Anxious About the Mortgage Process? Start Here

Let’s be frank: It’s not easy to get a home mortgage. Nor is it impossible. In fact, millions of people apply for and obtain a new mortgage every year.

If you want to get a mortgage but you’re anxious about the process, you might want to start with online research and self-education.

Online is where most people begin, according to research from the National Association of Realtors, or NAR. Researching online can help you get comfortable with the process and find professionals to contact.

Eventually, you’ll have to reach out to a live person to move forward. As Ken Pozek, a Realtor with Keller Williams Realty in Northville, Mich., says, “You can’t figure out everything using an app.

“Until you talk to someone who’s very knowledgeable, you might forget to ask about private mortgage (insurance), homeowner association dues — there are so many little idiosyncrasies. It’s the mortgage professional’s job to walk you through that,” Pozek says.

Realtor, lender teamwork

Typically, you’ll need to choose a lender before you can start seriously shopping for a home, though it’s fine to contact a Realtor first to get a referral to a lender, says Jay Dacey, a mortgage broker for Metropolitan Financial Mortgage Co. in Minneapolis.

“Unless you’re a cash buyer, you’re going to need to get a mortgage,” Dacey says. “A good Realtor is going to want you to get preapproved before they put you in their car and take you out driving and showing you houses.”

Realtors want to help buyers get started with the mortgage process, says Amy Butterworth, associate broker at Gibson Sotheby’s International Realty in Boston.

“We make sure we’re involved in the mortgage process as well, so if buyers are putting in an offer on a property, (we know) they’re ready to go from the finance standpoint as well,” she says.

The 20% down payment myth

Fearful first-timers need to let go of two common misconceptions about getting a mortgage, Dacey suggests.

The first is that you’ll have to save at least 20% of a home’s purchase price for your down payment. In fact, if your credit score is acceptable, you can get a conventional home loan with a down payment of just 5%, and the entire amount can be a gift from a family member, Dacey explains.

An FHA loan insured by the Federal Housing Administration requires just 3.5% down.

A July 2013 NAR survey of 8,767 homebuyers and sellers found that nearly 90% of buyers financed their purchase. The median down payment for first-timers was 5%.

Source: National Association of Realtors

Not everyone qualifies for help

The second misconception is that first-time buyers are automatically entitled to tap some sort of broad generic first-time homebuyer program. Assistance programs do exist, but each is unique and many are restricted to certain geographic areas, Dacey explains.

“If you’re buying a house for a special program, you’re going into it with the wrong intentions,” he says. “Find the house first, then see if there are any special programs.”

Get ready for the paperwork

First-timers also need to get ready for the lender’s inevitable onslaught of requests for financial documents. The amount of paperwork can amaze, humble and frustrate borrowers, says Ed Conarchy, a mortgage loan originator at Cherry Creek Mortgage Co. in Gurnee, Ill. A good tip is to ask for a list of all — underline that — the documents that might be necessary, and be prepared to provide them.

Comfort level to buy, own

First-timers also need to get comfortable with how much they feel they can afford to spend to buy and own a home. That amount might be less than the maximum they’re qualified to borrow, Conarchy says.

“What you can get approved for and what you’re comfortable with are usually two different things,” he says.

One reason: Home repairs and maintenance can be more costly than many new homeowners realize. That means the tradeoffs between renting and buying might not be clear without some number crunching. It’s not adequate, Conarchy suggests, just to compare monthly rent to a monthly mortgage payment.

“Don’t concentrate on just getting approved and having a mortgage salesperson tell you, ‘We can get you a mortgage and get you into that house,’” he says. “Make sure it’s going to be a fit for your personal situation.”

Copyright 2014, Bankrate Inc.

Realtor receives President’s Circle Award

Posted Apr. 18, 2014 @ 2:01 am


REALTORS® Running for a Cause Supports the Boston Marathon

BOSTON, April 18, 2014 /PRNewswire-USNewswire/ — Both local and national REALTORS® joined together earlier this month to fundraise for REALTORS® running in the Boston Marathon. Representatives from the National, Massachusetts, and Greater Boston Associations of REALTORS® organized “REALTORS® Running for a Cause” on April 6 at Harpoon Brewery in Boston. The event was intended to help REALTORS® meet their fundraising goals in order to participate in the Boston Marathon on this significant year. Many of the REALTORS® were running in the 2013 Boston Marathon when tragedy struck the finish line, and have vowed to finish the race this year.

Bill Manchenton, of Coldwell Banker in Tewksbury, MA is among the REALTORS® running. “Last year, I was on Heartbreak Hill when the explosions occurred on Boylston Street. While I was fine, my wife, son and friends were a block away when it happened. Luckily for them, they were not hurt. Two days after they reopened Boylston, our 15 year old son and I ran the last 8.06 miles to the finish line. This year, I hope to finally cross the finish line in the same day!”

To date, $12,500 was raised for REALTORS® running from Massachusetts, New Hampshire, Pennsylvania, Ohio, South Carolina, Nevada, Washington, Texas, California, and Washington DC. The charities that they are running for include the American Medical Athletes Association, the Leukemia and Lymphoma Society, Camp Shiver, Habitat for Humanity, Bay Cove, the Alzheimer’s Association, Boston Children’s Hospital, Medicines for Humanity, Wounded Warrior Project, the Baypath Humane Society of Hopkinton, Project 351, and the Dana Farber Cancer Institute. Donations are still being accepted, and commemorative t-shirts are available for sale as well. For more information, please visit

SOURCE Greater Boston Association of REALTORS(R)

Freddie Mac Drops 2014 Home Sales Forecast

Friday, April 18, 2014, 11:38am

Freddie Mac lowered its forecast for 2014 home sales today in a new report issued by the government-sponsored entity this morning.

While Freddie thinks new home construction will continue to grow, predicting an 18 percent increase in new home sales this year, it lowered its overall home sales projection to 5.5 million from 5.6 million, based on lower sales volume through the first two months of the year.

Freddie also predicts the spike in house prices will slow, with appreciation moderating to an annual growth of 5 percent in 2014.

“We’re getting mixed signals as we start the spring home buying season. Tight inventory may pose a significant challenge for home buyers in many markets across the country, which may result in higher home prices and sales being lower than expected,” Frank Nothaft, Freddie Mac vice president and chief economist, said in a statement. “This is good news for those markets that have room to run on the house price appreciation front, but it’s also going to increase the affordability pinch in many markets, especially along the country’s east and west coasts.”

Increased consumer confidence and decreasing unemployment across the country should help to strengthen the market, according to the Freddie Mac report. All 50 states saw declining unemployment rates, with 18 states experiencing at least a half percentage point reduction in their unemployment rate over the previous three months ending in February.

The GSE also expects interest rates to continue to gently rise, ending the year around 5 percent.

Real estate has never been a business that attracts young people

According to the National Association of Realtors’ most recent member survey, the median age of Realtors in 2012 was 57, up from 51 in 2007.

Just in case anyone forgets the difference between “median” and “average,” that means about half of all Realtors were older than 57, and half were younger.

There are people who see this as a problem. If it’s a problem, it’s not a new one. Becoming a real estate agent right out of high school or college is not all that common.

“Realtors frequently have had careers in other fields prior to real estate, the most common being in management, business and financial professions, followed by sales and retail,” NAR analysts observed. “Only 6 percent indicated that real estate is their first career.”

I’ve talked to several people under 30 who don’t have jobs, or who don’t have the jobs they want, and was unable to get any of them fired up about a career as a real estate agent.

The objections they have start with the lack of benefits and the lack of a steady paycheck. They don’t like the uncertainty of not knowing when the next payday will be.

The young people I’ve talked to believe that even being an employee at a startup company gives them more job security than being a self-employed, independent contractor.

Starting out as a real estate agent is tougher for young people who have no experience, and who may not have even had the experience of buying their own home. If they come from a real estate family, they may be able to start by working with a mother or father until they have some experience. Younger people may find being a real estate agent more attractive if they could get paid some other way than on a 100 percent commission basis.

The agents that I talked to who started as real estate agents right out of high school or college told me what a hard time they had finding clients. They felt that it was because of their age.

But most agents struggle to find clients when they start out, regardless of their age. I remember feeling as though no one took me seriously in my first job after college, and it wasn’t in any way real estate related.

Being a real estate agent is expensive. Many who try have to quit because they cannot afford to go for months without making money. Some people who like the real estate industry find other jobs in the field that are less risky.

Some say the bar to entry in real estate is too low. That may be true, but it takes money to stay in real estate, market houses and prospect for clients. The bar is low until the new agent runs out of money.

Even for people who are career changers and have a decade or more of work experience, choosing to be a real estate agent is a somewhat terrifying option. No one really knows if they can do it until they try, or if they will make enough money to survive. It takes energy, commitment and time to build a client base. It’s never an easy job, even when the market is good.

Considering the fact that there are always more real estate agents than we really need, I don’t think there will be a shortage anytime soon, even without a  steady influx of young people.

Brokers and agents will retire, quit or die. But when we do, I am confident that there will be a whole new group of people who will take our places. Most will be over 40, and they will be making career changes, bringing their experience into real estate.

There will always be the small group of people who will choose real estate as their first career, but I don’t see any sign that recruiting efforts will cause  an influx of young people to bring down the median age.

My theory is that the median age of Realtors has been going up because people are living longer and working longer. There isn’t any reason why we have to retire at a certain age.

NAR members are getting older because this isn’t a job that attracts young people, and it never has been.

I predict the median age will go up a bit more before it levels out. There are plenty of people who plan on working into their 70s and 80s and beyond.

Teresa Boardman is a broker in St. Paul, Minn., and founder of the St. Paul Real Estate blog.

Naples sales noted in Sotheby International Realty's gains for 2013

MADISON, N.J. — Sotheby’s International Realty Affiliates LLC said its U.S.-affiliated brokers and sales professionals handled 24 percent more transaction sides in 2013 than 2012 — nearly three times better than the 9.2 percent gain in home sales sides reported for the overall market by the National Association of Realtors.

The Sotheby’s International Realty brand’s sales volume grew by 29 percent in 2013, compared to 19 percent for the overall market, according to the National Association of Realtors.

“We are very excited about this news for our brand and also enjoyed a highly successful 2013 season,” said Judy Green, president and CEO of Premier Sotheby’s International Realty, with 22 offices from Marco Island to St. Petersburg and in Charlotte, N.C. “Our firm had more than $2.8 billion in sales through the end of 2013 — a 22 percent increase from the same period in 2012. As more buyers realize the advantages of living along the coast, we are uniquely positioned at the forefront of our market’s finest real estate offerings, backed by the resources of the legendary Sotheby’s brand.”

The company closed more than 3,670 transactions during 2013. Of those, 15 percent or 534 of the total transactions were for properties priced greater than $1 million. Six percent, or 214 of the total transactions, were for properties greater than $2 million.

In the Sarasota region, the firm and its associates closed the fourth highest sale of 2013 in Sarasota County, the property at 1456 Point Crisp on Siesta Key, at $5,675,000.

In the Naples region, the firm and its associates closed several notable sales in 2013, including Collier County’s highest residential sale for the year, a $30 million homesite at 2658 Gordon Drive. Premier Sotheby’s International Realty’s Gary Jaarda represented the buyer in the transaction, which closed on June 24. Other significant closed transactions include properties at 3600 Nelsons Walk and 3101 Gin Lane, for $14 million and $12 million, respectively.

The Sotheby’s International Realty brand also reported growth in its global network, which encompasses 52 countries and territories worldwide. At year-end, the network totaled 700 offices, a gain of 6 percent, and more than 14,500 sales associates, up 13 percent. Sotheby’s International Realty affiliates worldwide reported 31 percent same store growth in sales volume.

Outside the United States, the Sotheby’s International Realty brand expanded its network in 2013 to provide its real estate services in: Cabarete, Dominican Republic; Swatar, Malta; Manila, Philippines; Melbourne and Gold Coast, Australia; Lugano, Switzerland; Dubai; United Arab Emirates; Riyadh, Saudi Arabia; and Panama City, Panama. The Sotheby’s International Realty brand also added six new residential real estate firms to its network across the United States in the following markets: Claremont and Palo Alto, Calif.; Westborough, Mass.; Charlestown, R.I.; Concord, Mass.; and Durango, Colo.

In 2013, the Sotheby’s International Realty brand also won Franchise Business Review’s Best in Category for Real Estate Franchisee Satisfaction award for the sixth year in a row and ranked second overall among the Top 50 Systems across all categories with 250 or more locations.

The Sotheby’s International Realty network is poised for continued growth this year. “We look to continue our worldwide growth, most significantly in Asia with the opening of Beijing Sotheby’s International Realty slated for the first quarter of 2014,” White said.

From a marketing perspective, the brand’s 2013 campaign delivered more than 700 million impressions. At the core of the Sotheby’s International Realty 2013 strategy was its relationships with pre-eminent media powerhouses including The New York Times, The Wall Street Journal and The Telegraph Media Group in both the print and online arenas, developed to showcase unique properties from the brand’s worldwide network.

The most innovative aspect of the Sotheby’s International Realty brand’s 2013 marketing efforts was the launch of a custom iPad application that enabled its complete marketing program to be made available digitally for network members to present to consumers on listing presentations via a unique, interactive format created using the Adobe Digital Publishing Suite.

Last year also saw the expansion of the Sotheby’s International Realty brand’s series of branded websites for specialty markets with the launch of Golf and Historic. Finally, the brand was featured on the ABC Supersign located in New York City’s Times Square at 44th and Broadway for the month of December in collaboration with the New York Stock Exchange. The 15-second video highlighted its lifestyle focus and drove viewers to for more information.

White said the Sotheby’s International Realty brand will continue looking for ways to use the latest technologies to enhance the real estate buying experience for consumers and further solidify its position as a leading luxury real estate organization.

The Sotheby’s International Realty network currently has more than 14,500 sales associates in approximately 700 offices in 52 countries and territories worldwide. Sotheby’s International Realty listings are marketed on the global website. In addition to the referral opportunities and widened exposure generated from this source, the network’s brokers and clients benefit from an association with the Sotheby’s auction house and worldwide Sotheby’s International Realty marketing programs. Each office is independently owned and operated.

Home Buyers Losing Opportunities to Buy Fannie Mae Foreclosed Homes to …

Home Buyers, Fannie Mae, StabilizationRising property prices in the US have left many would-be home buyers in the woods. Since they cannot afford the homes, investors are having a field day.

Fannie Mae runs an innovative program called ‘First Look’ which seeks to encourage home-ownership and promote neighborhood stabilization. According to the program, owner-occupants, public entities (and partners) and a few non-profits have the first right to buy foreclosed homes in Fannie Mae’s possession. For 20 days, investors cannot buy these properties.

Who is an owner occupant?

An owner occupant is a person who will start living in the property within 60 days of buying it and will continue living there for one year, at least. If you are planning to buy the property to hold in a trust, as a part time or vacation residence or if you want to purchase the property for another person, you are an investor, and you cannot buy the property in the first 20 days.

When a homeowner defaults on his home loan (owned by Fannie Mae), the mortgage company will take over the property and sell it. Fannie Mae is one of the biggest sources of foreclosed homes in the US. More than 50 percent of these properties are resold to individuals, local governments and non-profits; the rest are sold to investors.

Rising property prices play spoilsport

In spite of its mandate, Fannie Mae is not able to promote home ownership as much as it would like to because property prices are soaring. The only entities who can afford the higher rates are investors, who in turn rent the property out or resell after holding it for some time. Another reason why ‘First Look’ buyers are not able to buy foreclosed properties is because mortgage companies want the highest rates for their properties, and they usually mark them at the market or above market price.

Such issues have caused the ‘First Look’ program to lose some of its sheen. By the time property prices are reduced they are no longer in the program, and homebuyers have to compete with investors. For example, in Montview Drive (Marietta county, Atlanta), there are three similar properties on sale. One of the homes is foreclosed by Fannie Mae. The price of this property is $25,000 more than the others, making it the most expensive house on the street. Naturally, a homebuyer would be unwilling to pay $25,000 more for  property when he can get a similar one on the same street for a lower price.

The situation is only going to get worse. The Federal Reserve is tapering its quantitative easing which means interest rates are going to increase. As a result, would-be home buyers are in for a rough ride.

Freddie Mac: Mortgage rates near low for year; 30-year at 4.27%

Mortgage rates have fallen as the spring home-buying season begins, with Freddie Mac pegging the average 30-year fixed loan at 4.27% this week, the lowest it has been since early February.

The average for a 15-year fixed mortgage was 3.33% this week, near its low for this year, according to Freddie Mac’s survey of lenders released Thursday morning.

The rate for a 30-year loan averaged about 4.5% at the start of the year, more than a percentage point higher than the record lows of 2013 and 2012. Most forecasters predicted rates would continue rising as the Federal Reserve dialed back a bond-buying program designed to keep them low. 

QUIZ: Test your knowledge of mortgages

At, another rate tracker, Vice President Keith Gumbinger said the economy’s growth has been “more sideways than upwards,” leading investors to pull money out of stocks recently and show more willingness to accept lower interest rates. 

“News that rates are closer to recent lows than highs might actually put a few more buyers in the [housing] market this spring,” Gumbinger said. “Hopefully, they will find sellers to meet them,” a reference to recent shortages in homes on the market.

Freddie Mac asks lenders early each week about the terms they are offering to low-risk borrowers with 20% down payments or equivalent home equity if they are refinancing.

The borrowers would pay less than 1% of the loan amount in fees and discount points to the lenders, and third-party costs such as appraisals and title insurance are not included. Borrowers can lower their rates by paying additional discount points when they obtain the mortgage.

US 30 Year Mortgage Rate Chart

US 30 Year Mortgage Rate data by YCharts


SF Bay area home prices up 23% in March

Southland home prices surge, sales plummet

Water shortgage divides Californians on solutions

Blackstone Discusses Fannie and Freddie Stake

NEW YORK (TheStreet) – Blackstone Group  (BX) President and COO Hamilton “Tony” James confirmed the company’s preferred equity stake in Fannie Mae  (FNMA) and Freddie Mac  (FMCC) but said he does not believe the asset management giant will drive the debate over the future of the government sponsored enterprises (GSEs).

“I honestly don’t think we are going to be the mover and shaker on this,” James told TheStreet during a call with reporters following the company’s first quarter earnings release Wednesday. He added the firm does not have so large a position it will be a make or break player in the debate.

“We think we have a plan that makes a lot of sense in terms of getting the GSEs out of being a liability for the government,” James said.

James did not elaborate on the plan, though in a follow up email exchange a Blackstone spokesman said the company’s plan is distinct from a proposal floated by Fairholme Capital in November that Blackstone was reported to be behind.

“We have our own plan but do not want to comment on details,” wrote spokesman Peter Rose.

Fairholme has stood by its plan despite its rejection by the White House and other public officials. It has also stated in a letter to the Boards of Directors of Fannie and Freddie last month that in addition to its plan “there are other viable alternatives to restructure Fannie Mae and Freddie Mac, any of which would be more constructive than maintaining the status quo, which is unfortunately but steadily eroding the Company’s balance sheet and, in turn, weakening a cornerstone of the great American Dream.”

It seems unlikely government officials would be receptive to any plan backed by private investors, something James, who is friendly with many at the highest levels of government in both major parties, presumably knows better than anyone.

“Clearly this is going to be a highly political process,” he said.

GSE reform legislation proposed by Sens. Tim Johnson (D, SD) and Mike Crapo (R., ID) effectively ignores current shareholders, which in addition to Blackstone include high profile investors such as Perry Capital, Fairholme Funds and Pershing Square Capital among many others, as well as consumer advocate Ralph Nader.

It also codifies the Treasury Department’s controversial 2012 amendment to the 2008 conservatorship of Fannie and Freddie. The amendment changed the terms of Fannie and Freddie’s debt to the government. Instead of owing the Treasury an annual 10% dividend, the GSEs suddenly owed the Treasury all of their profits for an indefinite period, aside from minimal capital buffers. That amendment — also known as the “net worth sweep” — is at the crux of many of the roughly 20 lawsuits brought against the government by GSE shareholders. The lawsuits taking issue with the sweep contend it violates the Fifth Amendment of the U.S. constitution’s prohibition of the taking of private property for public use without just compensation. Blackstone is not a party to any of the lawsuits, though it will benefit if they succeed.

GSO Capital Partners, a unit of Blackstone, commissioned a liquidation analysis of Fannie and Freddie by restructuring firm Alvarez Marsal. The report, published last month, projected the mortgage giants would be worth about $170 billion combined if they were wound down.

– Written by Dan Freed and Antoine Gara in New York.

Fixed Mortgage Rates at Six Week Low

MCLEAN, VA–(Marketwired – Apr 17, 2014) – Freddie Mac (OTCQB: FMCC) today released the results of its Primary Mortgage Market Survey® (PMMS®), showing average fixed mortgage rates easing further for the second consecutive week helping to increase home buyer affordability at the onset of the spring home buying season.

News Facts

  • 30-year fixed-rate mortgage (FRM) averaged 4.27 percent with an average 0.7 point for the week ending April 17, 2014, down from last week when it averaged 4.34 percent. A year ago at this time, the 30-year FRM averaged 3.41 percent. 

  • 15-year FRM this week averaged 3.33 percent with an average 0.6 point, down from last week when it averaged 3.38 percent. A year ago at this time, the 15-year FRM averaged 2.64 percent. 

  • 5-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) averaged 3.03 percent this week with an average 0.5 point, down from last week when it averaged 3.09 percent. A year ago, the 5-year ARM averaged 2.60 percent.

  • 1-year Treasury-indexed ARM averaged 2.44 percent this week with an average 0.5 point, up from last week when it averaged 2.41 percent. At this time last year, the 1-year ARM averaged 2.63 percent. 

Average commitment rates should be reported along with average fees and points to reflect the total upfront cost of obtaining the mortgage. Visit the following links for the Regional and National Mortgage Rate Details and Definitions. Borrowers may still pay closing costs which are not included in the survey.

Attributed to Frank Nothaft, vice president and chief economist, Freddie Mac.

“Mortgage rates continued to ease this week as housing starts rose 2.8 percent in March but not as much as expected. Also, permits fell 2.4 percent in March to a seasonally adjusted annual rate of 990,000, which followed a slight downward revision of 4,000 permits in February.”

Freddie Mac was established by Congress in 1970 to provide liquidity, stability and affordability to the nation’s residential mortgage markets. Freddie Mac supports communities across the nation by providing mortgage capital to lenders. Today Freddie Mac is making home possible for one in four home borrowers and is one of the largest sources of financing for multifamily housing. Additional information is available at, Twitter @FreddieMac and Freddie Mac’s blog