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Can You Get Me the Best Price Available For My Home?

If we, in Westchester County go back to 2002, everyone wanted to buy a home, and we wanted everyone to be able to get a mortgage in order to buy a home. Unfortunately, we went too far in that direction and people who were not ready for homeownership entered into it. But there are times when we go too far in the other direction – when qualified people aren’t entering into homeownership. It’s up to us as Realtors to give good advice so our buyers don’t get caught in either situation (wanting a home they can’t afford or thinking they can’t achieve homeownership). We are counselors – we must educate with the heart of a teacher. Explaining that if prices are going up, they should buy before prices go up even more and if prices are falling, they shouldn’t necessarily run away from the idea of owning a home.
NAR has a Home Affordability Index. This index measures whether or not a typical family could qualify for a mortgage loan on a typical home based on price, mortgage interest rate, down payment and ratios to debt. Know what the current numbers are and be able to explain them to others. You see, if prices are falling, affordability is getting better.

There’s cost vs. price and you have to be able to look at the overall picture. Maybe the time to buy a home is in a difficult market. You shouldn’t be worried about price; you should be worried about cost. Cost is determined by price and interest rates. If the price falls but the interest rates go up, then cost may be greater. The price may sound good, but interest rates impact the cost in different ways. Even if prices fall, they would have to fall 10% to make up for just a 1% increase in interest rates to get the same mortgage payment.

At times, people are afraid to buy and may think they’re doing the right thing by renting. Let’s take a look at the Westchester  rent vs. buy situation. According to the Consumer Price Index, prices for rent of a primary residence in the Westchester area have increased at an average rate of a little more than 3% per year for the last ten years. Experts are projecting rents to increase by 5% annually over the next few years. If you buy a home with a 30 year fixed mortgage and you don’t refinance, you know what your payments will be for the next 30 years. There are no surprises. And, at least for now, homeowners enjoy significant tax savings if they are paying mortgage interest.

The reason people buy homes is the same generation after generation. It’s what Americans do. They want the best education for their children, the safety, the sense of community, and all the other benefits surrounding home ownership. They don’t need the studies and statistics, but you need them so you can prove to people that their gut feelings are already good and that they should consider homeownership if not now, in the future when it’s the right choice and possible for them.

People have fear when it comes to buying. This fear comes from not understanding and it can cause paralysis. It’s up to us as Realtors to make sure they understand these concepts.  We are the guardians of the American dream. Make sure everyone who wants to achieve this dream has a clear path and you have the lantern to light that path with knowledge.

Mortgage News Daily

  • MBS RECAP: They Can't Even Let us Enjoy Green Days Anymore!

    Posted To: MBS Commentary

    What a frustrating day! Yes, it's true that bonds ended up in positive territory at the close, but it would have almost been better to endure a modestly weaker day without the volatility. As it stands, we were built up largely to be let down . Stocks began selling fairly aggressively overnight. 10yr Treasury yields were 5bps lower before domestic trading ever began and continued into even stronger territory by 10am ( 3.11% at the best levels ). All of that coincided with additional weakness in equities. Up until that point, MBS were stronger as well, but not nearly as noticeably as Treasuries. To make matters worse, the average lender didn't pass along much of the improvement on rate sheets. That's not uncommon and we would have been well within our rights to expect additional improvements...(read more)

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  • Mortgage Rates Barely Budge Despite Market Volatility

    Posted To: Mortgage Rate Watch

    Mortgage rates didn't move much for the second day this week. Unlike yesterday, there was a relatively massive amount of volatility in underlying financial markets. This was especially true for stocks and the US Treasury market (which sets the tone for the broader bond market where mortgages operate). Even if we look specifically at mortgage-backed securities (MBS), we see some of the best gains this month. In fact, mortgage rates likely would have ended the day with more noticeable improvement if the gains had remained intact. Unfortunately , the strength began to erode in the late morning hours. Bonds had benefited from massive stock losses, but starting just after 10am, stocks began to bounce back while bonds weakened (weaker bonds = higher rates). Momentum kicked into higher gear later...(read more)

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  • An Update on MBS Underperformance vs Treasuries

    Posted To: MBS Commentary

    Duration is a key variable in deciding value to bond investors investors. In fact, many investors have a duration target for their portfolio. Duration changes differently for MBS vs Treasuries, and this contributes to differences in relative performance (e.g. when you see MBS not gaining as much ground as Treasuries during a rally). A 10yr Treasury note will always have a 10yr duration (or more specifically, a predictably declining duration as time goes by). As rates rise, investors want less duration because they could get higher rates of return with newer debt. Whereas the duration of any 10yr Treasury note will be what it will be regardless of rising rates, the duration of the average mortgage would be getting longer (owners less likely to refi out of a below-market rate, and possibly even...(read more)

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  • Carson Plan: Deregulation to Promote Affordable Housing

    Posted To: MND NewsWire

    Remember the old Point/Counterpoint segment on CBS's 60 Minutes? Two political commentators, a far right conservative and an equally lefty liberal argued the merits or lack of a current controversial issue. Two recent articles in the same issue of The National Review were reminiscent of that feature - except this was two conservatives arguing which parts of Ben Carson's recent performance were more meritorious. They both had their points, and both managed to entirely overlook a singularly important one. The topic was the Secretary of Housing and Urban Development's recently announced plan to combat the lack of affordable housing by taking on stringent local zoning and land-use regulations. The centerpiece article is written by Michael Tanner, a senior fellow at the Cato Institute. He mentions...(read more)

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  • Loan Limit Thoughts; Long List of Credit Changes and Lender Updates

    Posted To: Pipeline Press

    Historically the FHFA, and with it Freddie and Fannie, announce official loan levels for the following year soon after Thanksgiving . (There are always rumors prior.) The loan limits are based on home prices around the nation. After 2008, despite the prices in many areas dropping, the Agencies did what they could to maintain stability. Prices in most areas have since rebounded, and so it is expected by many that we'll see an increase in the conventional conforming loan limits. But there is noise out there of the FHFA scaling back its presence and market share. This may take the form of eventual cut backs on programs (should Fannie & Freddie support landlords buying non-owner houses?). Or will they cut high balance loan limits? Changes take a while, so stay tuned. Credit Changes - Lender...(read more)

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  • MBS Day Ahead: Consolidation Breakout Sets Up Important Test For Bonds

    Posted To: MBS Commentary

    Yesterday was boring and uneventful. Bonds seemed to be trying everything in their power to remain range-bound and avoid breaking out of the consolidation pattern we'd been tracking. By contrast, today's bond market is unrecognizable --seemingly determined to break forcefully outside the consolidation pattern. There were significant gains overnight. As noted in this morning's first update on MBS Live, these arrived hand-in-hand with heavy selling in stocks. The goal/challenge from here will be to convincingly break below the pivot point that we've been eyeing ever since we broke above coming in the other direction. 3.13% in 10yr yields is the line in the sand standing between us and more livable yields. Note: the chart above was snapped a few minutes before the last leg of the...(read more)

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  • MBS RECAP: Uneventful Start; Consolidation Continues

    Posted To: MBS Commentary

    As of October 16th, we'd been tracking the most recent consolidation in bond yields (and stocks for that matter) waiting for a breakout to suggest the next dose of momentum. Stocks broke higher with conviction while bonds merely trickled sideways. Still, they'd technically broken the consolidation, thus implying more momentum toward higher rates. By the end of the following day, it showed up as 10yr yields moved back over 3.2%. That began a 2nd, bigger, broader consolidation pattern--the one we're currently tracking (discussed in the Day Ahead ). Much like the previous pattern, the current consolidation is set to run out of room no later than Wednesday of this week. It took an exceptionally calm day today in order for bonds to remain inside the lines. If there's an indication...(read more)

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  • Mortgage Rates Little-Changed to Begin The Week

    Posted To: Mortgage Rate Watch

    Mortgage rates didn't move much today. Lenders who made changes to Friday's rate sheets generally did so toward slightly higher rates. Actually, it would be more precise to say those lenders raised upfront costs associated with any given rate. This is typical on days where the broader rate market is slightly weaker, but not weak enough for mortgage lenders to adjust mortgage rates by the standard 0.125% increment. In the bigger picture , this leaves the average lender quoting conventional 30yr fixed rates of roughly 5% on top tier scenarios. There were no major developments or economic reports to move the bond market (which underlies rates) today. The rest of the week is on the light side as well, but things pick up on Thursday and Friday. Loan Originator Perspective Bond markets slumbered...(read more)

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  • Training & Events; False Claims Penalty; Lender Products & Services

    Posted To: Pipeline Press

    Residential mortgage bankers are notoriously bad at actually retiring. They usually seem to come back as teachers, consultants, remodelers, etc. But plenty of people do retire, and per U.S. News the #1 place to retire is... Lancaster, PA ? Bring a sweater. Legal news Eagle Home... Universal American Mortgage Company, LLC, based in Miami and operating as a subsidiary of Lennar Corporation, has agreed to pay the United States $13.2 million to resolve allegations that it violated the False Claims Act by falsely certifying that it complied with FHA mortgage insurance requirements in connection with certain loans. "...between January 1, 2006, and December 31, 2011, UAMC knowingly submitted loans for FHA insurance that did not qualify. The United States further alleged that UAMC improperly incentivized...(read more)

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  • MBS Week Ahead: Limited Data, Bond Auctions, and More Indecision

    Posted To: MBS Commentary

    The basic candlestick or bar chart that the average bond analyst uses to track 10yr Treasury yields is doing a good job of capturing the current opposing forces in rates. On the one hand , the combination of economic data, NAFTA 2.0, and Fed comments (among other things) makes a logical case for higher rates. This is easily seen as the pervasive series of "higher lows" over the past 2 months. On the other hand , doubts about the sustainability of lofty economic numbers and doubts about the market's ability to thrive with 10yr yields over 3.25% make a case for support. This can be seen in the less-developed series of "lower highs" leading back from the long-term high 2 weeks ago. The result is the typical triangle--a consolidation pattern where the higher lows and lower...(read more)

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Westchester County, NY

 
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2010-2011 Westchester Top Realtor

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Bonnie Koff  |  Licensed Associate Real Estate Broker  |  William Raveis Legends Realty Group  | Tarrytown Office 
914-332-6300  |  37 Main Street, Tarrytown, New York 10591  |  Email