Tag Archives: #downpayment

What Actually Determines Your Mortgage Rate

There’s lots of commentary about impact when the Federal Reserve raises the federal funds rate. (That’s the amount banks charge each other for short term loans.)

Even though the rate has very little to do with mortgage interest, it often becomes a point for discussion, which can illustrate how much he “experts” actually don’t know about the subject.

So, here are the four items that do impact your mortgage interest rate.

Your Credit Score

Credit scores can play a big role in your mortgage rate. Freddie Mac explains: “When you build and maintain strong credit, mortgage lenders have greater confidence when qualifying you for a mortgage because they see that you’ve paid back your loans as agreed and used your credit wisely. Strong credit also means your lender is more apt to approve you for a mortgage that has more favorable terms and a lower interest rate.”

That’s why it’s important to maintain a good credit score. If you want to focus on improving yours, a trusted financial advisor can give you expert advice.

Your Loan Type

There are many types of loans, each offering different terms for qualified buyers. The Consumer Financial Protection Bureau (CFPB) says: “There are several broad categories of mortgage loans, such as conventional, FHA, USDA, and VA loans. Lenders decide which products to offer, and loan types have different eligibility requirements. Rates can be significantly different depending on what loan type you choose.”

When working with your real estate advisor, make sure you know which types of loans you may qualify for as it may influence the kind of property you can purchase.

Your Loan Term

Another factor to consider is the term of your loan. Just like with location and loan types, you have options. Freddie Mac says: “When choosing the right home loan for you, it’s important to consider the loan term, which is the length of time it will take you to repay your loan before you fully own your home. Your loan term will affect your interest rate, monthly payment, and the total amount of interest you will pay over the life of the loan.”

Depending on your situation, the length of your loan can also change your mortgage rate.

Your Down Payment

If you’re a current homeowner looking to sell and make a move, then you can use the home equity you’ve built over time toward the down payment on your next home. The CFPB explains: In general, a larger down payment means a lower interest rate, because lenders see a lower level of risk when you have more stake in the property. So if you can comfortably put 20 percent or more down, do it—you’ll usually get a lower interest rate.”

To learn more, connect with a lender to find out the difference a higher down payment can make for your new mortgage.

Bottom Line

These are the major factors that can help determine your mortgage rate, if you’re buying a home. It’s important to work with a reputable lender, who can pre-approve you and give you honest advice about interest rates now and what can be expected in the future.

If you are looking for a lender, we work with several, who we can highly recommend. Let’s connect at 508-360-5664 or msennott@todayrealestate.com and we’ll pass along their contact information.

Knowing what you can afford then helps us locate the homes that fit your budget. And we’ll be sure that you stay in touch with your lender in case a rate change impacts what you can afford.

Let’s talk soon…

Mari and Hank

Should You Sell Your House This Year?

There’s no denying that the housing market is undergoing a shift as buyer demand slows and the number of homes for sale grows.

On Cape Cod, there were 231 homes for sale in January. In August, there were 563. This is nowhere near what we consider to be a normal market. But, what it does represent is a slow tick upward in the number of homes available.

So, here’s a look at the key opportunities you have if you list your house this fall.

Opportunity #1: Where Can You Go?

We often hear from those who are thinking about selling that their biggest concern is that they don’t know where they can go. But, one of the biggest stories today is the growing supply of homes for sale primarily because higher mortgage rates helped cool off the peak frenzy of buyer demand. But what you may not realize is, this actually can benefit you as a seller

If you’re marketing your house to make a move, it means you’ll have more options for your own home search. This gives you an even better chance to find a home that checks all of your boxes. So, if you’ve put off selling because you were worried about being able to find somewhere to go, know your options have improved.

Opportunity #2: The Number of Homes on the Market Is Still Low

Just remember, while data shows the number of homes for sale has increased this year, housing supply is still firmly in sellers’ market territory. To be in a balanced market where there are enough homes available to meet the pace of buyer demand, there needs to be a six months’ supply of homes nationally. According to the latest report from the Cape and Island Association of Realtors there’s a 1.9 month supply here.

While you’ll have more options for your own home search, inventory is still low, and that means your home will still be in demand if you price it right. On Cape, the Cumulative Days on Market Before Sale is 29 (YTD), still quick by traditional standards, but not the gone-in-a-weekend pace of even just a few months ago.

Opportunity #3: Your Equity Has Grown by Record Amounts

The home price appreciation that the market experienced over the past few years has likely given your equity (and your net worth) a considerable boost.

Danielle Hale, Chief Economist at realtor.comexplains: “Homeowners trying to decide if now is the time to market their homes are still in a good position in many places across the country as a decade of rising home prices gives them a substantial equity cushion…”

While there are no statistics available on individual equity, we can report based on our own personal experience and that of our sellers that this is true.

So, if you’ve been holding off on selling because you’re worried about how rising prices will impact your search, rest assured your equity can help. It may be just what you need to cover a large portion (if not all) of the down payment on your next home.

That’s what we did a few months ago. We used the equity in our home as down payment for our new one. So, we were able to secure where we were going before the For Sale sign ever went up in our yard.

There’s often never a “good time” to market a home: an unexpected job transfer, the loss of a loved one, or a family break up can make the decision hard and the process difficult. But sellers manage to get through it with the help of a knowledgeable professional.

If, however, the market is presenting you with an opportunity to benefit from your long-term real estate investment and make the change that you’ve been contemplating for years, why not move forward?

Let’s connect at 508-360-5664 or msennott@todayrealestate.com to talk about your possibilities. We’re happy to help.

Mari and Hank

Three Tips for First-Time Homebuyers

Buying your first home is a major decision and an exciting milestone. Even though it can feel daunting at times, it has the power to change your life for the better. These days, if you’re looking to purchase your first home, you’re probably concerned about what’s happening in the housing market, how much you need to save, and where to start.

Here are three tips to help you confidently pursue your dream of homeownership.

1. Consider All Options Because Inventory Is Low

As we all know, there are far more buyers in the market than there are homes available for sale. So, it’s a good idea to do what you can to increase your pool of options. That could mean expanding your search to include additional housing types. For first-time buyers, considering condominiums and townhouses can be an excellent way to increase your choices.

According to Bankrate: “Buying a condo can be a great way to dive into homeownership without worrying about the upkeep that comes with single family homes.”

Condos and townhouses are both great entryways into homeownership. When you buy either one, you can start building equity which increases your net worth and can fuel a future move.

You might also consider expanding your area of interest. A few miles could make a difference in price and homes to choose from.

2. Know Your Down Payment Could Be More Within Reach Than You Think

Saving for a down payment can feel like one of the biggest obstacles for homebuyers, but that doesn’t have to be the case. Acccording to Bankrate: “One of the biggest misconceptions among consumers is what the typical down payment is and what amount is needed to enter homeownership.”

Data from the National Association of Realtors (NAR) shows the median down payment hasn’t been over 20% since 2005. The graph below breaks down the median down payment by age group for recent homebuyers according to the 2022 Home Buyers and Sellers Generational Trends Report from NAR (see graph below):

Three Tips for First-Time Homebuyers | MyKCM

Based on the data above, the median down payment for all homebuyers is only 13%. That’s well below the common misconception of 20%, and it’s even lower for younger buyers. This could mean you may not need to save as much for a down payment as you initially thought.

Some loan options require as little as 3.5% down for buyers who qualify. While there are advantages to putting 20% down, especially in today’s competitive market, know that you have options. 

3. This Isn’t the Time to Take Uncle Harry’s Advice

Finally, no matter where you are in your homeownership journey, the best way to make sure you’re set up for success is to work with a professional.

Well meaning relatives like Uncle Harry, who “knows a little something about real estate,” or family and friends, who bought houses a decade or more ago, are not your best sources of information and advice about today’s housing market.

(They might be the ones telling you that you need 20% for a downpayment!)

If you’re just starting out, a real estate professional can help you with the initial steps, including educating you on the process and connecting you with a trusted lender to get pre-approved.

Once you’re ready to begin your search, we can help you understand the market where you’re interested and search for available homes.

And when it’s time to make an offer, we can advise you on what the current trends and expectations are and help your offer stand out above the rest.

Curious about your options? Let’s connect at 508-360-5664 or msennott@todayrealestate.com to discuss what’s possible. It’s important to have the correct information to make an informed decision.

…and remember. We know of what we speak. We’re selling and buying now, too. Check out our series “Mari Makes the Move” on our YouTube Channel, Mari Sennott Plus. We’ll be posting new episodes soon.


Thanks to everyone who came by the Sandwich Office of Today Real Estate on Saturday to have their valuable documents shredded by Great White Shred. Our goal was 100 “boxes” and we reached 93, even though the weather didn’t exactly cooperate. We plan on doing it again late summer/early fall.

Thanks as well to Kristy Sassone from First Home Mortgage for the assist with coffee and donuts and our raffle prize sponsors Jason Goldstein Photography, JDs Burgers and Sushi, Tomatillos, and Penguins Ice Cream.

Enjoy your week.

Mari and Hank

Millennials: Looking for More Space?

If you’re a millennial, buying a home might be top of mind for you right now. Your generation is the largest group of homebuyers in the market today and has been since 2014, according to the National Association of Realtors (NAR). While other millennials are looking to buy for the first time, you may be one of the many, who are discovering you’ve already outgrown your first house.

If that’s the case, you’re not alone. The past two years brought about significant changes for many people. Today, many homeowners are reevaluating what they truly need in a house. As a recent report from the Wall Street Journal states: “The pandemic and the emergence of remote work accelerated millennial home-buying trends already under way…Millennials who already owned homes traded up for more space.”

So, if you’re now working remotely or simply have a growing need for additional space, it may be time to move. Even if you purchased your current home over the last few years, you can still move into a different one that has the space and features you’re looking for. That’s because there’s a good chance you have more equity than you realize.

As Diana Olick, Real Estate Correspondent for CNBCnotes: “The stunning jump in home values over the course of the Covid-19 pandemic has given U.S. homeowners record amounts of housing wealth. About 42% of homeowners were considered equity-rich at the end of last year, meaning their mortgages were half or less than half of the value of their home!

Growing equity can be the key you need to fuel your next move, especially if you’re looking to purchase a larger home. When you sell your current house, the equity that comes back to you in the sale can be used toward the down payment on your next home.

Equity plus low mortgage interest rates would make what might appear to be the “unaffordable” actually affordable.

Your purchasing power may be greater than you realize, making a move to a larger home a realistic option. 

Curious about your options? Let’s connect at 508-360-5664 or msennott@todayrealestate.com. We’re happy to answer your questions.

It’s important that you have the right information to make an educated and informed decision.

Have a good week…

Mari and Hank

The 20% Myth

You’ve been saving for a down payment to buy a home. You know this is the time to take advantage of historically low mortgage interest rates. But, with escalating prices and bidding wars for the limited number of properties currently available, you may be worried that you just don’t have enough money to make a successful offer.

But, hold the phone.

That 20% down payment your Uncle Harry, “who knows a little something about real estate,” has been telling you about????

It hasn’t been true for years!

The reality is — whether you’re looking for your first home or you’ve purchased one before — you most likely don’t need to put 20% down.

Data in the 2020 Profile of Home Buyers and Sellers from the National Association of Realtors (NAR) indicates that the median down payment actually hasn’t been over 20% since 2005, and even then, that was for repeat buyers, not first-timers. As the image below shows, today’s median down payment is clearly less than 20%.

Do I Really Need a 20% Down Payment to Buy a Home? | MyKCM

What does this mean for home buyers?

The median down payment was lowest for first-time buyers with the 2020 percentage coming in at 7%. If you’re a first-time buyer and putting down 7% still seems high, understand that there are programs that allow qualified buyers to purchase a home with a down payment as low as 3.5%. There are even options like VA loans and USDA loans with no down payment requirements for qualified applicants.

While it’s likely that you won’t need to put down 20% of the purchase price, you do need to do your homework. Meet with a qualified and reputable lender to review your options before starting your search.

Don’t let the 20% down payment myth keep you from hitting your home ownership goals. If you’re hoping to buy a home this year, let’s connect to review the possibilities. If you don’t know a qualified lender, we can offer some suggestions.

Let’s talk soon…

Don’t wish for it; go for it!

Mari and Hank

msennott@todayrealestate.com – 508-568-8191