I've  been asked about the meaning of last months Federal Reserve’s decision to raise interest rates by a quarter of a point. So I thought you might appreciate a dose of reality about what this means for real estate from an expert, Mark Maimon at Sterling National Bank. I'm happy to announce that Mark will be a contributing author to this blog providing content to help buyers and sellers in NYC make informed real estate decisions.

How much does an increase in interest rates affect a buyer’s mortgage payment?

By Mark Maimon Vice President, Sterling National Bank

The real estate industry is bracing itself for an increase in mortgage rates and everyone is wondering how it may affect buyers’ desire to purchase.  What most people don’t understand is how much a change in rates affects an applicant’s mortgage payment.  

As you can see below, the difference in monthly payment is not as significant as one would typically think and that’s why we don’t anticipate that a rate increase of even 1% will have a significant impact on demand for property in general.  Here are a few scenarios to illustrate our point:

On a $500,000 loan, every half percent jump in rate costs $142 more per month
On a $1 million loan, every half percent jump in rates costs $284 more per month
On a $2.5 million loan, every half percent jump in rates costs $709 more per month

If a buyer decides not to buy because of a relatively small difference in the monthly payment as outlined above, then they are probably over-extending themselves financially in that price range anyway.  That’s why we don’t think that even a 0.5% to 1% difference in interest rates is going to have a major sustained impact on the demand for property in the long-run (although we may see some initial hesitation as buyers become used to a “new normal” with rates).  

Content was written and provided by Mark Maimon at Sterling National Bank.  Please contact Mark for all of your mortgage needs per the contact information below.  All material is protected by applicable copyright laws. 

212-401-0843
NMLS ID #3550



Mar 31, 2014

Dos & Don'ts For Home Buyers

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The following Dos and Don't for Buyers comes from a lenders perspective. For Manhattan coop buyers finances will be even more scrutinized by the coop board than by the lender. 



Most coops have even more stringent financial requirements than lenders so don't assume that a loan commitment from a lender will  necessarily approve you  for a coop purchase. A Co-op board will require complete financial disclosure. They will look into your financial history, current and past income, assets, liabilities and references when evaluating your board package.



Dos & Don't s For Buyers

Do:

·    Continue to make housing payments on time: Until closing is set, continue to pay your mortgage or rent in a timely manner.

·    Stay current on all of your bills: Maintain good credit by paying bills on time.

·    Verify all information on your credit report: Request a copy of your credit report to verify the accuracy of the information in your accounts.

·     Make yourself available for conference calls with creditors: Depending on the accuracy of your report and the time line of settlement, credit companies may need to verify further information via conference calls. Remember - your credit may be pulled prior to the closing of your loan.

·     Save pay stubs and bank statements: Underwriters will require no less than two consecutive months of pay stubs and bank statements for qualification purposes.

·     Alert your lender if your job, salary, or compensation changes: If your income changes during the application process, alert your mortgage advisor immediately.

Don’t:

   Establish any new credit:
1.   Apply for, or open new credit cards: Opening new credit will not only add additional inquiries to your report, but will also negatively impact your score. Even if an account reflects a zero balance, a trade line has been added to your report.
2.   Co-sign for a loan or line of credit: When co-signing for a loan or line of credit, the payment will show up on your credit report and count against your debt.
3.   Don't misrepresent anything. Don't omit negative information. It is better to be upfront and explain something derogatory from the past in coop board package than to have the board discover it.

·    Close or consolidate credit card accounts: Closing credit card accounts or consolidating debt can have a negative impact on your score as a result of decreasing your credit capacity.

·     Increase balances on your existing accounts: Because a new report may be pulled just days before closing, the updated balances will be reflected resulting in resubmission of the loan. This may cause not only a delay in settlement, but can also result in a denial of the loan.

·     Make large deposits or transfers without proper documentation: Lenders require a “paper trail” for any large deposits or account transfers. (Acceptable documentation includes but is not limited to deposit slips, copies of checks, loan paperwork, etc.)

 Typical Co-op Board Requirements: (what the board is looking for)

  • 1. 25-30% Income to debt ratio. Housing costs should not be more than 25% -30% of income depending on the particular coop.
  • 2. At least 1 years worth of mortgage + maintenance in liquid assets or two years of maintenance after closing costs
  • 3. Increase in salary from previous year, potential future earning. 

Buying-coop-be-prepared-and-qualified
Coop-board-requirements
Tips to Help Pass A coop Board Interview



Aug 10, 2013

President Obama Answers Questions on Housing

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President Obama answered questions from US homeowners, renters and prospective buyers moderated by Zillow CEO Spencer Rascoff.

 
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This blog site is designed and published as a consumer service by local real estate broker to help Manhattan, New York City buyers, sellers and renters make informed real estate decisions. This site and its feeds are owned and operated by Mitchell J Hall, a NY State licensed real estate associate broker associated with The Corcoran Group and member of the Real Estate Board of New York.

Legal Disclaimer - The opinions expressed here are those of the authors and do not neccessarily reflect the opinions or policy of The Corcoran Group. This site is not the official website of The Corcoran Group or its affiliated companies, and neither The Corcoran Group nor its affiliated companies in any way warrant the accuracy of any information contained herein. Any product and/or services offered for sale on this website shall not be considered an offer to sell such goods and/or services in any state other than New York.

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