Princeton, NJ

What is the condition of the real estate market in the greater Princeton NJ area? This question continues to be on the minds of most homeowners, not just those who are currently selling or buying their house. How can we find the possible answers?

You probably read that now is the “buyers” market and that five years ago it was “sellers” market. By this people usually mean who has the "upper" hand in the market, or whether there are more buyers than sellers. In the real estate language buyers and sellers market are often defined by “inventory accumulation”. This technical sounding term is a result of simple arithmetic: dividing the total number of the available houses on the market by the average number of sales per months. For example, if there are currently 20 houses on the market and on the average 2 houses per month are sold, the inventory accumulation equals two.

In the past it was believed that the “buyers” market is when the inventory accumulation exceeds 6 months. It is considered to be the “sellers” market when inventory accumulation is less then 6 months.

Looking at the chart bellow it would appear that Hopewell NJ is the only market (out of the five examined) that by this definition is “buyers” market.

Princeton Area Housing Inventory and Accumulation - January 2008*

This data seems to contradict what we hear on the news about the real estate markets that it is a buyers market. What is happening is that the sellers are holding off putting their homes on the market, or taking them off the market, resulting in the low supply of homes for sale and driving the inventory accumulation numbers down. That does not necessarily mean that the prices of homes will go up (which is what usually happens when there is scarcity of supply). The buyers are not rushing into the market and are waiting for the prices to go down.

What this means for the Princeton area home buyers is that is still a good supply of homes without the pressure of the imminent price increases. For the sellers it means that the homes that are priced at market are still being sold, because life goes on and the supply is not very high. It also means that home sellers can’t count on appreciation if they bought their home within the last two-three years.

You can read more about the Princeton NJ area real estate statistics in the following articles:

Princeton real estate -how long does it take to sell

Princeton Real Estate Market Trends

What is Going On In The Princeton Real Estate Market?

Princeton Real Estate -Are the House Prices Up or Down?

Princeton Real Estate - What is the outlook?

Princeton Real Estate -Are the House Prices Up or Down?

*Data is based on Trend MLS and is not guaranteed.

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Please contact Faina Sechzer at 609-553-4175 when looking for real estate, homes for sale and/or listing your house to sell, and relocation assistance in Princeton, Montgomery Township, West Windsor, Hopewell, and Lawrenceville New Jersey. Referrals are accepted.
If you are moving out of the greater Princeton area, please inquire about the countrywide relocation program.

• As the market declined, it took longer to sell the house.

• The DOM is different for different towns that are next to each other.

• Real estate markets are extremely local, where even one street can be different from another in terms of DOM.

• Pennington - experienced 122% increase in the DOM (compared to 2004) –the largest of the five towns examined.

• Princeton – experienced the smallest increase – 19% (compared to 2004).

You can read more about the Princeton NJ area real estate statistics in the following articles:

Princeton real estate -how long does it take to sell

Princeton Real Estate Market Trends

What is Going On In The Princeton Real Estate Market?

Princeton Real Estate -Are the House Prices Up or Down?

Princeton Real Estate - What is the outlook?

Princeton Real Estate -Are the House Prices Up or Down?

____________________________________________________________________________________________________________________________

Please contact Faina Sechzer at 609-553-4175 when looking for real estate, homes for sale and/or listing your house to sell, and relocation assistance in Princeton, Montgomery Township, West Windsor, Hopewell, and Lawrenceville New Jersey. Referrals are accepted.
If you are moving out of the greater Princeton area, please inquire about the countrywide relocation program.


Copyright 2007 Faina Sechzer All rights reserved. This information cannot be copied, reproduced, transmitted, distributed, displayed or published.

Do you know the difference, as a consumer or even as a realtor? It can be deceiving when shopping for a home, because you might think that you are fully approved, but you aren't. Why doe this matter? There are several reasons why.

Pre-Qualification Letter

Just a standard letter by the lender stating that they have either verified your information over the phone or from your originals. The loan officer will review the information, anything from credit, to income, and with regards to assets. They then will place you in a certain program and go over the details with you. Usually to put an offer on a house, the realtor would want a pre-qual letter to accompany the offer that they will give the seller's agent. It will usually have a specified loan amount that you are qualified up to in regards to purchasing of your home. This paper doesn't always have the weight that one might think. There are many reasons why to this.

• There have been some loan officers known to not even check your credit.
• Some lenders just put anything down to get you comfortable, thinking that it's easy as 1-2-3.
  
• Some consumers who thought were pre-qualified actually weren't, because the loan officer didn't really know how to qualify. Meaning, they didn't know how to read the credit, came up with the wrong income, etc etc. These mistakes could put you into a new loan program that might have a higher rate. Worst of all, that you wouldn't be qualified period.

Now, don't get me wrong. I am not saying that this happens often, but that it has happened in the past.

Here is a good blog written by Herb Hamilton : Choosing the Right Lender My 22 questions and the Answers to the Questions. This can help some consumers on how to shop for a lender and what to look for.

Pre-Approval Letter

H

Above is a copy of a Pre-Approval letter, better known as a Commitment Letter or a Loan Approval Letter.

This type of letter and or approval is very important for several reasons.

• All of your information has been verified and approved by an underwriter. The only time that this might need to be updated is if there is a change in your income or if the approval has expired. Depending on the type of mortgage program, your credit is good for 45 to 90 days and would be listed on the commitment letter.
• With this approval, you might have a better chance at getting your offer accepted. Why? Because this would supersede any pre-qual letter. I have seen a few clients actually get a lower offer accepted because of this type of approval. This is a more powerful tool than anything else offered.
• Basically, this form states that you are fully approved. Everything except for an appraisal, which would state "subject to an appraisal" and possibly in regards to title insurance also.

This commitment letter would show you what is still need to finalize the approval.

As a consumer, you want to be careful on how you shop for your lender. It's recommended to speak to friends, family, and co-workers for a referral of someone that they have used and trusted in the past. Sometimes your realtor has a few trusted lenders that they have worked with over the past several years. If you trust the realtor, this might be your best option.

One last thing to always keep in mind. When interviewing your loan officer, a very good one would ask you about your goals. He/she would want to give you different options and always be looking out for your best interest. Not just giving you what you want or think might be best for you. Just because your friend received a certain type of mortgage, doesn't mean it might be best suited for you. Remember, there is a Big Difference in regards to the different types of letters.

Another must read: Are you really approved for that mortgage?

If you ever have any questions or would like to be pre-approved or qualified, please don't hesitate to contact me.

Jeffrey J. Belonger

Branch Manager

888-835-1663

Jbelonger@ihmci.com

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For more information on FHA loans, please go to this link. The FHA Expert

For more information on how you can obtain your dream home, please click here : Mortgage Financing Options

For important mortgage insight to watch for, please read : Consumers need to be aware of these Red Flags !!!!!

Copyright © 2007 by Jeff Belonger

I was reading through some blogs over the weekend and Mark Flanders Silverdale did a blog that gave definitions of PMI. What is PMI and can it be avoided. This can be such a confusing and sometimes misleading concept of why you must have mortgage insurance.

As Mark Flanders discussed, private mortgage insurance is not there to protect you, but to protect the lender in case of default. And the old rule is that you must have 20% or more down on the property to avoid this specific cost. I am only going to discuss the different types of mortgage insurance for conventional loans only. In regards to FHA and VA loans, they have their own types of mortgage insurance. And keep in mind, once you reach the 78% LTV mark, the lender has to drop the mortgage insurance. It's not the typical 80% mark that many would think, but this is if you opt to include mortgage insurance into your monthly mortgage payment. And sometimes another reason to avoid mortgage insurance would because the PMI company would underwrite the loan over again, after the lender looks at it. Depending on the difficulty of the loan, this might stop you from getting your dream home. For more details, please consult your loan officer or lender.

Here are the types of mortgage insurance: (and I will show examples of each type below)

1. Monthly mortgage insurance. The biggest and easiest mortgage insurance commonly used is the monthly paid insurance by the client. The larger the down payment, the less your monthly mortgage insurance would be.
2. 1st & 2nd mortgages combined. This next example is not necessarily mortgage insurance, but how to avoid it. This would be known as a 80/10/10 or 80/15/5, depending on how much you have to put down. And this might not always be the best way of avoiding PMI because you will have 2 mortgage payments. Another reason would be because you might not save as much in the payment, depending on your goals, which will be illustrated later.
3. Lender Paid Mortgage Insurance. This is where the lender will pay for your mortgage insurance, but by giving you a higher rate. This is not always a bad thing, depending on your goals and how long that you will be in the house. One reason is because your payment would be lower, even though your rate would be higher. Usually about 3/8% to ½% higher. And another positive reason is because you will have a better tax write-off.
4. One-Time Financed mortgage insurance. This is one of my more favorite ways of avoiding mortgage insurance. Again, this will depend on your goals in regards to how long that you will be in the house and depending on your loan amount. This can affect the total savings. But what takes place here is that you get a very large discount in regards to your mortgage insurance. It gets added onto your loan amount, it doesn’t affect your LTV, and you also get a better tax break and write-off because your loan amount will be higher.
5. Last, there are 1 to 2 more ways to avoid PMI, but they are more complex and aren’t the best solutions. One of these options is called half and half. You pay half of your premium upfront and the other half monthly. The first 4 are your best options out there.

Below is an outline of what I have discussed by using examples. In these examples, the client will be putting 10% down on a $250,000 property. Their loan amount will be $225,000. When shopping, don’t forget that you need to compare the same closing costs for each scenario. In these scenarios, let’s just assume they are with no points and no closing costs, trying to keep it simple. And that these are 30 yr fixed rates. But these examples with show how to save you money, leading you to a better savings in regards to your home.

2 loan amounts Financed PMI rate 2.10%

$200,000 & Financed Amt $ 4,725

$ 25,000 New Ln Amt $229,725

Type of PMI Monthly PMI 80/10 1^st & 2^nd Lender Paid PMI Financed PMI

Interest Rate 6.50% 6.50% / 8.00% 7.000% 6.50%

1^st 2^nd

Payments

Monthly P & I $1,422.15 $1,264.14 + $183.44 $1,496.93 $1,452.01

payment

Monthly PMI $ 144.38 0 0 0

Total monthly

Payment P & I $1,566.53 $1,447.58 $1,494.93 $1,452.01

(not incl. taxes This scenario is

& homeowners) based on if you do

the 2^nd mtg as a 30 yr,

not as a 15 yr.

Even though scenario # 2 is the cheapest, it’s hard to compare because it all depends on what you can get as a 2^nd mortgage rate. And the difference between this scenario and # 4 is $4.43 difference. In regards to the financed PMI, scenario # 4, you are now writing off the interest on the full loan amount and that you received a hefty savings just in the mortgage insurance itself.

***But again, each scenario is there for different reasons and each client is different. Please consult your loan officer or advisor. Like I said before, my main concern is knowing my clients goals in order to help give my advice to which is better suited for you.***

If you ever have any questions, please don't hesitate calling me for information on this.

Jeff Belonger 888-835-1663 e-mail: jbelonger@nationalfuturemortgage.com