princeton mortgage Archives - Weichert Princeton

If I ‘refi’ I will ‘start my payment history over, right…? WRONG!

November 18, 2011 by Josh Wilton

No “Starting Over”, Tim McLaughlin, VP Weichert Financial Services

In speaking with a couple of associates last night, the topic of refinancing came up. When analyzing a specific situation, the comment was made, “I would consider refinancing my home at today’s lower rates, but I am already X years into the loan, and I’m not sure I want to start all over again” (meaning they had paid down X years of their 30 year mortgage, and they didn’t want to start over again with a new 30 year mortgage).

To which I commented “then why not refinance into a 20 year or 25 year term loan so you don’t have to start over again”. In unison, two knowledgeable associates responded, “you can do that”?

Sometimes, we are so close to a situation, or an answer appears so commonplace, that we assume everyone knows the answer, but perhaps, we haven’t done as great of a job as we should have getting the news out. So with a slow news week, this gives us a great opportunity to get the message out for those who didn’t know, and reiterate the message for those that did:

on Fannie Mae and Freddie Mac loans (loans that are the vast majority of our refinance transactions), the following terms are available for Fixed Rate structures: 10 year, 15 year, 20 year, 25 year, and 30 years.
So there is no need to “start over”.

Everyone can take advantage of these historically rates and continue to maintain (or even reduce) the existing term of their loan without “starting over”. In fact, we have seen the majority of the refinance scenarios in 2011 be of the “trade-down” variety -> where an original 30 year term refinances into a new 15, 20 or 25 year term loan (at a lower price to reduce payment, a shorter term to reduce life of loan and future value interest paid, or both), or 15 year term loans refinance into 10 year term structures.

The prevailing thought is that interest rates will stay low for quite some time given the woes of the global financial markets and the economic climate, and that may be hard to debate. What is not hard to debate is with rates at this level, the downside (rates ticking back upwards) is significantly more likely than the upside (rates dropping down further), so why risk the chance of missing out on a great thing?

This is the weekend to capitalize…your trusted Weichert Financial Gold Services Manager can help you reduce your payment and/or your loan term this weekend in time for the coming holidays. We can help….ask us how!

Attn Princeton Home Buyers and Homeowners…Interest Rates Hit Record Lows…!

October 6, 2011 by Josh Wilton

Today, Freddie Mac announced that the average rate on a 30-year fixed mortgage fell below 4 percent this week for the first time ever, to 3.94 percent.

This all-time low rate represents an extraordinary opportunity for consumers, whether they are in the market to buy a home or not.

Homebuyers can purchase a home for less, sellers could see increased activity, and homeowners can refinance to lower their mortgage costs and free up money for other purposes.

Click here to Contact us or call us at 609-921-1900 to find out how to take advantage of these low rates to either buy or refinance!

Let’s Do the Twist…

September 23, 2011 by Josh Wilton

Tim McLaughlin, VP Weichert Financial Services

http://twitter.com/TimMc86

Q: On Wednesday, the Fed put what is termed as “Operation Twist” into action. I have no idea what that means, but I see mortgage rates have come down some more over the last two days. Can you explain what “Operation Twist” is?

A: “Operation Twist” is a strategy enacted by the Federal Reserve to sell short term Treasuries while simultaneously purchasing longer term Treasuries. The Fed mandated that it would “swap” $400B of short term debt into longer dated securities.

The last time the Fed purchased long term Treasuries was back in the 1960s during the Kennedy administration. The project, started in 1961, was called “Operation Twist.” It was intended to lower long term interest rates (to stimulate investment) while propping up short term interest rates (to attract capital from abroad and support the dollar).

Economists generally seem to think the experiment flopped, though Fed policy has changed so much between then and now, and the experiment was on such a small scale, that it’s hard to draw too many conclusions on how “Operation Twist” will fare today.

In addition to the $400B short/long swap, the Fed also announced that it would be reinvesting proceeds of the $1.25T Mortgage Backed Security purchase initiative from the last two years back into the MBS market as the securities pay off to further support the mortgage sector and continue to stimulate low interest rates.

What does this mean for Interest Rates and Stocks?

Well, we are two days in, and it has been bad news for Equities (combined with concerns of the European debt crisis) and very good news for Fixed Income Rates. The initial knee jerk reaction is warranted on the announcement. The question is will the momentum sustain for a prolonged period of time, or will the markets start to retrace as the global markets digest the news over the weekend?

For now, 3.99% and lower on a 30 year Fixed Mortgage sounds awfully appetizing. And 2.99% with points on a 15 year Mortgage sounds like the refinance opportunity everyone has been waiting for. Purchase or refinance, the opportunity to capitalize on historically low interest rates is right now. Weichert Financial can help…ask us how!

Call the Weichert Princeton office and ask for Jeff Smith. 609-921-1900.

Earthquakes and Hurricanes…

August 26, 2011 by Josh Wilton

Tim McLaughlin, VP Weichert Financial

http://twitter.com/TimMc86
If you are not still in the midst of a massive cleanup effort from the earthquake that rocked the Northeast last Tuesday (I already picked up the cup that knocked over on my desk), and if you have some free time while you are shut in this weekend from the negative effects of Hurricane Irene, now is a great time to pull out your laptop and run some numbers to see how truly affordable it is to finance that home of your dreams, or refinance your existing residence, if you haven’t already (that is, assuming you have power to run the computer). Let’s analyze some of the numbers:

If you have a $300K, 30 year mortgage at say 4.99% (existing loan to Refinance or rate you would have gotten on a Purchase mortgage in 1Q11), your P&I payment would be ~$1,609. If you were Purchasing that same house today, or looking to Refinance that purchase from early 2011 or before, the P&I payment would be ~ $1,431, a savings of $178 a month, over $2,100 a year, and over $10,000 in just 5 years! A terrific opportunity to act now on both a Purchase and a Refinance.

Or let’s say that you Purchased that same property in Q1 ($300K, 30 year mortgage at 4.99%), and now you wanted to refinance that mortgage into a 20 year mortgage at 3.99%. Your P&I payment would increase by $208 a month, BUT, you would cut 9 1/2 years off the life of your loan (assuming you originally closed in early 2011), and on the life of the loan payments, the interest saved in switching from the 30 year to a lower rate 20 year mortgage example above would be over $134,400 life of loan (assuming full term payments vs. a loan that originally closed in 1Q11).

Let’s take another example which can apply to both Purchases and Refinances: Let’s assume you Purchased a house with a 30 year, $300K mortgage in August of 2008 at 6.5% (yes, those were the rates in mid-2008). Your P&I payment would be ~ $1,896 a month. Now it is three years later, and assuming no additional principal was paid, the loan amount would now be ~$289,252. If you Refinanced that loan into a 20 year mortgage at 3.99%, you would cut 7 years of payments off your loan AND, additionally, you would reduce your P&I payment to ~$1,752 a month, a monthly savings of $144 a month in addition to reducing the payment by 7 years. This scenario can work on 15 year and 10 year mortgages as well in many cases.

Don’t let the shaking earth, the sideways rain, and the howling winds get you down. The bright spot this weekend is we can help you analyze how to finance that new home at the cheapest rates in years, or save money on your existing mortgage by Refinancing. We will take the time to do it right and garner your trust. Ask us how…we can help…before the sun comes back on Monday!

Did You Know…Plenty of Mortgage Money Available!

August 10, 2011 by Josh Wilton

We have found that consumers tend to associate the world financial downswings with a downswing in mortgage availability. Very often is has the opposite effect. Here are a few quick mortgage products to take note of:

With a good credit history (min 700 Credit Score) you can finance up to $417,000 with as little as 3.5% down.

With a reasonably favorable credit history (min 660 credit score) you can finance up to $417,000 with only a 5% down payment (3% borrower contribution, remainder can be gifted

You can finance up to $800,000 with as little as 15% Down Payment (all from gift) and pay no mortgage insurance

5/1 Jumbo Arms are available with interest rates under 4%

So the net, net…there is plenty of mortgage money available at generational low rates. If you are thinking of purchasing this is it. Prices have come down. Rates are at the bottom. Good luck with your home search!

Search Single Family Homes For Sale in Princeton Here

Search Condos and Townhouses For Sale in Princeton Here

John Burke