November Mortgage Newsletter
Rates On The Rise
During the last 2 months, we have seen a significant increase in interest rates. Although rates have recently come down a little, it did go up to 4.875%. That’s an increase of .625% in 2 months. I can’t remember the last time that happened. In the immediate future, I don’t see rates going above 5%.
As rates climb, I am getting more inquiries regarding Adjustable Rate Mortgages. Everyone’s situation is different and be sure to consider all possibilities associated with an ARM. Usually when an ARM adjusts, there is a cap of 2% per adjustment and a lifetime cap of 5%. In case the rate goes up, you should have an exit strategy. Hopefully the rates will go down before the adjustment, so you can refinance. Otherwise you can pay down the mortgage with assets. There is also the option of temporarily buying down the rate. For those that are unfamiliar with this option, please call me and we can discuss this as well as other options that might be a consideration.
For self-employed borrowers, there are new mortgage programs that have alternatives to traditional documentation requirements. If your business has a history of deposits in the bank account that can be documented for a period of 1 year or so, this may be sufficient as income verification. Although this sounds complicated, it really isn’t. If you are self-employed, be sure to check out your options.
As I mentioned earlier, rates have been on the rise. We have seen a sharp increase in Mortgage Rates in the last 2 months. Interestingly our 7 Year ARM and 10 Year ARM rates have not increased. Here are our rates. Here are our current rates:
Conventional 30 Year Fixed 4.625% APR
Conventional 15 Year Fixed 4.0% APR
FHA 30 Year Fixed 4.25%
10 Year ARM 4.25%
7 Year ARM 4.125%
The New Jersey Association of Realtors released its report for Real Estate activity in the state of New Jersey for the Month of August. Here are some year to date (YTD) numbers:
New Jersey YTD 2017 YTD 2018 % Change
New Listings 146,325 147,358 +0.7%
Pending Sales 92,095 92,438 +0.4%
Closed Sales 88,001 87,818 -0.2%
Median Sales Price $281,000 $293,000 +4.3%
Average Sales Price $361,310 $370,676 +2.6%
Days on Market 71 64 -9.9%
Affordability Index 156 140 -10.3%
The affordability number is the only one that really sticks out. Other than that, it’s still a very well-balanced market. A win-win for buyer and seller.
NMLS ID 66034
2230 Route 206 Belle Mead, NJ 08502
Phone: (908) 359-2410 Rate Hot Line: (908) 420-3655 Fax: (908) 359-3929
Licensed Lender: Licensed by NJ Department of Banking and Insurance
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