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May Mortgage Newsletter

I hope your family and you are safe. The Coronavirus is the major concern currently. It has been spreading all over the world. Each day the reports seem to be getting worse. Hopefully it will come under control and there will be a vaccine developed. Johns Hopkins has created a wonderful report that is very helpful to understand the Coronavirus. : https://www.medpagetoday.com/infectiousdisease/publichealth/84698

On March 3rd, the Federal Reserve had an emergency rate cut to Interest rates. There was a full .5% rate cut. To put in in perspective, in the entire year of 2019, there were three rate cuts totaling .75%. So, .5% in an emergency situation is a good indication of the concerns of senior economists and policy makers.

Prior to the Coronavirus, forecasts were for interest rates to come down. Typically, mortgage lenders forecast the economy and offer interest rates accordingly. We are currently at or near the lowest mortgage rates in the past 30 years, perhaps the lowest in history.

One of the key indicators of interest rates is the 10 year Treasury yield. We did see the lowest yield in history. Even if the 10 year note goes down, I don’t think interest rates will go down too much further. There needs to be a spread between the mortgage rates and the 10 year note.

New Business Processes
To facilitate processing of loans, closings and other similar processes that require face to face contact, there are new methods we are adopting. For appraisals, Fannie/Freddie are granting a higher number of “waivers”. There are large amounts of historical data regarding property values. Therefore, a larger amount of appraisal waivers are being granted by the Fannie/Freddie automated underwriting systems. For those that do require an appraisal, in some cases, variations such as “drive by appraisals” and “desktop appraisals” are being considered. Both do not require an interior inspection by the appraiser.

The other major processes that will see changes are real estate closings. The state of NJ recently passed the acceptance of Remote notaries. Courts will now officially accept digital signatures. Lenders are scrambling to see how this can be implemented into their transaction life cycle. I foresee this will be a new and better way of closing real estate transactions. Although identification is still required, it can be done remotely. This eliminates the need for face to face engagement of the parties in a real estate settlement.

Here are our current rates:

30 Year Fixed : 3.125%
20 Year Fixed: 2.875%
15 Year Fixed : 2.750%
7 Year ARM: 3.000%
30 Year FHA: 2.875%

With rates so low, ARMs are not attractive for conforming loans. Longer term ARMs such as the 10 year ARM, still may be attractive for Jumbo loans.

Surprising March 2020 Real Estate Numbers
The New Jersey Association of Realtor recently released numbers for March:

3/19 3/20 % Change
New Listings: 18,073 12,956 -28.3%
Pending Sales: 10,907 9,691 -11.1%
Closed Sales: 85,41 8,114 -5.0%
Median Sales Price: $280,000 $312,000 +11.6%
Avg Sales Price: $335,768 $390,988 +9.9%
Days on Market 72 69 -4.2%
Homes for Sale 52,116 37,041 -28.9%
was very surprised to see the median and sales price increase. In fact, I have been monitoring NJ rates for the past 14 years or so and I can not recall such a huge jump. This clearly shows that there is still demand and the lack of supply has driven up prices. This is good news for sellers. There will be a supply increase in the coming months and it will be interesting to see how the market reacts. With interest rates as low as they are, prices can continue to climb. I am looking forward to see April and May numbers as this is historically the prime spring real estate market.

Stay Safe! .

Vibha Singh
CEO
732-648-1754
NMLS ID 66034

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2230 Route 206 Belle Mead, NJ 08502
Phone: (908) 359-2410 Rate Hot Line: (908) 420-3655 Fax: (908) 359-3929
Email: info@montmtg.com

Licensed Lender: Licensed by NJ Department of Banking and Insurance
© Montgomery Mortgage Solutions, Inc. All Rights Reserved. NMLS ID 19111

March Mortgage Newsletter

Coronavirus
The Coronavirus is the major concern of the day. It has been spreading all over the world. Each day the reports seem to be getting worse. Hopefully it will come under control and there will be a vaccine developed. Johns Hopkins has created a wonderful report that is very helpful to understand the Coronavirus.https://www.medpagetoday.com/infectiousdisease/publichealth/84698″

On March 3rd, the Federal Reserve had an emergency rate cut to Interest rates. There was a full .5% rate cut. To put in in perspective, in the entire year of 2019, there were three rate cuts totaling .75%. So .5% in an emergency situation is a good indication of the concerns of senior economists and policy makers.

Prior to the Coronavirus, forecasts were for interest rates to come down. Typically mortgage lenders forecast the economy and offer interest rates accordingly. We are currently at the lowest mortgage rates in the past 30 years, perhaps the lowest in history.

One of the key indicators of interest rates is the 10 year Treasury yield. We did see the lowest yield in history. Even if the 10 year note goes down, I don’t think interest rates will go down too much. There needs to be a spread between the mortgage rates and the 10 year note. In order for the 15 Year Mortgage rate to come down .125%, the 10 Year Note would have to go to .6% or so and I don’t think that will happen.

Holden Lewis of Nerd Wallet stated, “The Fed is catching up. Mortgages respond to market forces and not to the Fed. The Fed is actually following and not leading when it comes to mortgage rates.

We have an exceptional float down policy. If rates go down a full .25%, your loan is approved and within 10 days of closing, we will try to renegotiate your rate.

As always, our rates our .25% or so less then our competitors. We are one of the longest tenured lenders on the Zillow platform. Be sure to call us and get a quote. Not only are our rates lower, we routinely provide a “no lender fee” closing cost and have world class customer service. I look forward to hearing from you!.

A year ago, many economists predicted a recession in 2020. There has been some pull back and now the consensus seems to be that there will be no recession on 2020. Unemployment is still at all time lows. Consumer confidence (not associated with Coronavirus) seems to be strong. Lets hope for a continued balanced market. Win-win for both buyers and sellers.

Here are our current rates as of March 4th:
30 Year Fixed 3.125%
20 Year Fixed 2.75%
15 Year Fixed 2.500%
5 Year ARM 2.875%

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2230 Route 206 Belle Mead, NJ 08502
Phone: (908) 359-2410 Rate Hot Line: (908) 420-3655 Fax: (908) 359-3929
Email: info@montmtg.com

Licensed Lender: Licensed by NJ Department of Banking and Insurance
© Montgomery Mortgage Solutions, Inc. All Rights Reserved. NMLS ID 19111

January Mortgage Newsletter

Happy New Year! Best wishes to your loved ones and you.
FHA “Spot” Condo Approval
The Federal Housing Administration (FHA) has made a major change in policy that will allow a single unit condominium approval, instead of the entire condominium complex going through for fha approval. While the approval standards remain similar, this will make it much easier since previously it was a time consuming and lengthy process. Approvals were only good for 2 years and associations had to re-apply when an approval expired.

This is very significant since it add as many as 60,000 units that can be financed by FHA insured Mortgages. While there are 150,000 Condominiums in the USA, less the 7% are currently FHA approved.

This is great news for First Time Home Buyers. 84% of borrowers that purchase using an FHA insured mortgage are first time home buyers. Condominiums are also popular among Senior Citizens and Millennials. This will undoubtedly have a positive impact on Real Estate and is long overdue.

“Condominiums have increasingly become a source of affordable, sustainable homeownership for many families and it’s critical that FHA be there to help them,” said U.S. Housing and Urban Development Secretary Ben Carson. “Today, we take an important step to open more doors to homeownership for younger, first-time American buyers as well as seniors hoping to age-in-place.”

HUD Acting Deputy Secretary and FHA Commissioner Brian Montgomery added, “Today we are making certain FHA responds to what the market is telling us. This new rule allows FHA to meet its core mission to support eligible borrowers who are ready for homeownership and are most likely to enter the market with the purchase of a condominium.”

It will be interesting to see what impact this will have on loans guaranteed by US Department of Agriculture (USDA). The USDA has income restricted 100% financing without PMI. Much of NJ, PA and Florida have very large areas that are designated rural by USDA. In the past, their policy was the same as FHA and they followed FHA guidelines for Condo approvals.

Current Rates:
Our rates are exactly the same as we stated in our last 2 Newsletters.

30 Year Fixed Rate: 3.375%

FHA 30 Year Fixed: 2.75%

15 Year Fixed Rate: 2.875%

7 Year ARM: 3.25%

10 Year ARM: 3.375%

NJ State Real Estate Trends:
In 3 weeks or so, the New Jersey Association of Realtors will release year end reports for 2019. So in our February newsletter, we will have detailed year end numbers for you. Since we discussed FHA new condo policy, lets take a look at some stats for the Condo market segment in the State of NJ.

YTD 2018 YTD 2019 % Change
New Listings: 34,166 34,566 +1.2%
Closed Sales: 21,521 21,344 -.8%
Median Sales Price: $265,000 $275,000 +3.8%
Avg Sales Price: $342,521 $347,445 +1.4%
Days on Market 62 62 0.0%
These numbers are through the end of November and extremely well balanced. Good for both buyers and sellers. Nothing better then a “Win-Win”.
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2230 Route 206 Belle Mead, NJ 08502
Phone: (908) 359-2410 Rate Hot Line: (908) 420-3655 Fax: (908) 359-3929
Email: info@montmtg.com
Licensed Lender: Licensed by NJ Department of Banking and Insurance
© Montgomery Mortgage Solutions, Inc. All Rights Reserved. NMLS ID 19111

December Mortgage Newsletter

New Loan Limits
The Federal Housing Finance Agency (FHFA) recently announced the 2020 Conforming Loan Limits. We have started taking applications for closings in 2020 in accordance with the new loan limits. The new loan limits are very significant in New Jersey since there are many “high cost” areas in New Jersey including counties such as Somerset, Morris, Union, Middlesex, Essex and Bergen Counties.

Conforming Limits High-Cost Area
1 Unit $510,400 $765,600
2 Units $653,550 $980,325
3 Units $789,950 $1,184,925
4 Units $981,700 $1,472,550

Loan amounts in excess of the Conforming Limits are considered Jumbo mortgages and the rates are usually higher. In “High-cost” areas, there is another category that is commonly referred to as a “High Balance” or “Super Conforming” loan. High Balance Mortgages usually have a slightly higher rate then conforming rates and lower Jumbo rates.

Inflation Concerns
There seems to be concern that the GDP is not growing fast enough and this could result in a recession. Fed Chairman Jerome Powell stated that the Central Bank was committed to a 2% Inflation. This would indicate that there are no plans to raise rates in the near future. Despite three rate cuts in the past four months, growth has been significantly below 2%.

Current Rates:
Our rates are exactly the same as stated on our last Newsletter.
30 Year Fixed Rate: 3.375%
FHA 30 Year Fixed: 2.75%
15 Year Fixed Rate: 2.875%
7 Year ARM: 3.25%
10 Year ARM: 3.375%

Fannie Mae is forecasting rate stability and a possibility of lower rates expected in 2020. Perhaps we will see rates lower the 3% for the 30 year fixed.
NJ State Real Estate Trends:
The New Jersey Association of Realtors recently released reports for October. Lets take a look at New Jersey numbers:
YTD 2018 YTD 2019 % Change
New Listings: 162,023 161,098 -0.6%
Closed Sales: 100,503 103,776 +3.3%
Median Sales Price: $295,000 $310,000 +5.1%
Avg Sales Price: $371,187 $382,419 +3.0%
Days on Market 64 64 0.0%
Affordability Index 126 133 +5.6%
Certainly a well balanced market. Doesn’t appear to be a bubble in New Jersey.

Follow Us
2230 Route 206 Belle Mead, NJ 08502
Phone: (908) 359-2410 Rate Hot Line: (908) 420-3655 Fax: (908) 359-3929
Email: info@montmtg.com
Licensed Lender: Licensed by NJ Department of Banking and Insurance
© Montgomery Mortgage Solutions, Inc. All Rights Reserved. NMLS ID 19111

November Mortgage Newsletter

November Mortgage Newsletter

Fed Lowers Rate
On Wednesday October 28th, the fed lowered the short-term interest rate by .25%. This was the 3rd time in 2019 the rate was lowered .25%. The rate is now hovering between 1.5% and 1.75%. The US economy is slowing due to weak global growth and trade disputes.

Federal Reserve Chairman Jerome Powell implied that rates would not be lowered in the coming months since the current rate is “likely to remain appropriate”. This is due to the Fed’s outlook of economic growth and strong employment numbers.

President Donald Trump continues to be critical of the Fed stating the rates should be lower than they are at this time. He has gone as far as saying Powell is a bigger economic enemy than Chinese President Xi Jinping.

Market Crash
Michael Pento of Pento Portfolio Strategies is predicting a recession. “When this thing implodes, we are all screwed. On a Global Scale, we have never created such a magnificent bubble. These central Bankers are clueless and they have proven that beyond a doubt. All they can do is try to keep the bubble going.”

In the last recession, Ben Bernanke was Fed Chair, Quantitative Easing (QE) was introduced. Pento comments regarding the present activity, “Its not QE, its QE on steroids. Everybody knows that this QE is permanent just like any banana republic would do, or has done.”

Rates Continue Volatility
In the past few weeks our rates have been in the range of 3.375% and 3.75%. There are some that are suggesting rates will go under 3%. This is the first I am hearing about a sub 3% rate. That could take some time if it happens at all. In any case, rates are incredibly low and it’s a great time to purchase and refinance. Those that are exploring their refinance options, you may want to consider a shorter term and go from a 30 year to a 20 year or even a 15 year. I will be happy discuss what is best for you.

Current Rates:
30 Year Fixed Rate: 3.375%

FHA 30 Year Fixed: 2.75%

15 Year Fixed Rate: 2.875%

7 Year ARM: 3.25%

10 Year ARM: 3.375%

The rates are still very favorable as we head into the end of the year. Still a great time to be a buyer.

Trends by Market Segment:
The New Jersey Association of Realtors recently released reports for September. Lets take a look at the Single Family Market Segment:

YTD 2018 YTD 2019 % Change
New Listings: 107,521 105,995 -1.4%
Closed Sales: 63,380 62,795 -.9%
Median Sales Price: $315,000 $330,000 +4.8%
Avg Sales Price: $394,695 $406,734 +3.1%
Days on Market 63 63 0.0%
Affordability Index 130 125 -3.8%
Certainly nothing is alarming. If anything, it is a very healthy, well balanced market. Here is data for Condos/Townhouses:

YTD 2018 YTD 2019 % Change
New Listings: 29,470 29,596 +.4%
Closed Sales: 18,248 17,459 -4.3%
Median Sales Price: $260,000 $274,900 +5.7%
Avg Sales Price: $333,106 $345,176 +3.6%
Days on Market 62 62 0.0%
Affordability Index 157 150 -4.5%
Similar to Single Family homes, the Condo/Townhouse market is well balanced. Here are the senior housing numbers:

YTD 2018 YTD 2019 % Change
New Listings: 7,958 8,816 +10.8%
Closed Sales: 5,643 5,768 +2.2%
Median Sales Price: $200,000 $207,000 +3.5%
Avg Sales Price: $230,722 $228,586 -.9%
Days on Market 63 68 +7.9%
Affordability Index 210 203 -3.3%
All 3 market segments are well balanced. I have data for specific townships and would be happy to provide the information upon request. Let me know and I can forward it to you.

Vibha Singh

CEO

732-648-1754

NMLS ID 66034

Follow Us

2230 Route 206 Belle Mead, NJ 08502
Phone: (908) 359-2410 Rate Hot Line: (908) 420-3655 Fax: (908) 359-3929
Email: info@montmtg.com

Licensed Lender: Licensed by NJ Department of Banking and Insurance
© Montgomery Mortgage Solutions, Inc. All Rights Reserved. NMLS ID 19111

October Mortgage Newsletter

October Mortgage Newsletter

Rates Volatile
We have been seeing big swings in mortgage rates. The 30 year fixed rate got up to nearly 4% and it has come back down approaching close to 3.5%. The rates have been changing quickly whenever there is good or bad economic news. For example, there is a slowdown in manufacturing and the rates have been trending downward.

The key economic indicators have been mixed. Many are predicting an economic slowdown that will continue to drive mortgage rates lower. The unemployment rate is still very favorable. For the 3rd month in a row, in August the rate was an amazing 3.7%.

Most Real Estate Agents I speak with in the Central and Northern New Jersey markets have had a good year. Many are saying that a “shift” in the market is due. So, signals are mixed.

Properties Requiring Repairs
We have an array of products for properties that require repairs. We have programs for both owner occupied borrowers and investors. In both cases, we can provide financing for the purchase price as well as the cost of the repairs.

For owner occupants, rates are very low and the down payment requirement is as low as 3.5% with 100% financing for the cost of the repairs. The repairs can be as small as simple cosmetic or they can be large structural repairs and even septic replacements can be financed.

Whether you are a first-time investor or a seasoned investor, we have plenty of programs. You can finance as much as 90% of the purchase price and 90% of the cost of the repairs. We even have no income verification programs. So, there is a lot of flexibility.

Whether you are an investor or owner occupant, please call me to discuss the various different programs and the program that would be best for you.

Current Rates:
30 Year Fixed Rate: 3.375%

FHA 30 Year Fixed: 2.750%

15 Year Fixed Rate: 2.750%

7 Year ARM: 3.250%

10 Year ARM: 3.375%

The rates are still very favorable as we head into the last quarter of the year. Still a great time to be a buyer.

New Jersey Real Estate Trends:
The New Jersey Association of Realtors recently released reports for August. Here are some numbers for New Jersey:

YTD 2018 YTD 2019 % Change
New Listings: 96,822 95,192 -1.7%
Closed Sales: 59,505 55,784 -1.7%
Median Sales Price: $315,000 $329,000 +4.4%
Avg Sales Price: $394,417 $406,644 +3.1%
Days on Market 64 64 0.0%
Affordability Index 130 125 -3.8%
Certainly nothing is alarming. If anything, it is a very healthy, well balanced market.

Vibha Singh

CEO

732-648-1754

NMLS ID 66034

Follow Us

2230 Route 206 Belle Mead, NJ 08502
Phone: (908) 359-2410 Rate Hot Line: (908) 420-3655 Fax: (908) 359-3929
Email: info@montmtg.com

Licensed Lender: Licensed by NJ Department of Banking and Insurance
© Montgomery Mortgage Solutions, Inc. All Rights Reserved. NMLS ID 19111

September Mortgage Newsletter

September Mortgage Newsletter

Rates Trending Down
The Federal Open Market Committee (FOMC) led by Chairman Jerome Powell will be meeting on September 17-18. Predictions are for another rate cut of .25% after a recent rate cut on July 31st which was the first rate cut since December of 2008. This will have an immediate impact on borrowers that have interest rates indexed to prime such as commercial loan borrowers. As I have mentioned in the past, the prime rate does not necessarily have an immediate impact on Mortgage rates.

I have always felt 2 of the most important indicators for the Fed to consider are unemployment rates and inflation. Unemployment is near an all time low and inflation is in check. It seems that the global economy and the Trade war with China has made the Fed proactive in decreasing interest rates.

The first set of US Tariff’s on Chinese goods went into effect On Friday, September 1.US exports many products to China that will be hit with tariffs including Farm products such as Soya. US Farmers are the largest exporters in the world of Soya to China. The trade war will have a negative impact on our Farmers. Let’s hope the matter is amicably resolved soon.

Mortgage Rates Trending Down
Even though the 30 year fixed rate is at an amazingly low rate of 3.5%, rates are actually trending down! A strong indicator for mortgage rates is the 10 Year Treasury Note. The 10 Year note is near all time historical lows. We will most likely see rates at 3.375%, perhaps even lower.

As always, our rates our 1/8 to ¼ percent lower than many of our competitors. Here are our current rates:

30 Year Fixed Rate: 3.5%

FHA 30 Year Fixed: 2.875%

15 Year Fixed Rate: 3%

7 Year ARM: 3.5%

10 Year ARM: 3.75%

Real Estate Trends
The New Jersey Association of Realtors recently released the final stats through the end of July. Let’s take a look at some numbers for Single Family Homes in Central New Jersey which is a good snap shot for similar markets around the state.

2018 2019 Percent Change
New Listings 3,273 3,172 -3.1%
Closed Sales 1,709 1,656 -3.1%
Median Sales Price $472,400 $465,000 -1.6%
Days on Market 62 65 +4.8%
The above numbers are clearly a result of a healthy Real Estate Market. Since the last recession, there has not been a steep increase in prices in the state of New Jersey. While there is always room for correction, there doesn’t appear to be a chance for a “bubble” or a drastic reduction in Real Estate prices. With interest rates near all time lows and a healthy balanced market, this is a good time to buy or sell. A “win-win” for all.

Home Buyer Seminars
Good news, we will be sponsoring the popular Home Buyer Seminars facilitated by Central Jersey Real Estate Institute. You can find more information regarding the upcoming seminars including registration at www.HomeBuyer-Seminar.com. All attendees will receive a $1,000 closing cost coupon, a home buying workbook and free lunch. There were many speakers including a Title Insurance Attorney, Credit Reporting specialist, Foreclosure expert, short sales expert and myself. Be sure to check out video of previous seminars at www.HomeBuyer-Seminar.com . We would love to see you there. Feel free to invite your family and friends. Its not just for first time home buyers. Many participants that have previously purchased homes in the past find it helpful and recommend it to others that have already purchased a home and looking to purchase another in the future.

Vibha Singh

CEO

732-648-1754

NMLS ID 66034

Follow Us

2230 Route 206 Belle Mead, NJ 08502
Phone: (908) 359-2410 Rate Hot Line: (908) 420-3655 Fax: (908) 359-3929
Email: info@montmtg.com

Licensed Lender: Licensed by NJ Department of Banking and Insurance
© Montgomery Mortgage Solutions, Inc. All Rights Reserved. NMLS ID 19111

August Mortgage Newsletter

August Mortgage Newsletter
Fed Cuts Rate By .25%
On July 31st, the Federal Open Market Committee lowered the overnight lending rate by .25%. This was the
first rate cut since December of 2008. The global economy and flat inflation were cited as reasons for the rate
cut. Forecasts are for another rate cut by the end of the year.
While the Fed determines the overnight lending rate, Mortgage rates are not directly set by the Fed. The 10
year Treasury Note is a good indicator for Mortgage rates and is market driven similar to Mortgage rates.
Prior to the Fed announcement, many analysts had predicted the rate cut and therefore, the market had already
adjusted to the predicted rate cut.
President Trump has been critical of the Fed policy and welcomes the rate cut so the economy can continue
to grow, and unemployment to stay low. He continues to press for more rate cuts even though unemployment
is near all time lows at 3.7%. A bigger problem could be the predicted economic slow down due to the Trade War.
Rates are approaching all-time lows. Here are our current rates:
30 Year Fixed Rate: 3.5%
FHA 30 Year Fixed: 2.875%
15 Year Fixed Rate: 3%
10 and 7 Year ARM: 3.5%
The lowest 30 Year Fixed I can recall closing was 3.25% and that was several years ago. Recently I did close
a transaction at 3.375%. Rates hovering around .25% within the lowest in the history is a pretty amazing rate.
Sometimes I get calls of those that want to wait to see if the rates will come down. It is always my
recommendation to lock in rates and if there is an improvement of .25%, we can do a float down of .125%. We have one of the best float down policies in the industry.
Since interest rates have come down significantly, I have been getting more questions regarding lower term
mortgage rates. Here is an illustration for a $300,000 mortgage and payments at current rates made during the
term of a loan.
$300,000 Loan Amount Monthly Payment
(Principal and Interest)
Total Payments Made
30 Year Fixed@ 3.5% $1,347.13 $484,966.80
20 Year Fixed@ 3.375% $1,720.67 $412,960.80
15 Year Fixed@ 3.0% $2,071.74 $372,913.20
As you can see, there is a significant amount of saving by lowering the term of your mortgage. While it may
seem like a large difference in payment, it is not uncommon for household income to increase during the
duration of a mortgage. If you already have a mortgage, it may be a good time for you to consider refinancing.
Depending upon your loan amount, as little as .5% will amount to enough savings to justify closing expenses
associated with a refinance.
Sometimes there are pricing anomalies. With interest rates so low, it may make sense to pay a point. If your
rate is a .25% lower by paying a point, it may be worth it, particularly if you are going for a shorter term
mortgage. Please feel free to discuss this with me since everyone has unique needs.
Vibha Singh
CEO
732-648-1754
NMLS ID 66034
Follow Us
2230 Route 206 Belle Mead, NJ 08502
Phone: (908) 359-2410 Rate Hot Line: (908) 420-3655 Fax: (908) 359-3929
Email: info@montmtg.com
Licensed Lender: Licensed by NJ Department of Banking and Insurance
© Montgomery Mortgage Solutions, Inc. All Rights Reserved. NMLS ID 19111

July Mortgage Newsletter

July Mortgage Newsletter
Applications Increasing for Both Purchases and Refinances
Concern of an Economic slowdown continues to drive rates lower. Refinance applications are increasing
significantly. I am often asked how much of a decline in rates is required for it to make sense to refinance. This
depends upon what the cost is to refinance and how much you will be saving. For smaller loan amounts under
$200K, the rate should decline .75% or more. For larger loan amounts, .5% is enough. For some cases, we have
programs that will provide the lower rate and keep the same number of payments you have left. For example, if
you have had your loan for 2 years, we can provide a lower rate and give you a 28 year term.
Another consideration is to lower your term from 30 Years to 20 or even 15 years. You can save a significant
amount of interest lowering the term of your loan.
This is a great time to consolidate first and second mortgages or even refinance an ARM. Please don’t hesitate
to call me to discuss whether it makes sense for you to refinance.
Steep Decline in Mortgage Rates Last 6 months
Last month our rates dipped under 4% for the first time in over year. In December of 2018, we were
approaching 5%. Here is the decline in the 30 Year Fixed Rate the past few months:
Month Rate Decrease
Current 3.625% .25%
June 3.875% .125%
May 4.0% —
April 4.0% .25%
March 4.25% —
January and February 4.25% -.25%
Dec 2018 4.5% —
In the past 6 months or so, we have seen a decrease of over 1%. I don’t think anyone forecasted such a steep
decline in rates. Our 30 Year fixed rate was as low as 3.375% in June and 15 year fixed was at 2.875%. This is
very close to all time historical lows. Here is a listing of rates of several programs:
Conventional 30 Year Fixed 3.625%APR
Conventional 15 Year Fixed 3.0% APR
FHA 30 Year Fixed 3.0%
10 Year ARM 3.625%
7 Year ARM 3.625%
The 30 Year Fixed, 7 Year ARM and 10 Year ARM at the same rate. This is an anomaly and absolutely a great
time to get a 30 Year Fixed. The 15 year fixed is .625% less then a 30 Year Fixed. This is also an anomaly.
The New Jersey Association of Realtors recently published Real Estate market data through the end of May.
Here is some information regarding Central Jersey which is indicative of the overall activity of the state of NJ.
Data is available through 5 months of the year. Lets take a look at the median prices:
Median Prices YTD 2018 YTD 2019 %+/-
Single Family Homes $439,323 $428,250 -2.5
Condo/Townhouse $266,000 $265,000 -.04
Adult Community $449,000 $407,550 -9.2
The above figures are all based upon closed volume and most of these transactions went under contract prior to
the sharp decline in rates. We will see big changes in these numbers for July and August closings. Those
numbers will be available in the September and October Newsletter. By year end, the market will be balanced.
This is a great time for both Buyers and Sellers.
Vibha Singh
CEO
732-648-1754
NMLS ID 66034
Follow Us
2230 Route 206 Belle Mead, NJ 08502
Phone: (908) 359-2410 Rate Hot Line: (908) 420-3655 Fax: (908) 359-3929
Email: info@montmtg.com
Licensed Lender: Licensed by NJ Department of Banking and Insurance
© Montgomery Mortgage Solutions, Inc. All Rights Reserved. NMLS ID 19111

June Mortgage Newsletter

June Mortgage Newsletter

Global Recession!
There is concern that the tariff war with China could induce a global recession. Chetan Ahya, Morgan Stanley’s Chief Economist, “If talks stall, no deal is agreed upon and the U.S. imposes 25% tariffs on the remaining $300 billion of imports from China, we see the global economy heading towards recession.”

Ahya is predicting the Fed would bring rates all the way down to zero within the next year or so. Although lower interest rates would be wonderful for both businesses and consumers, no one wants it at the cost of a global recession. The consequences could be disastrous.

Earlier this month the Fed did not increase interest rates. President Trump is looking for a full percent cut of the discount rate. Atlanta Federal Reserve Bank President Bostic has stated that he can see it going either way depending upon if a trade agreement is finalized.

Mortgage Rates Trending Down
Our 30 Year Fixed rate is below 4% for the first time in over a year. Some of our rates are down .25%. Below are our current rates and the amount of decrease from last month.

Conventional 30 Year Fixed 3.875%APR; Down .125%

Conventional 15 Year Fixed 3.25% APR; Down .25%

FHA 30 Year Fixed 3.25%; Down .25%

10 Year ARM 3.875%; Down .25%

7 Year ARM 3.75%; Down .125%

The 15 Year Fixed rate is only 3.25%! If you are considering refinancing, be sure to get a quote for a 15 year fixed. Not only will you pay a much lower interest rate, you can save Thousands of dollars in interest.

The New Jersey Association of Realtors recently published Real Estate market data through the end of April.
New Jersey YTD 2018 YTD 2019 %+/-
New Listings 63,901 66,557 +4.2%
Pending Sales 38,622 40,105 +3.8%
Closed Sales 31,645 31,256 -1.2%
Median Sales Price $271,000 $281,500 s+3.9%
Average Sales Price $348,274 $$356,082 +2.2%
Days on Market 72 73 +1.4%
Affordability Index 150 146 -2.7%
Note the large increase in median price. Its interesting that affordability decreased by only 2.7% and the median price went up 3.9%. This is due to increases in wages and a decrease in interest rates. If interest rates continue to fall, that could fuel a sharp increase in prices. This is a good time for buyers to purchase.

Vibha Singh

CEO

732-648-1754

NMLS ID 66034

Follow Us

2230 Route 206 Belle Mead, NJ 08502
Phone: (908) 359-2410 Rate Hot Line: (908) 420-3655 Fax: (908) 359-3929
Email: info@montmtg.com

Licensed Lender: Licensed by NJ Department of Banking and Insurance
© Montgomery Mortgage Solutions, Inc. All Rights Reserved. NMLS ID 19111

May Mortgage Newsletter

May Mortgage Newsletter

Economic Growth
The first quarter numbers are in for the economy and according the Bureau of Economic Analysis, the Gross Domestic Product grew by 3.2%. The Dow Jones poll of Economists had the forecasted growth at 2.5%. This was the first time since 2015 that the first quarter GDP exceeded 3%. Keep in mind, at the beginning of the year, we had a lengthy Government shut down that lasted more than a month.

Unemployment numbers are the lowest they have been since September of 1969. Unemployment is at 3.7% and predictions are that they will continue to decrease. Good unemployment contributes to positive consumer confidence.

There continue to be suggestions of a slowdown in the economy and there are those that feel there may be a bubble. I don’t see it, especially in the state of New Jersey. The growth has been at a healthy pace particularly in the Real Estate Market.

There seems to be an increase in inventory of higher priced homes. Perhaps this is the immediate effect of the changes in the Income tax rules. Although I don’t have a formal study, a quick look at our closed pipeline and there are less H-1 loan applicants. This could be due to the uncertainty of immigration rule changes on the horizon.

Our 30 Year Fixed rate is the same as it was a month ago.

Conventional 30 Year Fixed 4.0% APR

Conventional 15 Year Fixed 3.5% APR

FHA 30 Year Fixed 3.5%

10 Year ARM 4.125%

7 Year ARM 4.0%

I was perusing historical interest rates published by Freddie Mac. The lowest rates we have had in the past several decades were the week ending 11/21/2012 and the 30 year fixed rate was 3.31%. Week ending October 15, 2018, the rate was at 4.94%. Week ending March 28, 2019, the rate was 4.06%. Its pretty amazing that interest rates are within ¾% of the all time low. That’s phenomenal and wonderful news for Home Buyers and sellers.

Vibha Singh

CEO

732-648-1748

NMLS ID 66034

April Mortgage Newsletter

April Mortgage Newsletter

Rates Are Declining!
It is not uncommon for interest rates to decline when there is a slow down in the economy. Many are predicting the economy will lose momentum. So rates are now trending downward. That should result in an increase in property values. The lower interest rates should improve affordability.

Real Estate Analytics Company Corelogic is predicting a 5% annual increase in prices through 2020. Frank Nothaft Chief Economist at Corelogic, “During the first two months of the year, home-price growth continued to decelerate. This is the opposite of what we saw the last two years when price growth accelerated early. With the Federal Reserve’s announcement to keep short-term interest rates where they are for the rest of the year, we expect mortgage rates to remain low and be a boost for the spring buying season. A strong buying season could lead to a pickup in home-price growth later this year.”

Frank Martell, President and CEO of CoreLogic, “We expect the percentage to grow over the remainder of 2019. The cost of either buying or renting in expensive markets puts a significant strain on most consumers. Our research tells us that about 74 percent of millennials, the single largest cohort of homebuyers, now report having to cut back on other categories of spending to afford their housing costs.”

There is so much chatter regarding a significant slowdown in First Quarter of 2020. I have been writing this Newsletter pretty consistently during the past few years. It seems to me that the New Jersey Real Estate market has had a healthy and steady growth. I would be surprised if there was a bubble in NJ Real Estate. The appreciation has been approximately 3+/- percent per year and in some areas, even less.

Our 30 Year Fixed rate surprisingly hit 3.875% and this is a significant decrease during the last month.

Conventional 30 Year Fixed 4.0% APR

Conventional 15 Year Fixed 3.375% APR

FHA 30 Year Fixed 3.5%

10 Year ARM 4.125%

7 Year ARM 4.0%

Next month we will be provide numbers for the first quarter and we will also take a look at the Condo Market.

Vibha Singh

CEO

732-648-1748

NMLS ID 66034

March Mortgage Newsletter

March Mortgage Newsletter

Great New No Income Verification and Renovation Mortgage Program!
We have an awesome new program for both Owner Occupied Homebuyers and Investors that are looking to purchase a property that needs renovation or a new construction loan. It is a true no Income Verification program that takes some of the hassle out of what can be a cumbersome process for renovation loans.

There is a need for innovative programs that facilitate purchasing properties that need renovation. The program offers 90% financing (10% Down payment) for the purchase of the property and 90% of the cost of renovation. A minimum of 620 Credit score is required. While there are many programs for owner occupied homebuyers such as the 203 (K) loan, this new program is unique since it is a true No Income Verification program. Please call me for more information or to see if you qualify.

For those that are looking to construct a new single family home on land, 25% down payment is required for purchasing of the lot and 90% of the construction cost can be financed. Again, no income verification is required.

In the last week or so, we had a considerable jump of almost .25% in mortgage interest rates. The trend of volatility in mortgage rates continues. Although our rates are consistently .25% to .375% lower than our competitors, our rates are up .25% since the February Newsletter.

Conventional 30 Year Fixed 4.25 % APR

Conventional 15 Year Fixed 3.75% APR

FHA 30 Year Fixed 3.625%

10 Year ARM 4.125%

7 Year ARM 4.125%%

Our 30 Year rate is up .25% and the 7 ARM and 30 Year Fixed are the same. This is unusual. It is also unusual for the 30 Year Fixed to increase .25% and the ARMs increase .5%. There is only .125% difference between the ARM and Fixed rate. This is also very unusual. The 30 Year fixed is certainly a better value than the ARMs.

Joel Kan of the Mortgage Bankers Association’s announced the U.S. homeownership rate increased 64.8% in the fourth quarter of 2018. This is the highest rate since 2014. This is good news and an indication that many of the forecloses have been absorbed by the market.

Fed Chairman Jerome Powell recently testified on Capitol Hill regarding the economy. Mixed signals were sent regarding future interest rates. While the mandate is for future increases, they may become less frequent and stabilization. Some are even suggesting decreasing the rate.

Numbers are in for January from the New Jersey Association of Realtors:
New Jersey 1- 2018 1-2019 % Change
New Listings 13,270 14,347 +8.1%
Pending Sales 7,519 8,078 +7.4%
Closed Sales 7,320 7,012 -4.2%
Median Sales Price $271,000 $285,000 +5.2%
Average Sales Price $349,410 $56,255 +2.0%
Days on Market 73 73 0.0%
Affordability Index 153 144 -5.9%
This is a very interesting start to the year and great to build momentum for the spring market. The number that sticks out is Closed sales of negative 4.2%. While this may be alarming, there was a lack of inventory and interest rates were significantly higher in December. A huge increase in new listings and pending sales should bring up the closed sales number in the future. Median Price is up +5.2% and let’s see how the increase in inventory will effect this number. Affordability continues to decrease and that is a result of the increase in prices. New Jersey remains a well-balanced market good for both buyers and sellers.

Vibha Singh

CEO

732-648-1754

NMLS ID 66034

Follow Us

2230 Route 206 Belle Mead, NJ 08502
Phone: (908) 359-2410 Rate Hot Line: (908) 420-3655 Fax: (908) 359-3929
Email: info@montmtg.com

Licensed Lender: Licensed by NJ Department of Banking and Insurance
© Montgomery Mortgage Solutions, Inc. All Rights Reserved. NMLS ID 19111

February Mortgage Newsletter

February Mortgage Newsletter

Since the final numbers are out, in this Newsletter I will be presenting important information regarding 2018 Mortgage and Real Estate data. This should provide an insight to future market trends.

Market Volatility Relation to Mortgage Rates
2018 was a year of volatility and one of the worst performances for the stock market in the past decade. Although a record setting year in October and the volatility throughout the year, it is one that perhaps Investors would not look back on fondly. At the end of the year, the S&P 500 was down 6.2% and the Dow was down 5.6%. This was only the second time in the past decade both the Dow and S&P were down. In 2015 they were both slightly down and the NASDAQ was up that year. The 2018 Year ended horribly. In December the Dow was down 8.7% and the S&P 500 was down 9%. This was the biggest decrease since 1937.

This was record setting volatility. In the history of the Dow, there have only been 8 times that the Dow has swung 1,000 or more in a single session. Incredibly 5 of the 8 times took place in 2018. Undoubtedly volatility is due to instability, fear, economic slowdown, inflation worries and political uncertainty.

The volatility in the Stock market was reflected in Mortgage rates. It is not uncommon for Mortgage rates to decline when the Stock market declines. This is typically due to investors investing in bonds that are safer as opposed to Stocks. So the decrease in the Stock market has had a positive effect on rates.

In our last newsletter, our 30 Year Fixed rates were down .375%. Our rate continued to go down .125% in the month of January. This is great news for buyers as we head into the spring market. There is now talk of rates going under 4%. I certainly hope so. Although this time of year is traditionally slow, this year seems particularly slower than usual. Here are our current rates:

Conventional 30 Year Fixed 4.0% APR

Conventional 15 Year Fixed 3.375% APR

FHA 30 Year Fixed 3.375%

10 Year ARM 3.875%

7 Year ARM 3.75%

Interestingly, although our 30 Year Fixed is down .125%, our 7 Year ARM and 10 Year ARM is up .125%. Currently there just is not enough difference between ARMS and Fixed Rates to opt for an ARM. When rates were approaching 5, there was enough of a spread and people had started seriously considering ARMs.

Here are the final year end numbers for the State of New Jersey as reported by NJAR.
New Jersey YTD 2017 YTD 2018 % Change
New Listings 181.007 183,156 +1.2%
Pending Sales 117,584 117,192 -0.3%
Closed Sales 117,704 117,004 -0.6%
Median Sales Price $280,000 $290,000 +3.6%
Average Sales Price $358,225 $368,607 +2.9%
Days on Market 71 65 -8.5%
Affordability Index 154 141 -8.4%
In every Newsletter for 2018, I stated that the market was stable. The yearend numbers are well balanced. It’s a healthy real estate market in New Jersey. The only number that sticks out a little is the affordability Index and that has gotten better with interest rates going down.

There is evidence that there will be an increase in housing Inventory in 2019. It that does happen, it will have a negative impact on price. The 4 interest rate hikes by the Fed in 2018 didn’t help the stock market. The fed has said they will increase rates 2 times this year. Let’s see how that plays out and how that effects mortgage rates.

I have access to Real Estate data for each township in New Jersey. Let me know if you would like to see market trends similar to the above data. This is very important information and I will be happy to share it with you. I work with many professional Real Estate agents across NJ as well as Attorneys, Home Inspectors and other professionals. If you need a referral, I will be happy to provide one.

Vibha Singh

CEO

732-648-1748

NMLS ID 66034

Follow Us

2230 Route 206 Belle Mead, NJ 08502
Phone: (908) 359-2410 Rate Hot Line: (908) 420-3655 Fax: (908) 359-3929
Email: info@montmtg.com

Licensed Lender: Licensed by NJ Department of Banking and Insurance
© Montgomery Mortgage Solutions, Inc. All Rights Reserved. NMLS ID 19111