Information that Matters. Solutions that Benefit You.
What you should know about the market
• The recent nationwide foreclosure moratorium brought about a new term used to describe people who sign documents without carefully reading them: robosigning. Although robosigning described bank employees who signed off on thousands of documents without reviewing them, they’re not the only ones blindly signing documents they haven’t thoroughly read. Consumers often do the same thing.
• It is especially important that consumers don’t “robosign” on a new mortgage. When reviewing loan documents, consumers are advised to search for two particular terms: A prepayment penalty and the margin rate on adjustable mortgages.
• A prepayment penalty – a fee for paying off a mortgage early – ranges from 1 percent to 3 percent of the total mortgage amount. Consumers who find this clause in their mortgage note and weren’t told about it are advised to ask to have it removed during the loan application process.
• For borrowers with adjustable-rate mortgages (ARM), consumers should check how their rate will adjust after the first few years. The adjustment is based, in part, on the profit the lender makes when it sells the loan to an investor, which is called the “margin rate.” Buyers can find the margin rate on the second page of their mortgage note. If the number is higher than 3 percent, consumers should question the margin rate. Reasonable rates generally are considered to be in the 2.5 to 3 percent range.
For sellers with homes above conforming price ranges, price your home to sell. The larger the inventory, the less chance your home has to find the right buyer unless you price your home attractively.
If you’re buying, the key word is preparation. Be ready with your financing paperwork and get pre-qualified for your loan and show your have adequate cash reserves. In multiple offer situations, lenders and sellers respond best to buyers who have financing in place and ready to go. See www.hslca.com for more details and financing options.
Advice for Sellers: Homes in the conforming ranges are selling faster than they can be replaced in inventory. If you’ve been holding your home off the market for better terms, now’s the time to take advantage of a wider pool of qualified buyers.
Detached homes stand alone and share no common walls with any other home. Attached homes share at least one common wall with another home, including condominiums, townhomes, and duplexes among other types of homes.
