Karen Adelson - Barrett Sotheby's International Realty



Posted by Karen Adelson on 6/14/2016

Are you looking to buy a bigger home? If you are looking to make the move a jumbo mortgage might be right for you. A jumbo mortgage is a home loan with an amount that exceeds conforming loan limits set by the Office of Federal Housing Enterprise Oversight (OFHEO) or better known as Fannie Mae and Freddie Mac. Currently, the loan limit is $417,000 in most parts of the United States, but can increase to $625,500 in the higher cost areas. OFHEO sets the conforming loan limit size on an annual basis. Jumbo loans have slightly higher interest rates because they carry more credit risk.




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Posted by Karen Adelson on 5/24/2016

With mortgage rates at all time lows, you might be wondering if you should be considering refinancing your home. While it may seem like a great thing to do, there are a few things to consider before you decide. An obvious reason for refinancing to a lower interest rate is the monthly, and even more importantly the long term, savings you will get. Depending on the decrease in interest rate and the amount of the loan, you could see a savings of at least $50/month or $600/year or $6000/10 years. Refinancing to a shorter term loan can also help save on the interest you pay over the life of the loan so if you can afford a 15 year mortgage the benefits outweigh that of a 30 year. Some things to consider - If you have owned your home for a long time, your monthly payments are going more towards the principal of the loan, not the interest. Refinancing would cause you revert back to monthly payments of more interest than principal, losing the equity that you have built in your home. You may be charged for an appraisal on your home which can be around $500. The bank will want to make sure that you are refinancing for an amount your home is worth so some out of pocket expense is required. If you plan on moving in the next few years, refinancing may not be worth the amount you will pay in closing costs. There are several refinancing calculators available on the web including at http://www.zillow.com/mortgage-calculator/refinance-calculator/ and http://www.smartmoney.com/calculator/real-estate/should-i-refinance-my-mortgage-1302835660427/. No matter what you choose, being fully informed of all the options, costs and advantages/disadvantages is key to a successful refinance. Make sure you talk with you current lender, as well as other lenders to get the best refinance possible.




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Posted by Karen Adelson on 12/1/2015

Mortgage rates are at historic lows and there is no better time to buy a home. Do you qualify for those low advertised rates? Will you be able to secure a mortgage? Studies show that 6 in 10 people do qualify for mortgage loans. For those that can't qualify here are ten reasons why a would-be borrower might face rejection: 1. A low credit score will keep you from getting a mortgage. Typically, a score less than 620 is unacceptable by most lender standards. 2. A maxed out credit card threshold will stop a mortgage in its tracks. If your balance more than 30 percent of the allowable credit lenders will take pause. 3. Multiple credit inquiries may drop your credit score. Limit your credit inquiries to mortgage-only credit pulls within a 30-day period. 4. Did you Co-sign a loan with someone? If so, plan to provide 12 months of canceled checks showing they make the payments to the creditor. 5. Other housing liability payments or a consumer loan for a vehicle may prevent your loan approval. Lenders are looking for you to have double the income to offset each dollar of debt you carry. 6. If you are self-employed you may not be showing income under a Schedule C. This reduces your borrowing power. 7. Claiming many unreimbursed business expenses and losses on your taxes may help you pay less taxes but it also can reduce your borrowing power. 8. If you change jobs often this could also hurt your chances at a mortgage. If you occupational status has changed in the past two years it can hurt you. 9. If you are planning on using cash for your purchase think again. All monies must come from some kind of a bank account. 10. Don't plan on transferring money from different accounts during the loan process. Be prepared to show full bank statements and a chain of deposits etc. Your mortgage professional should be able to look at your credit, debt, income and assets and make a determination of whether you qualify for a mortgage.





Posted by Karen Adelson on 4/28/2015

Who wouldn't like to pay off the mortgage early? Getting rid of mortgage debt will allow you the security and the psychological benefit of owning your home free and clear. There are lots of ways to accomplish these goals. Here are some suggestions on ways to get rid of your mortgage debt. Compare the options and do what works best for you. 1. Add more money to your monthly payment. This will help pay down the principal balance shortening the length of your loan. When you pay more on your principal is gets lower, and the lower your principal gets, the more every payment from then on is applied to principal, as less goes to cover interest expense. 2. Refinance. Refinance your mortgage to 10, 15 or 20 years. Your payments will be higher on a 15-year loan, but often the rate is lower and the loan is paid off much quicker. If you are afraid to take out a 15- year loan take out a 30-year loan, but make payments as if you had a 15-year loan. 3. Make biweekly payments. Most banks have a biweekly payment plan. Since there are 52 weeks in the year if you pay half your regular mortgage payment every other week, you'll have made 26 half-payments, or 13 payments. There are options when it comes to owning your home free and clear. Just decide which one works for you and be on your way to being mortgage free.





Posted by Karen Adelson on 1/20/2015

The first step in home buying is getting a mortgage. Many home owners also find themselves in a maze when they start the refinance process. Navigating the mortgage process can be confusing. There is so much to know between rates, types of mortgages and payment schedules. Avoiding making a mistake in the mortgage process can save you a lot of money and headaches. Here is a list of the biggest mortgage mistakes that potential borrowers make. 1. No or Low Down Payment Buying a home with no or a low down payment is not a good idea. A large down payment increases the amount of equity the borrower has in the home. It also reduces the bank’s liability on the home. Research has shown that borrowers that place down a large down payment are much more likely to make their mortgage payments. If they do not they will also lose money. Borrowers who put little to nothing down on their homes find themselves upside down on their mortgage and end up just walking away. They owe more money than the home is worth. The more a borrower owes, the more likely they are to walk away and be subject to credit damaging foreclosure. 2. Adjustable Rate Mortgages or ARMs Adjustable rate mortgages or ARMs sound too good to be true and they can be. The loan starts off with a low interest rate for the first two to five years. This allows the borrower to buy a larger house than they can normally qualify for. After two to five years the low adjustable rate expires and the interest rate resets to a higher market rate. Now the borrowers can no longer make the higher payment not can they refinance to a lower rate because they often do not have the equity in the home to qualify for a refinance. Many borrowers end up with high mortgage payments that are two to three times their original payments. 3. No Documentation Loans No documentation loans or sometimes called “liar loans” were very popular prior to the subprime meltdown. These loans requires little to no documentation. They do not require verification of the borrower's income, assets and/or expenses. Unfortunately borrowers have a tendency to inflate their income so that they can buy a larger house. The problems start once the mortgage payment is due. Because the borrower does not have the income they are unable to make mortgage payments and often end up face bankruptcy and foreclosure. 4. Reverse Mortgages You have seen the commercials and even infomercials devoted to advocating reverse mortgages. A reverse mortgage is a loan available to borrowers age 62 and up. It uses the equity from the borrower’s home. The available equity is paid out in a steady stream of payments or in a lump sum like an annuity. Reverse mortgage have can be dangerous and have many drawbacks. There are many fees associated with reverse mortgages. These includes origination fees, mortgage insurance, title insurance, appraisal fees, attorney fees and many other miscellaneous fees that can quickly eat at the home’s equity. Another drawback; the borrower loses full ownership of their home and the bank now owns the home Avoiding the pitfalls of the mortgage maze will hopefully help you keep in good financial health as a home can be your best investment. .