MORTGAGE LOAN BARGAIN?

By Robin Shapiro

Summer Effects

Fannie Mae loan conforming limits have been increased to just under 1.1 million in high-cost areas. Loans above these limits are called “jumbos.” The rates on jumbos vary with supply and demand. Lately, jumbo rates have been .5% to .75% below loans for a 30-year fixed rate. Jumbo loans are one method to obtain a lower mortgage rate.

The summer season has mixed effects on the Rockaway real estate market. On the one hand, we are a beachfront community and the draw of the summer activities does bring people here for: beaches, swimming, cycling, running, surfing, organized teams for kids and adults (although the pandemic may crimp some of these this year; thankfully the “end” is in sight). On the other hand, some sellers are reluctant to sell during the summer because they enjoy the aforementioned activities and don’t want to give them up so fast!

Hybrid adjustable rate mortgages (hybrid arms) are fixed for the first three years, five years, seven years or 10 years, and the payments are amortized as if the loan was a regular 30year fixed rate. After the initial fixed rate period, the rate adjusts versus an index with caps on how much it can change.

Rates on arms are about .5% below a 30-year fixed rate currently. A combination—a jumbo hybrid loan—can maximize the reduction in the mortgage rate. My friend just got 5.375% on a 10 year/1 year jumbo hybrid arm. That’s fixed at 5.375% for ten years. The monthly cost is $560/100k. He plans on selling or refinancing before the ten year period ends.

Palm Sunday is this Sunday, April 2. Good Friday is on April 7. Easter Sunday is April 9. Passover begins Wednesday evening April 5 and ends Thursday night April 13. No work is permitted on April 6, 7, 12 and 13 for the observant. Happy Holidays to all. Call me. Love, Robin.

It can be harder to sell real estate during the summer due to vacations by buyers and sellers alike. Summer activities can also occupy people instead of allowing them to focus on the home sale process.

The spring season has been generally good for our real estate market. There has been action across the board in all price categories with an emphasis on the range below $1 million (approx). Prices have firmed up within the framework of recent comparable sales and in some cases are creeping higher. Inventory levels remain very low.

Call me, Love, Robin. 718-490-9463

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