Archive for the 'Buying' Category
Mortgage Rates are Low
Mortgage rates are currently low. Very low.
It’s common for well qualified buyers to get rates below 5%, and we’ve heard of some rates as low as 4.25% on 30-year fixed mortgages with no points. We even saw a sign by the road advertising a 3.99% rate, though it was not clear what the other terms would be.
Here’s a chart from Mortgage-X.com showing rates going back to 1963, which is further than other charts we’ve seen.
Reproduced with the permission of Mortgage-X.com
Our Thoughts on Low Mortgage Rates
1. People shouldn’t buy houses because mortgage rates are low. Buying a home is a big commitment of time and money, so homeowners need to be in it for the right reasons. Securing a low mortgage rate might be a nice bonus, but it should not be used to justify a purchase – you need to want to own a home.
2. Those in the market for a new home can take advantage of the low rates in different ways. One option is to pay less each month for the same home they would have bought no matter what the rates. Another option is to get a more expensive home for the same monthly payment they would have had before rates fell so low. Finally, they could get a shorter loan (15-years or 20-years instead of 30-years) so that they can build equity faster and pay dramatically less interest overall.
3. Existing home owners may want to consider refinancing their current mortgage. There have been a couple articles recently (CNN, Wall Street Journal) about how refinancings are on the rise again, but that many buyers can’t take advantage because of strict lending requirements (their credit is too poor) and appraisal values (their home values have fallen and they don’t have enough equity).
4. Will rates go even lower? Nobody knows. At some point mortgage rates really can’t go any lower. The two primary inputs into the rates are the interest rate of the 10-year Treasury Bond and the spread above the Treasury that lenders/investors demand. The 10-year Treasury finished yesterday at 2.64%, which is very low from a historical perspective, but it’s possible it could go even lower.
As always, the place to start with everything mortgage-related is with a mortgage professional. They’ll be able to evaluate your specific situation to let you know which options are available to you. We would be happy to pass on the names of mortgage people we’ve used if anyone is interested.
210 Terry Road, Hartford’s West End
This grand Colonial in Hartford’s West End has great spaces and amazing potential. The home offers 6 bedrooms and 3.5 baths over 3,812 sqft.
The gracious foyer welcomes you with its ornate turned staircase, arched doorway and shiny hardwood floors. Adjacent to the foyer, the formal living room offers plenty of space for entertaining and features a wood burning fireplace, access to the screened-in 3-season porch and beautiful original moldings. A cozy sitting room with built-in glass door cabinets leads you back to the foyer. The dining room will easily accommodate your social gatherings and provides plenty of built-in storage. Off the dining room, the kitchen has generous cabinet and counter space, an eat-in area, access to a deck and a laundry room.
Upstairs you’ll find a wonderful retreat in the master bedroom suite which has a sitting room, dressing room and full bath. Two additional large bedrooms and a full bath complete the second floor.
The third floor has three additional bedrooms, a full bath and three generously sized storage rooms.
Mechanically, a new, high efficiency gas furnace was just installed to keep you comfortable throughout the colder months. The home also features 200amp electrical service.
In the private backyard there is a 2-car garage and mature perennials, shrubs and trees for those that enjoy gardening. Or, if you prefer, just sit back, relax and get some fresh air on the rear deck or screened-in porch.
210 Terry Road is offered at $425,000. If you’d like to see this home, please have your agent set up a showing, or call me at 860-655-2125 to schedule a visit. Both floor plan and photos are available.
How Many Homes To See
Last week in a post I made a passing comment about how we sometimes show people 50+ homes before they find the right one. My comment elicited this reader comment:
Josh: Oh my god. People look at 15-50 houses? Juan and I have only looked at 2 or 3 when we were shopping. I would think it would be challenging even finding 50 homes on the market meeting very limited criteria (school district, bedrooms, bathrooms, style, etc.). I think I am much more of a look-online-and-go-see-only-to-make-sure-it-actually-is-what-I-think-it-is. You guys must be very very patient… I love to look at homes, but 50? Wow.
This comment got us talking about how many homes we typically show people before they find the one for them. We both agreed that our buyers typically look at between 15-25 houses before they’re ready to make a decision. Looking at 15-25 houses can take 2 weeks or several months. It really depends on how specific the search is and what inventory is available.
How can someone find 50 houses to see? It’s actually pretty easy. For example, we help a lot of people looking in West Hartford. If you’re a first time buyer looking in West Hartford and want a minimum of 3 bedrooms, 1.5 baths and a 1-car garage between $245,000-$355,000 and you don’t need a specific school district, there are 61 houses available right now that meet those criteria. So even if you pick just some of these homes to see, over a period of a few weeks or months there will be new matches. Depending on how picky you are about condition, amenities, location- you can eventually approach that 50 number.
We’ve only had a few clients that have seen 50 or more houses with us. They are typically clients that are relocating to the area from out of state. These buyers visit for a few days and go on marathon showing tours. We’ll show these people 15 houses in one day. They sometimes look in multiple towns and have a wide search criteria, so there are plenty of houses to see. The purpose of visiting so many houses usually is to give them a sense of comfort about the market. By seeing many houses they are able to learn the market and it makes them more comfortable making an offer on the home they finally choose.
We have other buyers that see more than 50 houses before they make a decision, but we don’t always show them all of the homes. Some of them enjoy going to open houses on Sundays, so they’ll see many houses that way. If they are serious about looking we’ll tell them not to wait until the open house though. We wouldn’t want them to miss an opportunity if the house comes on the market earlier in the week and we think that it may meet their needs. As we like to say, if you snooze, you lose. We’ll touch base with them to schedule a showing shortly after the house comes on the market.
Finally there are people that just like to window shop. I’m not sure I would really call them buyers. It’s not clear if they will ever end up buying anything. They may see 50+ homes, but it’s usually over a span of many months and sometimes years.
Now, are we advocating that you go see 50+ homes? Heck no! Like Josh said, we are actually fairly patient but that’s a lot of houses to see. After we’ve seen 5-10 houses with a buyer we’re pretty much in tune with what they would like in a home. From there, we can screen the remaining properties that meet their search criteria on paper, we know what won’t work for them for one reason or another- condition, layout, location, etc. When new properties become available we can use the background info we have to determine if it’s worth a visit for our buyers. Sometimes it is, sometimes it isn’t. They typically appreciate the screening that we do for them because most buyers don’t want to go see 50 houses either.
When it comes to your home search, we’ll show you as many houses as it takes. We realize that every buyer is unique and has differing levels of comfort with the market based on their previous experiences house hunting and whether they’re from the area or not. The end goal isn’t to see the fewest or most homes, it’s to find the one that’s right for you. Most people know it when they see it.