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What you Need to Know About MassHousing’s Zero Down-Payment Program

Joseph Coupal - Monday, July 02, 2018

Prime Lending at The McMullen Group, Boston, MATo give first-time homebuyers a leg up in the state’s expensive housing market, MassHousing has long offered low-interest mortgages with minimal down payments, based on certain income eligibility requirements — most borrowers qualify for 97 percent financing through the quasi-public agency. MassHousing went a step further by launching a new first time home buyers programs that makes it possible for borrowers to take out a second loan that covers their down payment.

Here’s how the new program works:

■ MassHousing will provide “down-payment assistance” covering as much as 3 percent of the cost of a house or condo priced up to $400,000. The maximum amount of down-payment help you can receive is $12,000, even if you buy a home that costs more than $400,000.

■ The down payment money is not a grant, however — it’s a loan you will be required to pay back through a 15-year second mortgage with a fixed interest rate of 1 percent and no additional fees.

■ To qualify for the down-payment assistance program, you must have a credit score of at least 660, a debt-to-income ratio of 41 percent, and an annual household income at or below the area’s median income. That’s up to $103,400 in the eastern part of the state, $85,700 in Worcester County, and $67,200 in Berkshire County. Also, you must attend a first-time homebuyers class.

■ Once you make an offer on a property, you can then formally apply for the MassHousing mortgage. Most MassHousing first time home mortgage loan borrowers qualify for a mortgage that covers up to 97 percent of the purchase price. As part of the application process, you will also do paperwork for a second mortgage — the one that covers the down payment up to 3 percent, or $12,000. MassHousing is itself not a lender, but it works with a network of 150 banks, credit unions, and mortgage companies.

■ After your offer is accepted, you’re locked in to the two separate MassHousing mortgage loans, which are delivered in tandem — one for the bulk of the borrowing, and the other for the down payment.

For more information, contact Prime Lending at the McMullen Group.


MassHousing Mortgage Program Requires No Down Payment

Joseph Coupal - Monday, June 25, 2018
The McMullen Group, Prime Lending, Boston, Hanover, MA

For many, the prospects of being able to buy a home in the Boston area are slim.

The past few years have been trying times for would-be home buyers hoping to gain entry to Greater Boston’s red-hot housing market.

From a lack of homes for sale to overcrowded open houses to bidding wars, the chance for them to buy a house has become increasingly more remote. For many, even saving for a small down payment — never mind the recommended 20 percent — can be next to impossible.

It’s an issue that MassHousing is hoping to tackle through a new program that would cover the down payment on a property — up to 3 percent — for some first-time home buyers. The quasi-public state agency said Sunday that under the program, income-eligible people using a MassHousing mortgage to purchase their first home will be able to finance up to 100 percent of the cost. They’ll eventually have to pay back the down payment — through a low-cost secondary mortgage — but they won’t be required to have cash up front.

“You’ve got all kinds of competing interests that you didn’t have 15 years ago like Airbnb [and] foreign investors that are buying up units,” said Chrystal Kornegay, the agency’s new executive director. “And because of limited supply, inventory is really low and that’s driving prices. This is one of the ways we’re hoping to give people the opportunity to have a little bit of a leg up.”

The down payment would be covered by a 15-year second mortgage with a fixed interest rate of 1 percent and no additional fees. The loan amount would be capped at 3 percent of the purchase price — which can’t exceed $400,000 — for a single-family home or condominium unit.

In addition to meeting minimum credit standards to qualify, first-time home buyers must have annual household incomes at or below the area’s median income. In the eastern part of the state, that’s an annual household income of up to $103,400. It’s $85,700 in Worcester County, and $67,200 in Berkshire County.

The MassHousing down payment program also includes strict requirements for would-be buyers — including a minimum credit score, debt-to-income qualifications, and mandatory attendance at a homeownership education class.

With interest rates expected to rise this year, the program may be coming at an opportune time for people who have been unable to break into the housing market.

Younger folks can’t afford to buy in the city, and we need to address this broadly. We are not just talking about Boston, where we have these escalating home prices, but in other parts of the state people don’t have the resources to put down 20 percent, 10 percent, or even 3 percent, so they’re shut out of the market.

A 2017 study from the National Association of Realtors found that the median down payment for first-time home buyers has been 6 percent for three consecutive years. About half of MassHousing borrowers fall between the ages of 26 and 35, a demographic where heavy student loan debt is common, further limiting their ability to save for a home.

They’ve got so much student loan debt that they can’t really play in this marketplace well. They don’t have the savings because they’ve been spending this money in other ways.

East Boston Savings Bank’s chief executive, Richard Gavegnano, said that many younger buyers turn to their parents for assistance in making a down payment on a home. He said the idea of a zero-down-payment program is attractive, but borrowers should make sure they understand the terms before signing anything.

"A lot of people got into trouble because they didn’t know the repercussions of what they were getting into,” he said of the prerecession days, when predatory lending tactics were common.

The MassHousing program is intended to get people into a home without overwhelming their finances.

"We really are in the business of sustainable homeownership,” said Kornegay, the state’s former undersecretary for housing and urban development. “This is meaningful to us and we’re really excited about it and we hope to have hundreds of people be helped by this program get to that first house.”

Who’s eligible for the MassHousing program? I

n addition to meeting minimum credit standards, first-time home buyers must have annual household incomes at or below the area median income:

$103,400 in the eastern part of Mass.
$85,700 in Worcester County
$67,200 in Berkshire County

For more information, contact Prime Lending at the McMullen Group.

Source: bostonglobe.com

Even with mortgage rates up, buying instead of renting makes sense for many

Joseph Coupal - Monday, June 18, 2018

McMullen Group, Hanover, Boston, MATax changes don’t seem to have changed the calculus on home ownership very much

The spring home-buying season is in full swing, but the landscape has changed a lot from last year. Congress has curtailed tax incentives to purchase a home, mortgage rates are up and homes are more expensive. Yet, for many folks, buying a home is still better than renting.

The new tax law doubles the standard deduction to $24,000 for couples and caps deductions for state and local taxes at $10,000. Those greatly limit the tax incentive to purchase a home instead of renting. Zillow estimates homeowners who will take deductions and list mortgage interest and property taxes will fall from 44% to 14%.

Economists estimate this will reduce purchase offers enough to lower median housing prices by about 4% in more expensive cities, but that has yet to become apparent in the data.

Tax law changes were in focus by December and we have resale pricing data available through February. In the top 20 metro areas year-over-year price increases were about the same or greater than a year ago.

Most home buyers have more disposable income to pay mortgages. In their take-home pay, a higher standard deduction compensates them for not taking interest and property tax deductions, and lower rates overall actually boost most taxpayers’ buying power.

In hot markets, foreign buyers, who for a variety of reasons pay cash and are simply parking wealth in the United States, have played a big role in elevating prices. U.S. personal income tax laws have few consequences for that behavior.

The FreddieMac average for a 30-year fixed-rate mortgage is currently about 4.6% — up from about 4% a year ago. For a $300,000 mortgage, that adds about $150 to monthly payments but landlords are paying more to finance apartment buildings too and that gets factored into rents.

How long a purchaser plans to stay in a home remains a key factor, because closing costs, realtors’ fees, and the like significantly raise the initial cost of owning a home — even if you can roll these costs into the mortgage balance to stretch those out.

Employing a calculator on the Trulia website, we examined the buying vs. renting tradeoff with a 30-year mortgage, a 4.6% interest rate and 20% down payment. The formula also factors in higher utility costs associated with home ownership, and expected inflation and rent increases.

If the home is occupied for at least 4 or 5 years, owning beats renting even without a mortgage interest deduction.

Families could instead invest their down payments in stocks, which at first glance appear to be the better bet. From 2000 to 2017, equities as measured by the S&P 500 SPX, -0.80% were up an average of 5.3% annually, whereas homes appreciated 3.9%.

In recent years, appreciation as measured by the S&P Core-Logic Case-Shiller Indexes for top 20 markets and overall nationally indicate an accelerating pace of home appreciation — rising steadily from 4.4% in 2014 to about 6.5% in 2017.

Tougher zoning in and around cities where major employers are located, rising material costs and a slow pace of productivity growth in home building combine to make additions to the single-family housing stock slow. With millennials finally pushing into the house market, continued appreciation beating the historical trend and competitive with stocks can be expected.

Also, homeowners will have their full equity working for them, as opposed to just their down payments.

Homeowners enjoy more flexibility — they can modify and add to their homes to fit the circumstances of their families and personal preferences — and stability — they don’t have to fret about a landlord selling to a new owner who might want to repurpose the building.

Owning a home in a good neighborhood — not necessarily a rich area but one that is stable and has good employers within commuting distance — has proven one of the most reliable ways for ordinary folks to save and invest.

For more information on home mortgages, contact Prime Lending at The McMullen Group.


Should I Opt for a Conventional Home Loan or an FHA Loan?

Joseph Coupal - Monday, June 11, 2018

McMullen Group, Hanover, Boston, MAThose who opt for a conventional home mortgage loan versus those who choose FHA home loans have different buyer profiles. The buyer profile for someone seeking a conventional loan will have a different financial background from someone seeking an FHA loan. In order to determine which type of mortgage loan is right for you, keep reading to learn more about these two very distinct buyer profiles.

Conventional Loan Profile

Conventional loans are not backed by the government. As such, lenders require certain fiscal standards to ensure that you are financially stable enough to make monthly mortgage payments.

Debt-to-income ratio: The typical debt-to-income ratio for someone getting a conventional home loan is at most 43 percent. This helps lenders recognize whether you have a stable enough income to pay for monthly mortgage payments. Debts such as credit card bills, student loans and child support all go into your debt-to-income ratio.

Credit score: The higher your credit score is, the better. If you have a high credit score, then you have a shot at getting a low interest rate. However, the lowest credit score that a lender is looking for is around 620.

Down payment: This can vary a lot, but the typical down payment is 20 percent of the purchase price. There’s a chance you could put down less money if banks are offering special programs to buy a home in certain areas.

Private mortgage insurance (PMI): It’s easier to get away with not paying mortgage insurance when you opt for a conventional loan. However, if you put down less than 20 percent, the lender may require PMI.

Processing time: The time it takes to get approved for a conventional loan can be much quicker than that for an FHA loan. This is because the borrower works directly with the lender, not a government agency that acts as a middleman.

FHA Loan Profile

These loans are backed by the FHA, which offers an extra layer of security, ensuring lenders that monthly payments will be met. FHA loans often appeal to first-time homebuyers.

Debt-to-income ratio: Forty-three percent is standard. FHA loans tend to be for those for whom a down payment will require much of their income.

Credit score: 580 is typically the lowest possible credit score that a borrower can have to procure an FHA loan, far lower than what a conventional loan requires.

Down payment: Unlike conventional loans, those seeking an FHA loan can put as little as 3.5 percent down.

Mortgage insurance premium (MIP): MIPs are always tacked on to FHA loans. The borrower pays an initial 1.7 percent of the loan amount once they obtain the loan; however, this can be financed as part of the loan amount. Then, a monthly premium payment is required. The amount is determined by a certain percentage of the annual loan amount. That percentage varies, depending on the length of the loan and the amount of the down payment.

Processing time: The processing time for an FHA loan can take longer than that of conventional loans. This is because borrowers are going through a government agency to acquire a loan and not working directly with the lender. Underwriting tends to take the longest time.

Of course, these are just the basics. Keep in mind that laws and regulations change frequently. Contact us today for more information about conventional versus FHA loans. We’ll make sure that you’re selecting the right loan for you.

For more information on both types of home mortgages, Prime Lending at the McMullen Group is always available to answer your questions.


Home Loans for First Responders

Joseph Coupal - Monday, June 04, 2018

McMullen Group, Hanover, Boston, MAEvery day, first responders do the unthinkable. They put themselves in harm’s way as they respond to emergencies and natural disasters, making rescues, providing medical care, securing crime scenes, extinguishing fires and much more.

At PrimeLending and the McMullen Group, we’re grateful for the first responders who face obstacles to protect our communities and help keep us safe. And we believe that buying a house shouldn’t feel like another challenge that they have to deal with. In fact, we think that every hometown hero deserves a house to go home to.

Affordable Options

We understand that being a first responder often comes with financial challenges, and we want to make sure that doesn’t stand in the way of being able to buying a house.

We offer a variety of custom mortgage options to help make homeownership affordable. Our loans fit different credit scores and challenging financial situations, and we offer options that require little to no money down.

Our Process is Simple

We make the entire mortgage process simple and hassle-free. From application through closing, borrowers can count on us to guide them through each step. We’ll always keep them in the loop and send them updates on their progress directly to their phones.

The best part? Borrowers can start the process for financing a home in the way that’s most convenient for them – online, by phone or in person.

We appreciate first responders’ hard work and service, and we’re looking forward to being able to serve them.

To learn more about your options, get in touch with one of PrimeLending’s home loan experts today at the McMullen Group.


Documents Needed for a Mortgage Preapproval

Joseph Coupal - Tuesday, May 29, 2018

McMullen Group, Hanover, MAGetting preapproved for a mortgage before you go home shopping isn’t required, but it is a good idea, especially in a seller’s market, where competition among buyers is intense. Unlike a prequalification, a preapproval letter lends weight to your bid on a home, proving to sellers that you have the financial clout to stand behind your offer.

To get preapproved, you’ll need to verify your income, employment, assets and debts.

It’s likely you already have many of the records you’ll need, or easy access to them. Gathering the documents shouldn’t take more than a week, depending on the lender’s requests and whether you need records from outside sources, like an attorney or county government.

Even for a preapproval, your lender may want more documents, especially if you’re self-employed or your income comes from several sources. Also be prepared to share information such as your Social Security number, which is used to check your credit reports and scores; your employer’s name and address; and your hire date.

Here’s a list of documents you’ll need.

Income and employment

The documents required to verify income depend on how you get paid. This step is easiest for workers with a paycheck from one source, which provides an annual W-2 form, and who have little or no overtime or shift differentials.

Tax returns: Copies of your two most-recent federal and state returns may be required.


W-2 wage earners: Copies of W-2 forms and your two most recent payroll stubs. If income includes overtime, bonuses or differential pay, you may need your most recent end-of-year payroll stub.

Self-employed, freelancers and independent contractors: Self-employed borrowers, including sole proprietors, partnerships and S-corporations, need a year-to-date profit and loss statement and two years of records, including the Form 1099s you used to report income and file taxes.

Real estate income. Document the rental income, address, lease and current market value of a rental property if you will use this income to qualify for a mortgage.


Bank statements: Copy 60 days’ worth of statements for every account whose assets you’re using to qualify for the mortgage. Include even blank pages of the statements.

Retirement and brokerage accounts: Two months of statements from IRAs, investment accounts (stocks and bonds), and CDs. The last quarterly statement from 401(k)s showing the vested balance. As with bank statements, include every page, even blank pages.


Monthly debt payments: Lenders examine your payment obligations to calculate your debt-to-income ratio. List all monthly debt payments, including student loans, auto loans, mortgage and credit cards. Include each creditor’s name and address and your account number, loan balance and minimum payment amount. If you have no credit history, utility bills may be used to help you qualify for a mortgage based on nontraditional sources of credit.

Real estate debt: If your current property is mortgaged, have your most recent statement — showing the loan number, monthly payment, loan balance and the lender’s name and address — and the declaration page of the insurance policy.

Other records

Rent: Renters need to show payments for the last 12 months and provide contact information for landlords for the last two years.

Divorce: Have your court divorce decree ready, if applicable, and any court orders for child support and alimony payments.

Bankruptcy and foreclosure: Ask your lender what documents they’ll need and how long you should wait after bankruptcy or foreclosure to re-enter the housing market.

Down payment gift letters: Lenders will want to talk about your down payment. You’ll need to show the sources of the money you plan to use. If your funds include gifts, you’ll need to get letters from your donors showing they don’t expect to be paid back. Gift letters aren’t required for preapproval but we do let borrowers know to be prepared.

Whew. You’re done for now. Keep those files handy, though. You’ll need these documents again when applying for the loan.

To get preapproved for a home mortgage, contact Prime Lending at the McMullen Group.

Thinking Of Buying A Home? Here's How To Prepare For Home Ownership

Joseph Coupal - Monday, May 21, 2018

Prime Lending, McMullen Group, Hanover, Boston, MAFirst-time home-buyers nationwide are deciding whether to rent or own. The perceived challenges to becoming a first-time homebuyer seem scary. Many avoid taking the step from renting to owning out of fear of the unknown. But buying a home is affordable in the right market, and with the right loan. First-timers can even explore rent-to-own homes (with the help of a real estate lawyer) or purchasing a small, "starter home" and later selling to upsize.

Renters' dilemmas, on the other hand, all boil down to one question: "Can I save money and achieve a better quality of life by owning a home instead of renting?"

To find the answer, we must first understand every relevant factor in the home-buying process. Gathering the facts is the first and foremost important step toward making an informed decision about home ownership, financial responsibility and real security.

The largest considerations in the rent or buy decision-making process are:

How To Calculate How Much Home You Can Afford

To understand if you can afford to buy, start by figuring out what you can pay per month. Financial professionals will tell you a home can safely cost between two and four times your annual salary.

This doesn’t consider your existing net worth, but over-investing in first-time home ownership isn’t recommended either. You can always buy more house later, but it’s impossible to undo a mortgage loan.

The idea here is to avoid overextending yourself and living “house poor.” Remember these seven essential factors when deciding how much home you can afford:

  1. Take-home pay after taxes
  2. All other debt and monthly payments (credit cards, auto and student loans, etc.)
  3. Foreseeable expenses you’ll incur in coming years (new computer, car repairs, etc.)
  4. Cushion funds for potential emergency (job loss, injury, death in family, etc.)
  5. Future uses for home and space requirements (retirement, children, home office, etc.)
  6. Down payment funds available (and whether you should buy or wait)
  7. Expected mortgage cost via a mortgage calculator

What Is My Down Payment?

A down payment is the amount of money you spend upfront when purchasing a home. Taxes and fees aside, the total purchase price of a home is the sum of the down payment and the mortgage. The amount of your down payment influences your mortgage interest rate and will determine how much interest you pay (or save) over the span of your home loan.

A rule of thumb is to buy only if you can afford a 20% down payment. Putting down 20% keeps your interest rate low and saves money on interest paid in the long run. It will also keep monthly payments smaller.

Be aware, however, down payments are expected to vary. Buyer finances differ and some feel comfortable putting more down than others. Figure out what number is comfortable for your budget. Then you’ll have a better idea of whether or not you're close to buying a home.

Six Factors To Remember When Calculating Your Mortgage

Once you’ve figured out what you can spend per month, now ask what amount you can get for that monthly payment. A mortgage is a home loan and the gradual repayment of the principal and interest monthly is called amortization. Monthly mortgage payments are influenced by six primary factors:

  1. Credit score
  2. Credit history
  3. Annual income
  4. Total debt
  5. Down payment
  6. Interest rates

Depending upon your timeline, these variables can be optimized to give you the best mortgage rate.

Most buyers pay off loans and save more for a down payment because lenders give the best rates to those who have low debt and can bring at least 10-20% to the table for a down payment. Many potential buyers wait until their credit improves because lenders will hand out the best rates to those with high credit scores.

Because interest rates are constantly fluctuating, it’s smart to lock in a low interest rate and save money. A lower interest rate means you save on your mortgage by decreasing the cost of the loan and reducing the total cost of interest over time.

What About Qualifying For A Loan?

To qualify for this mortgage amount, lenders require you to have a 28/36 debt-to-income ratio. This means that 28% or less of your total monthly income goes toward housing costs, and 36% or less of your monthly income goes toward monthly debt payments of any kind — your mortgage included.

For this reason, it’s smart to pay down debts before applying for a mortgage. Lenders use this ratio to see what you can afford, but this number doesn’t account for expenses and other costs.

Watch for those unavoidable fees in the home buying process, and look for opportunities to secure a commission refund.

Begin Your Journey Now

Start by calculating your home affordability budget based on income, savings and expenses. Remember that down payments can be between 3.5-20% of the home price, but you’ll need insurance for the lower sums. Make sure your debt/income ratio is solid before applying for a loan. Also, remember that you’ll want a good credit rating and interest rate to lock in the best mortgage rate.)

Forbes Real Estate Council is an invitation-only community for executives in the real estate industry. Do I qualify?

Start your home search today and use the information presented above to be an educated homebuyer.

For more information, contact Prime Lending at the McMullen Group.


8 Tips To Help You Save For Your New Home

Joseph Coupal - Monday, May 14, 2018

Simple Ways To Save Cash Without Feeling The Pinch

Prime Lending at The McMullen Group, Boston, MABuying a home is a big and exciting purchase. For many people, it’s the biggest purchase they’ll make in their lifetime. Of course most people finance a home over a long period of time using a mortgage. But even if you get a home loan, you’ll have to come to the table with the money to cover the down payment and associated closing costs. Just how much money you’ll need at closing depends on the type of loan you are using to finance the purchase. For example, here’s a quick breakdown of the requirements and advantages of four common types of home loans. Remember, there is a wide range of options in each of these categories that a PrimeLending home loan expert can walk you through.

Conventional Home Loan — A conventional home loan is a mortgage that is not insured, or guaranteed, by the federal government. They’re popular with borrowers who have good credit, a stable job and income, who can afford a down payment and people who are financially stable overall. Conventional loans generally offer much more flexible terms and fewer restrictions than government-backed loans, and do not require mortgage insurance if you put at least 20 percent down on a purchase. Conventional loan rates are also often quite low, since the borrower is known to be financially stable with good credit.

FHA Home Loan — If you’re working with limited income or money for a down payment, a government-insured Federal Housing Administration (FHA) home loan could be the right solution for you. FHA home loans offer a low 3.5 percent down payment, flexible income and credit requirements and low closing costs. These are popular loans for first-time homebuyers.

USDA Home Loan — The USDA loan, or USDA Rural Development Guaranteed Housing Loan Program, is another type of government-backed loan. Originally designed to provide a mortgage alternative to rural property buyers who had limited financing options, the USDA home loan is becoming a viable mortgage option for people who want to live away from cities and enjoy country living. But even if you live in a suburb, you may find you can qualify for some USDA programs. The USDA loan requires no down payment, has low interest rates that aren’t tied to credit score or down payment, and offers flexible credit guidelines.

VA Home Loan — A VA home loan is a great benefit to military personnel during and after their service. VA home loans are partly guaranteed (typically a quarter of loan value) by the U.S. Department of Veterans Affairs and offer advantages such as no down payment, higher loan value, no private mortgage insurance, a limit on closing costs and other benefits.

Although you’ll want to start saving long before you ever apply for a loan, understanding the loan types can help you determine approximately how much you’ll need to save up. How can you save for your new home without living on rice and beans for the next several months (or even a few years)? Here are some strategies and tips to help you save for the purchase of a new home without feeling the pinch.

1. Start with a Monthly Budget — Let’s start with the obvious…the key to building savings is spending less than you earn. Your first step to saving for a new home (or any purchase) is to create a family budget. Creating a budget where you outline your monthly income and expenses will help you see exactly where your dollars are going, and make a plan to put any extra into savings. Be realistic, and stick to the plan as much as possible.

2. Build a Ladder — CD laddering is a savings strategy with both short and long term benefits. If you’re planning to buy a home in the next few years, investing your savings in the stock market can be risky, but a safer alternative is purchasing CDs, or certificates of deposit, which yield a higher return in exchange for that money being locked up for a set amount of time. Building a CD ladder means you’ll always have access to at least a portion of your money. Certificates of deposit are also a guaranteed investment, so you can’t lose when it’s time to take it out. Once you do pull it out, you can use that money toward a down payment, or reinvest it in a new CD for continued savings.

3. Save Less for Retirement — If your employer offers a 401(k) match, save enough to qualify for that employer-sponsored contribution, but cap your retirement contributions there and allocate any extra cash toward your down payment. First-time home buyers may also be able to use retirement savings to fund the down payment. Typically, $10,000 can be drawn without penalties. But before you scale back on your retirement savings, put these other strategies to work.

4. Go Traditional — If you just aren’t sure about investing your hard-earned money, a traditional savings account can still help you earn income on your savings. Shop around for a savings account that offers at least one percent in interest, and start stashing every extra penny into your savings. Better yet, create a dedicated bank account just for your new home fund, and quarantine it from any spending. Stick to your regular checking account to pay the bills and keep that savings account off limits. The biggest benefit to a traditional savings account is that you have zero risk of losing your money, and it’s always accessible, so the moment you find your dream home, you’ll be able to access the cash for your down payment.

5. Set Up Automatic Savings — Once you’ve established a dedicated savings account, arrange with the payroll department at your job to send a fixed amount to that savings account every payday via direct deposit and the remainder sent to your checking account as usual. You’ll never even notice the money going to savings because it was never in your checking account to begin with.

6. Save Your Windfalls — Any extra cash goes straight to savings. Whether that’s a tax refund or a year-end bonus, putting those one-time infusions of cash can help you reach your savings goal a little bit faster. Use the same strategy with pay increases – divert any additional pay to your savings account. If you’ve created a good budget and are sticking to the plan, you won’t need that extra cash anyway.

7. Cut Big Expenses — While you may really need that vacation, what if you put that money into your housing fund instead? Cutting big, non-necessity expenses allows you to add to your bank account and build savings quickly, rather than pinching pennies. If you can swing it, consider downsizing to drop a portion off your living expenses. If you’re living in a two or three-bedroom apartment and could do without one of those bedrooms for a year or two (especially if you don’t have kids), make the move to a smaller apartment and reallocate the unused rent in to your savings account. A smaller place may also save you money on utilities. Win-win!

8. Work More — If you’re eligible for overtime or additional work opportunities, seize those occurrences. Earning extra income can give a big boost to your savings. Taking on a second job on the side or a few new projects can help. If you’ve got a family, talk to your spouse and consider if you can live with the sacrifice for a few months to help bulk up your housing fund.

Saving for a new home requires dedication and grit. It means saying “no” to that splurge and spending less on frivolous expenses such as eating out and entertainment. Saving can be frustrating at times, but don’t be too hard on yourself. If you cut out going to the movies until you’re in your new home, consider a Netflix subscription instead. Rather than cutting out all dining out, budget to eat dinner out of the house once a month. The goal isn’t to be dissatisfied, but rather more intentional with how you spend your money.

If you’re in the market for a new home, start your journey to homeownership with PrimeLending and the McMullen Group. Contact one of our home loan professionals today to get details on your loan options and start the application process.


Factors to Consider When Pricing Your Home to Sell

Joseph Coupal - Tuesday, May 08, 2018

Do your research, choose your listing price, and watch the buyers line up.

McMullen Group, Hanover, Boston, MAUnlike the cost of a gallon of milk or a flat-screen television, a home’s price can be hard to pin down. It’s complicated because each home is unique, and has its own story to tell.

When it comes to setting the price of a house, the only thing to do is to look at the recent sales and active listings of similar homes in your area. Combine this research with the inside market knowledge of a local real estate agent, and you can confidently choose your list price.

Here are some guidelines to keep in mind when determining how much to ask for your house.

Make sure to look at recent comps

Markets change fast, so it’s best to find comparable sales within the past three months. If you go back too far, you will see homes where a deal might have been made many months before it closed.

Real estate markets can turn on a dime, so a deal put together more than six months ago isn’t applicable. Pending sales are your best indicator of the current market’s conditions.

Understand that fixtures and finishes matter

Let’s face it, buyers prefer a tastefully renovated home with neutral finishes and fixtures over an unrenovated home, one stuck in the ’80s, or one with outlandish decorations.

When looking at comparable houses online, you must be objective. If your home isn’t updated, it’s not going to sell for as much.

Here’s the good news: The amount of money it would cost to upgrade your house is probably a lot less than the difference in value. Be open to making some small changes before listing.

No two homes are alike

The 2,000-square-foot, 3-bedroom, 2-bath home with two-car parking on a quarter acre down the street just closed for $500,000. That means your home — also a 2,000-square-foot, 3-bedroom, 2-bath house with two-car parking on a quarter acre — is also worth $500,000, right?

Not so fast. What you don’t realize is that the other home’s three bedrooms are not all on the top floor, and that the home lacks an en-suite master bathroom, its kitchen is closed off from the living areas, and the layout is choppy.

Buyers pay more for better floor plans and flow. Your home, with an open concept kitchen/living area and three bedrooms all near each other, is much more valuable.

Small nuances in the market will affect price

Understand that each comparable home requires some serious research before calling it a “comp.” A house down the block may seem like it’s the same location as yours, but it could be in a different school or tax district, which will affect its value.

A smaller home may have sold for 20 percent more than yours, but maybe it was on a double lot that could be split, which makes it more valuable to a builder or developer.

If you see a nearby home with a price that seems off the mark, there must be a reason. Dig deeper to uncover what it is, and realize that the home may not, in fact, be a comparable one.

Go see homes for sale

Rarely does anyone decide to sell overnight. Once you realize a sale is in your future, get out and see what’s in your market. Check out open houses nearby to see the interiors for yourself.

Homes you see in January will likely be pending or closed by the time you list in April. Or they may still be on the market, which is an indication of poor pricing.

Check out the different floor plans, finishes and fixtures of nearby homes for sale, and consider whether each is more or less valuable than yours.

The best seller is the informed one. So don’t rely solely on your agent’s word about a particular house, or the market in general.

Use your agent as a resource

The earlier you bring a local real estate agent into the fold, the better. Top agents tour properties regularly, and know their market inside and out. They can likely explain the seemingly inexplicable, and offer tips to help make your home more valuable.

A good agent has the inside knowledge on pending homes sales and their finger on the pulse of the market 24/7. But remember to research independently, and never rely solely on the advice of your agent.

For information on home mortgages, contact Prime Lending at the McMullen Group.


Spring 2018 Housing Market Outlook

Joseph Coupal - Monday, April 30, 2018

5 Things Prospective Homeowners Need To Know About Buying A Home This Spring

McMullen Group, Hanover, Boston, MASpring is traditionally the busiest season for real estate sales, but this year, buying season began in January. Inventory is selling fast — at record rates, according to the February 2018 RE/MAX National Housing Report — which also means a shortage in housing, especially for first-time buyers. The economy is stable and employment rates are low, which means spring 2018 will be an active one in the housing market.

Javier Vivas, director of economic research at realtor.com, spoke to Forbes about the 2018 real estate outlook and said we’re facing the lowest level in housing industry in at least 20 years. It’s a seller’s market for homes in the $100,000 to $350,000 range — what realtor.com defines as entry-level to mid-tier homes. And the numbers comparing January 2018 to January 2017 tell the same story. The median listing price is up eight percent, from last year, while inventory is down eight percent.

If you’re looking for a new home this spring, here’s what you need to know about the state of the housing market and how you can increase your opportunities to find a home during this hot market.

Historically low inventory. At least for home is the low-to-mid range. If you’re looking for a luxury home, there are more available, which means the time is right to find a good deal on a trade-up home. According to the fall 2017 RE/MAX National Housing Report, housing inventory was down 13.4 percent in October 2017 compared to the same time the previous year. The same report also found only three of the 53 metropolitan areas in the country reported a buyer’s market, or had a balance. What does this mean for you? Be prepared to look longer and harder to find a home, particularly if you’re a first-time buyer looking for a starter home.

Fast sales. According to Forbes, the average home is on the market 89 days, down seven percent from last year. The RE/MAX National Housing Report shows homes sold in an average of just 60 days in January, the fewest days on the market in at least nine years. If you find a home you like that fits within your price range, act quickly. Don’t wait around hoping for the price to come down, or you’ll likely miss out. Want to be sure your offer is accepted over others? Be willing to offer above asking price and be flexible with seller’s requests.

Prices are up. Be prepared to spend a little more this year. Nearly every market in the country has recovered from the 2008 housing market crash, the economy has stabilized and unemployment rates are low. As a result, we’re seeing higher home prices. The median sales price of homes in January hit $224,000, another record, and 51 of 53 metropolitan markets posted gains for the 22nd consecutive month of year-over-year price increases, according to the RE/MAX report.

Interest rates are on the rise. Mortgage rates tend to follow the 10-year Treasury and has been on the rise in the last several weeks. According to bankrate.com, the average interest rate was 4.57 percent at the beginning of March, up from 4.15 percent in December. Interest on a 30-year-fixed-rate mortgage has been on the rise over the past several months, and is expected to continue rising. To secure the best rate on your mortgage, contact a home loan expert from PrimeLending to find out all your options and lock in a great rate.

Prequalification1 is essential. Due to low inventory, many sellers are receiving multiple offers on their homes. Do not consider making an offer on a home if you haven’t been prequalified, or you’re more likely to be passed over for another buyer. Get prequalified for a home mortgage loan to help you know how much you can afford, but be sure you don’t stretch yourself financially. Just because you are approved for a $350,000 home, take a serious look at your income and determine your max dollar from there. Plan to dedicate at least one-third of your monthly income to mortgage payments.

If you’re looking to buy this spring, this outlook may seem grim, but don’t give up. Knowing what you’re up against can help reduce frustration in your search for a new home. Have a plan. Be prepared. Set your budget. Prep your finances. Get prequalified. And go!

To get prequalified for a home mortgage, contact PrimeLending at the McMullen Group today to connect with a home loan expert in your area.