These two programs mean cash for buyers and sellers
Spring is traditionally the busiest season for homebuying in Massachusetts, with more hospitable weather, flowers in bloom, grass sprouting and houses once again looking their best. Spring is also the right time to sell, as demand rises among buyers looking to secure a home well before summer ends.
Throughout the COVID-19 pandemic, homebuying has been brisk, as it was before the coronavirus hit. Since 2019, prices have risen almost 12 percent statewide1. Buyers have been switching from smaller, more urban apartments and condos to houses where they gain living space, a higher quality of life, or even a better home office setup. And those who have been fortunate enough to retain their jobs amid the current economic challenges are taking advantage of historically low mortgage rates.
Even more pronounced than the homebuying surge has been the refinancing boom. Many fully employed education professionals have been taking advantage of low interest rates, a result of the pandemic, allowing them to refinance into rates as low as 2 percent. The simple calculation that homeowners should be doing is determining whether they can drop their current interest rate a full percentage point, which makes the refinance closing costs worthwhile.
Other homeowners have taken advantage of low rates to take cash out of their homes for major expenses, including renovations, higher education costs, debt payoffs and vacation home investments. As the demand for homeownership has outstripped supply, home equity across the country has been reported to be at its highest ever.
Whether you are in the market for a new home or are looking to leverage your current home’s value for a lower monthly payment or to take cash out, this is a great time to initiate a transaction. Low mortgage rates often more than offset any residual expenses of home buying or refinancing, especially when working with a mortgage lender that might be offering certain discounts.
MTA Benefits has endorsed and fully vetted a local and direct mortgage lender offering exactly these services. Mid-Island Mortgage, which has been in business since 1959 and has an office in Woburn, offers MTA members exclusively low rates and incredible mortgage discounts on lender fees and closing costs, up to $3,000 in total.
Learn more at www.mtabenefits.com/mortgage. To get a quick quote or have a consultation, call Mid-Island Mortgage Vice President Teresa Balian at 617.665.7770 or email mtabenefits@mortgagecorp.com.
That’s not the only way you can save when buying or selling a house, however. MTA members can take advantage of a real estate savings program that isn’t available to the typical consumer. MTA Benefits and Berkshire Hathaway HomeServices Commonwealth Real Estate have partnered to allow MTA members to earn cash back on the sale or purchase of a home. For example, if you sell a $500,000 home, you will earn $2,500 after closing, or 20 percent of the service fee collected. You’ll be partnered with an experienced real estate professional who will help you navigate one of life’s monumental transactions in a competitive marketplace. For more information on this exclusive benefit, visit www.mtabenefits.com/bhhs.
Are your children in college or applying soon? Your Parent PLUS loans may be forgiven.
When they receive the response to their application for federal student aid, many parents of college-bound students are aghast when they discover what they’re expected to contribute. It looks like a typo — or a series of typos! So many zeroes. So much money. The loan many parents turn to is the federal Parent PLUS loan, a way to bridge the gap between what your son or daughter can borrow and what the college actually costs. At first glance, that gap can look a lot like the Grand Canyon.
Fortunately for MTA members, repaying only a portion of those PLUS loans before the remaining balance is forgiven is a possibility. That can have a significant impact on the way we approach borrowing.
The Public Service Loan Forgiveness program, or PSLF, has been fraught with problems since the first borrowers became eligible for forgiveness in 2017. The U.S. Department of Education under Betsy DeVos seemed to slow down the application review process intentionally. Many loan servicers had improperly or recklessly advised borrowers and enrolled their loans in repayment plans, rendering the loans ineligible for forgiveness after 120 payments.
The federal government has now created a temporary relief opportunity for people who were improperly advised. Approval rates are still low, and myths and misinformation abound on the internet about what it takes to qualify. So it comes as no surprise that very few MTA parents who are carrying or about to take out Parent PLUS loans are aware of the forgiveness option. But fear not. It can be done!
MTA Benefits presents free webinars on student loan management, and a good deal of the content is devoted to Parent PLUS loan forgiveness — including how to qualify, how to place the loans in the right repayment plan, how to incorporate the PSLF option into the college application process, and potentially how to incorporate it into your retirement planning. The Biden administration is also reviewing opportunities to improve the PSLF program, and ongoing updates are provided in our webinars. Why not join us? Visit www.mtabenefits.com/webinars for upcoming dates.
TWO KEY UPDATES
1 As many of you know, the federal student loan payment holiday has been extended to Sept. 30. If you’re a PSLF candidate, you shouldn’t make voluntary payments at this time. Prepare your budget with an eye toward resuming payments in October.
2 Though it’s still uncertain which of the student loan relief options being discussed by the Biden administration will emerge, this is probably not the time to pursue a private loan consolidation, since any relief granted will only apply to federal student loans.
For more information, visit www.cambridge-credit.org/mta.
1 http://realestate.boston.com/buying/2020/12/22/experts-predictions-us-mass-housing-2021/
