Maine Home Mortgage Loans
Refinance and Equity Tips
With the bad economic news, the Fed promised to keep the mortgage rates where they are and that was good news for people buying homes in Maines, Vermont and Delaware. The Commerce Department reported that the nationwide median price for a new home sold in September was $217,100, a drop of 9.7 percent from September 2015. It was the lowest median price for a new home since September 2014 and the sharpest year-over-year decline since December 1970.
While the price decline for new homes helped sales pick up by 5.3 percent in areas across the nation, sales of existing homes in Maine fell by double digits in September, according to monthly figures compiled by the Maine Real Estate Information System, Inc. Prices also declined in Maine, but not as much as national averages. The statewide median price fell 1.34 percent, to $192,000, compared with $194,600 in September of 2005.
The Federal Reserve, recognizing the flattening housing market, halted a two-year string of interest rate increases in August and left rates unchanged for a third straight meeting on Wednesday. The rise in sales last month was led by a 23.9 percent jump in the West. Sales were also up 6.9 percent in the South. However, sales were down by 6.3 percent in the Mid-West and fell by 34.5 percent in the Northeast.
With activity picking up overall nationwide, they are bound to start rebounding in Maine and other Northeastern areas. So, now may be time to consider home buying in Portland, Bangor and other thriving cities or financing a second home in Maine, before prices start increasing again.
While the median price for a home in Maine is less than $200,000, there are luxury homes along the coast and other popular destinations that could warrant the need for a jumbo home loan. Even if you buy a home around the median price, you'll need nearly $40,000 for the 20% down payment or you'll be paying expensive private mortgage insurance (PMI) that benefits no one but the lender.
If you lack the cash reserves for a 20% down payment, the best way around PMI is a 100% 1st mortgage, also known as a no money down home loan or 80-20 home mortgage due to the typical arrangement of securing a first mortgage loan to cover 80% of the purchase price and a piggyback second mortgage for the 20% balance. With interest rates being low for probably the rest of the year, it's best to get a fixed interest rate loan rather than having to worry about rate hikes with adjustable rate mortgages (ARMs) or the risks of interest only loans.