Deborah Byrne - Berkshire Hathaway HomeServices Verani Realty Somerville
Accolades include: Government Certified, Performance Certified,Top 4% Sales Nationwide, Chairmans Circle, Presidents Circle, Relocation Director, Notary Public, Realtor®, CRS, CBR, CDPE, LMC, Energy Star Certification, Foreclosures MASS Certification, AHWD, CSP, SRES and RECS Top Producer in Massachusetts Awards
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Posted by Deborah Byrne on 12/25/2017

Whether you’re a first time homebuyer or a seasoned homeowner, the terminology of mortgages can be confusing. Since buying a home is such a huge financial decision, you’re also going to want to make sure you understand every step of the process and all of the conditions and fees along the way.

In this article, we’re going to explain some of the common terms you might come across when applying for a home loan, be it online or over the phone. By learning the basic meaning of these terms you’ll feel more confident and prepared going into the application process.

We’ll cover the acronyms, like APRs and ARMs, and the scary sounding terms like “amortization” so that you know everything you need to about the terminology of home loans.

  • ARM and FRM, or adjustable rate vs fixed rate mortgages. Lenders make their money by charging you interest on your home loan that you pay back over the length of your loan period. Adjustable rate mortgages or ARMs are loans that have interest rates which change over the lifespan of your loan. You may start off at a low, “introductory rate” and later start paying higher amounts depending on the predetermined rate index. Fixed rate mortgages, on the other hand, remain at the same rate throughout the life of the loan. However, refinancing on your loan allows you to receive a different interest rate later down the road.

  • Amortization. It sounds like a medieval torture technique, but in reality amortization is the process of making your life easier by setting up a fixed repayment schedule. This schedule includes both the interest and the principal loan balance, allowing you to understand how long and how much money will go toward repaying your mortgage.

  • Equity. Simply state, your equity is the the amount of the home you have paid off. In a sense, it’s the amount of the home that you really own. Your equity increases as you make payments, and having equity can help you buy a new home, or see a return on investment with your current home if the home increases in value.

  • Assumption and assumability. It isn’t the title of a Jane Austen novel. It’s all about the process of a mortgage changing hands. An assumable mortgage can be transferred to a new buyer, and assumption is the actual transfer of the loan. Assuming a loan can be financially beneficial if the home as increased in value since the mortgage was created.

  • Escrow. There are a lot of legal implications that come along with buying a home. An escrow is designed to make sure the loan process runs smoothly. It acts as a holding tank for your documents, payments, as well as property taxes and insurance. An escrow performs an important function in the home buying process, and, as a result, charges you a percentage of the home for its services.

  • Origination fee. Basically a fancy way of saying “processing fee,” the origination covers the cost of processing your mortgage application. It’s one of the many “closing costs” you’ll encounter when buying a home and accounts for all of the legwork your loan officer does to make your mortgage a reality--running credit reports, reviewing income history, and so on.  




Tags: Mortgage   terminology  
Categories: Uncategorized  


Posted by Deborah Byrne on 11/27/2017

When you get pre-approved for a mortgage, you may be excited to find out that you can afford a lot more house than you thought you could. Don’t be so fast, this is just what you can get a loan for. The bank doesn’t know a lot of factors about your finances. While you most likely had to provide a ton of income verification statements and information in order to get this ballpark figure, relying solely on the pre-approval number can put you in a bind when it comes to your finances. Your lender doesn’t know certain things like how much you spend on groceries or how much your cell phone bill is each month. 


What Lenders Consider


Lenders look at the health of your credit history, how much income you have and how much debt you have. These are the big factors that tell your lender about how much house you can afford. Yet, your home lender is not your financial advisor and can’t help you with household expenses and the like. When thinking about what price range of home you really can afford, consider these factors beyond the bank:


Your Monthly Budget


Your spending habits will ultimately affect your ability to pay the monthly mortgage bill. If you’re spending all of your disposable income, then you may not be able to afford much at all beyond what you’re already paying for rent. You don’t want to stretch your finances so thin that you won’t be able to afford food! 


Owning A Home Requires Additional Costs


Lenders do factor into their number the cost of homeowner’s insurance and property taxes, but don’t consider other things like utility bills, trash pickup and home repairs. All this can certainly add up when you’re a homeowner! 


Your Savings Is Nonexistent


If you’re unable to save any money at all if you’re a homeowner, then you’ll be in trouble. You need money stashed away in case of unemployment or an emergency. You also may be planning for things like retirement and future costs like children’s education. For the initial purchase of a home, you’ll need upfront payments available for the down payment and closing costs. However, you’ll need some more savings beyond that for everything that life brings your way!  


You Have Big Plans


Are you thinking of quitting your job and heading out to start your own business? Now may not be the best time to buy a new house. These changes could have a huge impact on your finances and leave you unable to pay your mortgage. Your lender won’t be asking about these plans, so you’ll need to know what the future holds (for the most part ) in order to keep your own finances secure. 


The bottom line is that anything that could leave you financially stressed is not a good idea. Considering that buying a home is one of the biggest purchases you'll ever make, you want to be sure that you keep your finances in check during the purchase process.  




Tags: Mortgage   loans   budgeting  
Categories: Uncategorized  


Posted by Deborah Byrne on 10/2/2017

An adjustable-rate mortgage (ARM) offers a home loan with an interest rate that may move up or down. Therefore, with an ARM, your mortgage payments may rise or fall depending on a variety of market factors.

For many homebuyers, an ARM remains a viable home financing option for a number of reasons, including:

1. Lower Interest Rate at the Beginning of Your Mortgage

An ARM enables you to purchase a home that may exceed your price range. As such, it frequently represents an ideal option for a young professional who expects his or her income to rise over the next few years.

With an ARM, you are able to lock in an interest rate for the first few years of your mortgage. For instance, with a 5/1 ARM, your interest rate will remain in place for the initial five years of your home loan. This means that your mortgage payments will remain the same for five years, then rise or fall based on market conditions.

Ultimately, an ARM may help you secure your dream home. In fact, an ARM often allows homebuyers to pay a lower interest rate at the beginning of a mortgage than the interest rate associated with many traditional fixed-rate mortgage (FRM) options.

2. Extra Savings for Home Improvements

If you choose an ARM with a below-average interest rate, you may be able to save extra money that you can use to improve your home.

For example, if you want to overhaul your residence's attic or basement or add an outdoor swimming pool, an ARM may help you do just that. Because you'll know exactly what you're paying for the first few years of your home loan, you can budget accordingly and invest in home improvements that may help you boost the value of your home.

3. Affordable Short-Term Financing

If you intend to live in a home for only a few years, an ARM may be preferable compared to an FRM.

In many instances, an ARM will feature a lower interest rate than an FRM. As a result, if you take advantage of an ARM, you may be able to secure a great house at an affordable price. Plus, if you sell your home before your initial interest rate expires, you can avoid the risk that your interest rate – and monthly mortgage costs – may rise.

Homebuyers should evaluate both ARM and FRM options. By doing so, a homebuyer can assess his or her home loan options and make an informed decision.

If you ever have ARM or FRM questions, banks and credit unions are happy to respond to your queries. These lenders will enable you to evaluate your financing needs so you can acquire your dream house.

Furthermore, consulting with your real estate agent may deliver immediate and long-lasting benefits. Your real estate agent can offer home loan recommendations and put you in touch with local lenders.

Dedicate the necessary time and resources to assess your home financing options, and you can move one step closer to securing your ideal house.




Tags: Mortgage   mortgage rates  
Categories: Uncategorized  


Posted by Deborah Byrne on 7/17/2017

A house is a personal statement for many people. It lets neighbors, relatives and friends know what you value. Buy a house in a thriving community and you could convey to close associates and passersby that you're a positive thinker who is serious about her current and future success. But, getting the keys to a great house in a thriving community at low interest rates is not as simple as house hunting for days, weeks or months.

Bad credit is an early step toward home mortgage regret

Securing a quality mortgage on a house in a good community requires you to have more than a job, especially considering that many mortgage lenders continue to be watchful about borrowers' financial readiness. To get a good mortgage on a house in a thriving community, you need strong credit scores.

Low credit scores do more than hurt your chances to secure a mortgage at the best interest rates. Work your way to low credit scores and you may pay more for:

  • Furniture that you buy on credit - Even if you get furniture through a delayed payment plan, you could be denied credit if your credit scores are too low.
  • Utilities - It doesn't always come to mind, but credit scores can also impact utilities. If utilities remain high for a year or longer, low credit scores could cause you to pay hundreds more a year than you would have paid if your credit scores were higher.
  • Homeowners insurance - Like utilities,homeowners insurance is generally a charge that must be paid monthly. High monthly homeowners insurance premiums could limit your ability to meet your rent should you have an adjustable rate mortgage and your mortgage goes up after you move into your house.

It bears repeating that low credit scores can make the difference between whether or not reputable lenders award you a fixed or an adjustable mortgage. Let something go wrong at your property that requires the focus of a licensed contractor like a plumber or electrician and you could pay more for repairs. Clearly, low credit scores put a lot of weight on more than where you live and what type of house you live in.

Good and bad credit habits start early

As soon as you make your first credit purchase, the clock starts ticking on your credit score development. When you take on revolving financial responsibilities like heating, cooling, water and electricity services, you also start to determine your credit score.

Your financial decisions may not leave much of an impression on you during your high school or college years. But, they will when you decide to buy a house. Develop the habit of making bad financial decisions and you could generate a low credit score.

It could take six months or longer to raise your credit score high enough to secure a great fixed mortgage with low interest rates. A low credit score could also force you to give in and buy a house in a declining or developing neighborhood.




Categories: Uncategorized  


Posted by Deborah Byrne on 6/5/2017

Do you know the difference between adjustable-rate and fixed-rate mortgages? An adjustable-rate mortgage (ARM) includes an interest rate that will change periodically based on market conditions. In many cases, homebuyers prefer fixed-rate mortgages (FRMs), as these mortgages enable homebuyers to pay the same monthly mortgage payment for the life of their loan. Conversely, an ARM may start with lower monthly payments but could rise over an extended period of time. This means that an ARM is likely to result in mortgage payments that vary over the years. Although an ARM may seem like an inferior option to its fixed-rate counterpart, there are several scenarios in which a homebuyer may prefer an ARM, including: 1. A Homebuyer Is Purchasing a Residence for the First Time. A first-time homebuyer may enter the real estate market with lofty expectations. But upon realizing there are few housing options that meet his or her needs, this buyer may settle for a house that represents a short-term residence. In this scenario, a homebuyer may be better off selecting an ARM. With an ARM, a first-time homebuyer may be able to make lower monthly payments in the first few years of homeownership. And then, when a better homeownership opportunity becomes available, this buyer may be able to work toward upgrading from his or her starter residence. 2. A Homebuyer Expects His or Her Income to Rise. The economy may fluctuate at times, but those who are assured of a higher income over the next few years may be better equipped to handle an ARM. For example, a student who is enrolled in a medical residency program may be a few years away from becoming a doctor. At the same time, this student wants a nice place that he or she can call home and may consider an ARM because it offers lower monthly payments initially. After this student completes the residency program, he or she likely will see a jump in his or her annual income as well. Thus, this homebuyer may be best served with an ARM. 3. A Homebuyer Is Facing an Empty Nest. Will your children soon be moving out of the home in the next few years? If so, now may be a great time to consider an ARM if you'd like to move into a new residence. Parents who are facing an empty nest in the next few years may be better off living in a larger residence for now, then downsizing after their children leave the nest. Therefore, with an ARM, parents may be able to buy a nicer home with lower monthly payments. And after their kids move out, these parents always can look into downsizing accordingly. Deciding which type of mortgage is right for you can be challenging for even an experienced homebuyer. Fortunately, lenders are available to answer any concerns or questions you may have, and your real estate agent may be able to offer guidance and tips as well. Explore all of the mortgage options at your disposal before you purchase a new residence. By doing so, you'll be equipped with the necessary information to make an informed decision that will serve you well both now and in the future.







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