Many buyers have delayed purchasing their Cape Cod home while waiting for the proverbial “bottom”.  This is understandable given what has happened to the market since 2006.  But while waiting for the bottom (which the majority of experts believe has already occurred), don’t ignore the other major factor impacting your monthly mortgage payment — your mortgage interest rate.  If you’re buying your Cape Cod home for the long term, missing today’s low interest rates could have a far greater impact on your finances than misjudging the “bottom” and paying a few extra thousand dollars for the home.

Consider a buyer who just purchased a $350,000 home with 20% down and scored one of the record-low, 30-year fixed interest rates from a few weeks ago of 3.25%.  Her monthly payment (principle and interest) would be $1218.58.  If the interest rate were 4.25%, which they were just a year ago, her monthly payment would be $1377.43, a difference of $158.85.  This doesn’t sound like much, but it’s close to $2000 per year and almost $60,000 over the life of the loan.  If the buyer had “misjudged” the bottom and paid an extra $10,000 for the home but got the lower interest rate, her monthly mortgage would be $1253.39 – over $120 less than if she had paid LESS for the home, but at the higher interest rate.   Her annual savings would still be nearly $1500 per year.

So if and while you’re waiting on ”the bottom”, don’t forget to keep an eye on the interest rates.  They’ve been creeping up slowly and it doesn’t take much to make a palpable difference in your monthly payment.

For more advice on mortgages, contact Eric Risley at MSA Mortgage – Cape Cod.  If you’re ready to start looking at Cape Cod homes for sale, please contact me anytime at (508) 259-8379 or by email at Marie@BuyOnTheCape.com.  I’d welcome the opportunity to personally assist you.

Marie

Many buyers of Cape Cod homes do not live in Massachusetts and are therefore unfamiliar with our closing process.  In many states, lawyers are not even involved in the closing process whereas in Massachusetts, a lawyer is actually REQUIRED to preside over real estate closings involving a mortgage.  So what exactly does the closing attorney do?  Here’s a brief summary:

• Orders a municipal lien certificate to verify the status of all real estate taxes and other municipal charges applied to the property.
• Orders payoff of any and all mortgages applied to the property.
• Examines the title to the property going back 50 years for all new purchases, and works with all involved parties to resolve any title defects.
• Provides buyer with certification of title.
• Arranges for the issuance of title insurance for both the lender and the buyer.  (Most lawyers strongly recommend that buyers obtain their own title insurance policies to prevent trouble down the road.)
• Works closely with the lender to prepare the buyer for the closing day by ensuring that the mortgage, promissory note, truth in lending disclosure, and HUD-1 Settlement Statement are ready and accurate.
• Works closely with the seller’s attorney and REALTORs to obtain the deed to the property, the final utility bills, the smoke detector/CO2 certificate, Title V septic certification, and 6(d) condominium certificate (if appropriate).
• Oversees a number of issues at the actual closing, including payoff of mortgages, real estate taxes, utilities, and REALTOR commissions, proper funding of escrow accounts, proper distribution of sale proceeds, and more.

If there will be a mortgage on the home, it is usually recommended that the buyer speak to the lender about using his/her own attorney to represent both the lender and the buyer.  This saves the buyer from paying for TWO sets of legal fees, since the lender will of course charge the buyer for its legal fees associated with the loan.

If you’re looking to purchase a home on the Cape (or anywhere else in Massachusetts!), be sure to get a local attorney involved early.  In addition to the closing process described above, your attorney also needs to be involved with the drafting of the Purchase and Sales agreement to be sure your interests and rights are fully protected.  For more information about the legal side of buying a home on Cape Cod, contact local attorney William Hammatt at wrhammatt@verizon.net.

Marie

When searching the MLS for Cape Cod homes for sale, you’ll frequently encounter references to something known in Massachusetts as “Title V”, a state regulation pertaining to septic systems. Many buyers of Cape Cod homes live off-Cape in metropolitan areas such as Boston and New York City and are unfamiliar with septic systems. If you are one of these people, here’s a brief summary of what you need to know when buying a home on Cape Cod:

• Most, but not all homes on the Cape have septic or cesspool systems, and require inspection when changing ownership.  In most towns, cesspools must be replaced with septic systems when a property is sold.
• Inspections should be done by a town-approved septic inspector. The seller typically pays this cost (roughly $350), although that is not a rule.
• If the system passes, the homeowner is issued a Title V certificate by the town that is good for 2 years. If the home is sold again in 2.5 years, another inspection must take place.
• If the system fails, a new septic system may need to be installed. This typically costs in the neighborhood of ten thousand dollars, but could run as high as fifty thousand dollars, depending on a variety of factors.
• Financial assistance, in the form of low interest rate loans, is available to help homeowners finance the cost of a new septic system.

For more information on Title V, click here.

For more information on Title V financing assistance, click here.

Marie

If the home you’re looking to buy on Cape Cod is going to be used for investment purposes, be sure you’ve left no stone unturned when it comes to rental property tax deductions!  Home improvements, depreciation, travel costs, association fees.  These are just a few of the expenses that are deductible with investment property yet not on your primary home.  Hence, you may not be familiar with them if you are a new investment property owner.

But be careful because the rules can be tricky and some deductions may be limited based on your income.  To be sure you’re taking every deduction to which you’re entitled and none of those to which you are not, be sure to consult your tax preparer.   If you don’t have one and you own or plan to own investment property, you’d be wise to consult one.  Robinson Financial Solutions in Brewster can assist you with all your tax and financial planning needs.  And best of all, the cost of having them prepare your Schedule E is most likely deductible!

Marie

Over the past week the number of buyers registering on my website has nearly TRIPLED the normal rate.  And it’s really no surprise.  Both prices and mortgage rates remain at surprisingly low levels while the economy is showing signs of improvement.  A housing recovery has already been declared in many areas while other areas, including the Cape, have at the very least remained sustainably stable. 

So what does this all mean for Cape buyers?  Well for one thing, if you’re planning to buy a Cape Cod home before the summer, you should already be looking.  New sellers are beginning to list their homes for sale and the wave of early buyers will fuel competition for the best listings.  If you’re seriously in the market, be sure you’re registered for Daily Alerts from a real estate website (like this one) and also be sure to get pre-approved for a mortgage to make you an attractive buyer. 

If you see some homes you like, I would welcome the opportunity to arrange all of your showings and to help you get the home of your dreams at the best possible price.   My services are of no cost to you since all Realtor commissions are paid by the seller.

If you would like personal assistance with your searches, please contact me anytime at (508) 259-8379 or by email at Marie@BuyOnTheCape.com.  I look forward to helping you realize your Cape Cod dream.

Marie

“If you’re lucky enough to have a home on the Cape, you’re lucky enough.”

                                                                                                                – Author Unknown