Real Estate Information Archive

mortgage rates once again inched lower this week, lowering the cost of borrowing and increasing housing affordability. 

Here’s a closer look at rates for the week ending Feb. 2: 

• 30-year fixed-rate mortgages: averaged a new record low of 3.87 percent, with an average 0.8 point, dropping from last week’s 3.98 percent average. A year ago at this time, 30-year rates averaged 4.81 percent. 
• 15-year fixed-rate mortgages: also reached new lows this week, averaging 3.14 percent, with an average 0.8 point. Last week, 15-year rates averaged 3.24 percent and a year ago at this time 15-year rates averaged 4.08 percent. 
• 5-year adjustable-rate mortgages: averaged 2.80 percent, with an average 0.7 point, dropping from last week’s 2.85 percent average. Last year at this time, 5-year ARMs averaged 3.69 percent. 
• 1-year ARMs: averaged 2.76 percent this week, with an average 0.6 point, inching up slightly from last week’s 2.74 percent average. A year ago, 1-year ARMs saveraged 3.26 percent. 

Source: Freddie Mac

For more info:

http://realtormag.realtor.org/daily-news/2012/02/03/mortgage-rates-hit-new-lows-again

1. Close to historic downtown

2. Close to beaches

3. Near college

4. Near golf courses

5. Fabulous restaurants

6. Walk to shopping/restaurants

7. Outdoor lifestyle

8. Year round golf/tennis

9. 2 hours to theater, hockey

10. 3 hours to Panthers game

11. Parks and recreation

12. Bike trails/walking trails

13. Upscale shopping

14. Great boating and water life

15. Great fishing/diving

Market Value?  What the Heck Does That Mean, Exactly?

In layman’s terms, Market Value is is what a Buyer is willing to pay and what a Seller is willing to accept in today’s market, assuming both parties are well informed about comparable sales in the area and that there aren’t any financing perks thrown into the deal, like a property trade.  (  ie:  I’ll buy your 3 bedroom colonial and I’ll give you $50,000 cash, my pontoon boat, and my time share in Florida.  That might be a great transaction for both parties, but it’s not useful in determining market value.)

Factors that IMPACT the market value....

Location.  We’ve all heard “location, location, location.”  It does matter.  Different neighborhoods within the same city can have completely different market values for similar size/style homes just because of the location.  Is there a factory going in across the street?  A golf course next door? How about a neighborhood park?  Or a major highway directly behind the house?  These things matter when comparing homes.

Age of home.  A home built in 1890 is just not a good comparable for a home built in 2010…just think about the changes in electrical code in that period of time!

Square footage of home and size of lot.  Frequently, larger homes and lot sizes have higher market values, however the law of diminishing returns does eventually step in.  Bigger is not dollar for dollar forever.  For example, just because a 2 acre lot in Monmouth, ME sold for $30,000 does not mean that a 40 acre lot in this same town should sell for $600,000 (using $15,000/acre as an example).  A 2,000 sq. ft. ranch is not the same home as a 1,000 sq. ft. ranch, even if they are in the same neighborhood.

Layout/Style.  Ranch homes are not good comparables for 2 story colonials.  A two bedroom home is absolutely not in the same class as a 4 bedroom home. In areas where one particular layout is preferred (sells quickly) that layout probably has a higher market value…all other factors taken into consideration.  (Like location, for example.)

Condition.  THIS FACTOR IS COMPLETELY WITHIN A SELLER’S CONTROL.  A home is good condition is going to have a higher market value over a comparable home in fair or poor condition.

Sale prices of recently sold properties.  Not what they LISTED for.  What they SOLD for.  And it has to be recent sales – it’s about the market TODAY, not two year ago.  The look back period is generally the preceeding 6 months, however sometimes the preceeding 12 months must be used if there haven't been many sales in the area.

Current competing properties.  How many comparable properties are on the market?  If there is a large inventory of properties for sale, like the recent Real Estate market, market values will be lower.  Remember Economics and Supply and Demand?

AND THEN THERE IS THE STUFF THAT JUST DOESN'T MATTER

The price you originally paid for the property.  Doesn’t matter.  What you paid 8 years ago has absolutely no influence on what a buyer TODAY is willing to pay.  The market today will be completely different from the market 5 years from now.  The only thing that matters is what is happening TODAY.

How much money you WANT to walk away from the sale with.  Sorry, this doesn’t matter either if the current Real Estate market does not justify the higher price.

How much money you NEED to walk away from the sale with.  Nope.  Not a factor.  Buyers  care about how much the property is worth based on the current market.  That’s why we are seeing so many Short Sales in the current Real Estate market.  These properties are selling for less than the owners owe (need.)

How much it would cost to rebuild today.  Frequently, this subject comes up in conjunction with insurance. (“My homeowner’s policy says my house is worth $500,000!  How can you tell me that it has a market value of $350,000?”)  Insurance policies are about risk.  What materials are used in the property’s construction and how fast do they burn?  Are there any potentially injurious items on the property?  (ie:  trampolines) Do you live in a high crime area?  What is your credit score? 

Personal opinions of family, friends, neighbors.  Your neighbor, who used to be a Real Estate agent but is now selling cars, says it’s worth X. Your wife’s uncle’s best friend says the house the next street over sold for X so your home should be worth Y because it’s in WAAAAY better condition.  Local neighborhood gossip says that Fred and Ginger down the road got Z for their house!  It’s great that there are so many people in your life ready to help you, but their opinions JUST DON'T MATTER.

For more info:

http://activerain.com/blogsview/2735548/market-value-what-the-heck-does-that-mean-exactly-

Brrrberry- The Frozen Yogurt Bar has a new location in Mayfaire right near the Harris Teeter! They will be having a grand opening TOMORROW (January 21) and will be serving free cups ALL DAY! Do not want to miss this yummy opportunity!

We haven’t heard a lot about inflation recently. However, prices have started to creep upward over the last year. As examples, here are a few categories that increased from November 2010 to November 2011:

• Food at home – up 6.2%
• Housing fuels and utilities – up 3.5%
• Transportation – up 9.2%

Here's a look at the issue of inflation and the advantages of owning Real Estate. The National Association of Realtors (NAR) took an historic look at the impact of inflation. Here are some inflation numbers over the past 30 years:



We can see that Real Estate has fared very well. The most important number is the $0 increase in mortgage amount. The study assumed that the homeowner took a 30 year fixed rate mortgage thereby locking in the housing expense for the thirty years.

NAR then looked at inflation moving forward over the next thirty years. Obviously, if it remained the same as the last thirty years the percentage increase would be the same. They looked at a low inflation scenario and a high inflation scenario. The graph below shows the findings:

For more info please follow this link!

http://activerain.com/blogsview/2691447/advantages-of-owning-real-estate

Tips to Avoid Loan Approval Delays or Denial

Congratulations! You have found the home you have been dreaming about. You made a bid and had it accepted.  You have met with your Loan Officer, completed the mortgage application and the loan approval process is underway. Everything is looking good, the closing is only weeks away.

It’s smooth sailing from here, right? Probably. However, in an industry that feels like a continuously moving target, it’s not always easy to recognize what the next potential pitfall for our clients might be.  So here’s a little “old school” advice on how to advise and guide your clients through the treacherous waters known as today’s Real Estate transaction:

Don’t: Allow multiple credit checks

Depending on your credit score, 3 points could make the difference between approved and denied.  One additional credit pull might make that difference.

Don’t: Take out any new debt   

I have  seen this delay or even ruin a closing.  The temptation to buy is strong when there are so many exciting purchases to be made for that new home.  Everything from appliances to furniture can lure you into a decision that you should have waited to make.

Remember: The lender could re-pull credit just prior to closing and if a new debt appears, it could potentially be fatal to the approval.

Don’t: Change Jobs

It may be a good idea to hold off on accepting that new job offer until they’re closed.  While this isn’t necessarily a deal killer, it can be a deal delayer.  One of the factors mortgage companies consider is the length of time they’ve been with their present employer and as you can imagine, they are partial to stability.  At the very least, changing jobs initiates the need for more paperwork and additional verifications.

Do – File tax returns and/or extensions

The lender will require copies of transcripts from the last 2 years

Do – Explain or documents all inquiries on your credit report

The key piece here is that NO new debt has been established.  I know it seems like were beating a dead horse, but it’s THAT important!

Do – Disclose all Debt:  Even if it did not show up on the credit report, make sure it’s disclosed to the lender.  Believe me – they will find out eventually and it’s always better to catch it early in the transaction.

2012 New Hanover County Property Revaluation

Work on the 2012 county-wide revaluation is nearing completion. Assessors in the tax department have researched and analyzed the sales of various properties throughout the county, and we have seen a lot of change since the 2007 revaluation. The coastal areas of the county have seen the biggest decrease in values, while other areas have experienced either small or negligible decreases. Some areas even experienced a slight increase. We have completed the valuation of all residential properties and your Notice of Assessed Value notices were sent during the final week of 2011.

For more info please follow this link!

http://www.wrar.com/pub_PDFs/GovAffairs/2012NHC-Property-Reval.pdf

Just a quick update on current mortgage Loan Program Limits!

Conventional

Limit: $417,000

Max Loan-To-Value: 95%

No Income Limits

PMI Required on loans greater than 80% Loan-To-Value

USDA

Limit: $417,000

Max Loan-To-Value: 100%

Income Limit: $74,050 (families of 1-4 people), or $97,750 (families of 5-8 people)

2% Funding Fee (can be financed into the loan)

PMI Factor of 0.3% Monthly

FHA

Limit: $303,750

Max Loan-To-Value: 96.5%

No Income Limit

1% Funding Fee (can be financed into the loan)

PMI Factor 1.15% for a 96.5% loan (scales down as LTV comes down)

VA

Limit: $417,000

Max Loan-To-Value: 100%

No Income Limits

2.15% Funding Fee (can be financed into the loan, can change depending on past usage of eligibility)

No Monthly MI

For more information, contact your Alpha mortgage Loan Officer!

Carolina Beach is a beautiful area off the coast of North Carolina. This website has upcoming events, a live beach cam, all of the hot spot restaurants, as well as shopping and lodging! You don't want to miss this opportunity at a great beach spot for this summer!

http://www.carolinabeachgetaway.com/

For the 59th month in a row, Nevada continues to have the highest foreclosure rate in the country — despite a new law that took effect in October that changed the state’s foreclosure process and was expected to curtail foreclosures there. Although foreclosures were down 43 percent year-over-year in Nevada, its foreclosure rate still remained higher than any other state.

The following are the top 10 states with the highest foreclosure rates in the country in November, according to RealtyTrac data. 

1. Nevada: 1 in every 175 home received a foreclosure filing in November
2. California: 1 in every 211 homes
3. Arizona: 1 in every 256 homes
4. Utah: 1 in every 290 (This state saw a 74 percent increase in November from October in foreclosure activity.)
5. Georgia: 1 in every 330 homes
6. Michigan: 1 in every 330 homes
7. Florida: 1 in every 358 homes
8. Illinois: 1 in every 427 homes
9. Ohio: 1 in every 500 homes
10. South Carolina: 1 in every 517 (This is the first time South Carolina has made it into the top 10 for foreclosure activity since RealtyTrac began tracking in 2005.)

For more info:

http://realtormag.realtor.org/daily-news/2011/12/15/10-states-hit-hardest-foreclosures