Massachusetts Mortgage Rates and Options

In stark contrast to many other parts of the country, the Massachusetts housing market is hot right now, with many houses selling for more than the asking price just days after being listed. Due largely to expense and land constraints, Massachusetts did not flood the market with new construction during the real estate boom. Home sales have been climbing since July, and the number of single family homes on the market fell to just under 22,000 in December, month-to-month inventory has declined for 21 straight months. The housing supply remains low because sellers who do not have a pressing need to sell are likely to hold off on sales until housing prices increase

In addition to the scarcity of housing, there is an increase in demand for housing. There are three major factors at play that are fueling the increased demand. The first is that the first time home buyer tax credit and repeat buyer tax credits which are due to expire on April 30th, 2010 (in Massachusetts a first time home buyer can monetize the tax credit and use it toward their down payment, which greatly increases the buying power of a purchaser). The second is that current mortgage rates in Massachusetts are historically low and the Federal Reserve seems inclined to raise rates in the near future. The third is that home prices in Massachusetts are lower than they have been in many years.

Total Mortgage Services offers a wide spectrum of mortgage products in Massachusetts to suit the needs of almost any potential borrower.  Let’s look at three popular traditional mortgage options:

Note: Current mortgage rates change each business day, often several times throughout the day. Rates quoted at 4:00 p.m. (EST) on Wednesday, February 17, 2010.
*All rates are calculated for borrowers with a credit score of 740+.
*All rates shown are based on a 30-day lock for a purchase or rate/term refinance.
*All rates are calculated with 2 points, 80% LTV, and $2000 in closing costs.
*Due to the changing nature of interest rates, it is not possible to accurately compute the total amount a borrower would pay with an adjustable rate mortgage over the life of the loan.

The pros and cons of different Massachusetts mortgages become more apparent when looking at the numbers.  Fixed rate loans are good for those who are planning on staying in a property for a long time.  They provide consistency in month to month payments, and the comfort of knowing precisely what the cost of a mortgage is going to be.  Adjustable rate mortgages may be good for people who are staying in a home for a shorter period of time to take advantage of the initially lower monthly payments, or who don’t have the funds to make the larger monthly payments required by a fixed rate loan.  When taking out an adjustable mortgage the borrower must be sure they have the income to pay a potentially higher monthly payment when the mortgage adjusts after the initial fixed period.

If a borrower has the financial means, they may want to consider taking out a mortgage with a shorter term.  Monthly payments on a shorter mortgage are significantly higher, but over the life of the loan the borrower pays far less interest.

Whichever type of loan you wish to take out, it is important to fully understand the terms of the loan and the obligations you are taking on.  For expert advice on which type of mortgage is the best for you, contact Total Mortgage’s loan professionals at 877-868-2503.