From the category archives:

Mortgage Pits

How deep are NYC’s all-cash pockets?

by Red Delicious August 13, 2010

Market reports, anecdotal data and the media have all pointed to the high-end market having picked up. The increased activity we’ve been seeing has been greatly fueled by a preponderance of all-cash buyers. They have been coming out of the woodwork both out of necessity and negotiability.

On the necessity front, today’s tight financing [...]

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To cash or not to cash: should you purchase a property with cash if you can or finance a portion of it?

by Red Delicious July 28, 2010

We have encountered many buyers out there who are hemming and hawing as to whether they should pay all cash for a purchase or take advantage of today’s low interest rates.  Even if you have the wherewithal to purchase a property outright, you may still value your liquidity over any purchase discount you may receive [...]

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How much is a mortgage contingency worth?

by Honeycrisp July 2, 2010

Weighing all-cash versus mortgage-contingent offers
Put another way, how should a seller compare and respond to an all-cash offer versus one requiring bank financing?
In these days of increased competition over well-priced properties, it’s not uncommon to receive a flurry of offers in the first few weeks of a listing.  Aside from following the tried and true [...]

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How low can interest rates go?

by Red Delicious June 28, 2010

Wherever you turn, you can’t help but hear that mortgage rates are at historical lows. Rates for 15- and 30-year loans are hovering around 4.4% and 4.9%, respectively.  At first, it was the Fed working to keep rates low via Mortgage Backed Securities purchases.  More recently, the Greek and then the broader European debt crisis [...]

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Up close with Jonathan Miller on the decreasing quality of appraisals today

by Honeycrisp June 25, 2010

With the front and center impact of appraisals on the sales market, we had a theory that we wanted to test with Jonathan Miller, blogger and appraiser extraordinaire as President and CEO of Miller Samuel.    Our thesis was that, in markets with upward momentum, appraisals will always under-estimate home values based on the reliance on [...]

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FHA Concession Limits Halved: How will developers adjust?

by Red Delicious June 23, 2010

At some point this summer, the FHA is going to cut maximum “seller concessions” from 6% of the home price to 3%.   Such concessions mean that the sellers (generally the sponsors of new developments) pay for costs associated with the sale of an apartment, including loan origination, transfer taxes, or entire closing costs altogether.   When [...]

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How to make sure your rate lock doesn’t expire when you need it most

by Honeycrisp June 6, 2010

With closings taking longer and longer, often up to three months for co-ops, it can be very difficult to manage locking in a good interest rate without growing new gray hairs.  This is because there are penalties associated with extending that rate lock AND a higher price for locking in a rate at longer than [...]

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“The best time in our generation to buy” … ???

by Red Delicious May 25, 2010

So notes Moody’s chief economist, Mark Zandi.  More accurately put, the coming weeks or months may well offer lowest cost of financing the purchase of a home in close to 50 years.
For some time now, we have been noting that interest rates have a high probability of increasing due to many factors including the [...]

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How tight credit standards are restricting many sellers to all-cash buyer pool

by Red Delicious May 20, 2010

Today’s rigid loan environment never ceases to create interesting and challenging scenarios for sellers and buyers, alike.  Buyers beware:  before falling in love with a property, ask the owner or the representing broker about the percentage of sponsor and rental units in the building.  One of them should have the answers.  The reason to ask [...]

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Mortgage contingency expirations and extensions … what you need to know

by Honeycrisp May 4, 2010

Today’s finicky credit markets are rendering mortgage contingencies a most common inclusion in purchase contracts.  A mortgage contingency makes the buyer’s commitment to purchase the property conditional upon the ability to obtain financing (technically getting the bank commitment vs. the mortgage itself). This is particularly the case in Manhattan, where a great proportion of loans [...]

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