Our preferred mortgage lender, Michelle Kaufmann,  has some interesting information to share.

....."The one key component in home affordability that is at greatest risk today is interest rates. Many experts have stated that interest rates should be higher than their current levels, in some cases a lot higher.

One point to remember is that every 1% increase in interest rates decreases the buying power of an individual by 10% in home price. This means that if you qualify for a home priced at $200,000 today and interest rates increase 1%, the amount you could qualify for would be reduced to approximately $180,000 to maintain the same payment.

If you could benefit from moving to a new home, don't let this opportunity pass you by. Home prices are increasing in most markets and combined with the risk of increasing interest rates, your time to get the home you want could pass you by.

For those people who haven't refinanced in the last 18 months, calling Michelle could provide you with the opportunity to either cut your mortgage payment or save a lot of money by reducing the term of your mortgage to a 15 or 20 year fixed rate...."

Call Michelle to determine what the best path is for you. The money you may save could help fund anything from a vacation to a college plan to your retirement.

As far as finding the best home for you, why not start your house search today!  We'll be glad to assist in your exciting journey to home ownership.

"...Raleigh, the "City of Oaks" and North Carolina’s capital, has the vitality and energy of a major metropolitan area, with the friendliness and charm of a southern town. It is one of North Carolina's most livable cities in one of the state's most livable regions." ......"There is no better place to live and work than Raleigh. And the friendly people of this Southern town with an international touch will welcome you with open arms."

If you are considering relocating, review our current inventory and we will be more than happy to help you with your move to our great city.

Special Rules for Members of the Military, the Foreign Service
and the Intelligence Community

Congress has acknowledged the unique circumstances affecting members of the military, the foreign service and the intelligence community by making the following exceptions that apply to both the $8,000 tax credit for first-time home buyers and the $6,500 tax credit for repeat home buyers.

Exemption From Tax Credit Recapture Rules

• Typically, homes that are sold or that cease to be used as a principal residence within three years of the initial purchase are subject to recapture of the tax credit.
• However, qualified service members who sell or move from a tax credit home within three years of the initial purchase due to official extended duty are exempt from the recapture rule.

Extension of Tax Credit Deadlines

• The home buyer tax credit is available for qualified purchases with a binding sales contract in place on or before April 30, 2010 and closed by June 30, 2010.
• However, for qualified service members who are ordered on a period of official extended duty, these dates are extended for one year. For these home buyers, the tax credit applies to sales with a binding sales contract in place on or before April 30, 2011 and closed by June 30, 2011.
• A person who is forced to return to the U.S. for medical reasons before completing an assignment of at least 90 days of qualified official extended duty outside of the United States may qualify for the one-year extension.

Definitions

• “Qualified service member” means a member of the uniformed services of the U.S military, a member of the Foreign Service of the U.S., or an employee of the intelligence community.
• “Official extended duty” means any period of extended duty outside of the United States for at least 90 days during the period beginning after December 31, 2008 and ending before May 1, 2010.

Give us a call and we'll be glad to walk you through the process of making your home ownership dreams come true. 

To find out exactly “how much” home you can afford, it pays to get pre-qualified for a home mortgage to determine the perfect price range for you.

Next, take a few minutes to look at your personal finances.  You should have, ideally, 20% of the purchase price of the home as your down payment.  Additionally, your debt to income ratio should be less than 36%.  Don’t forget to include all your monthly obligations such as student loans, child support payments, credit cards, etc.

Apart from your down payment, ensure that you'll have enough left over to pay closing costs (which includes attorney fees and transfer fees). This amount on average ranges between 2% & 7% of the home price.  

Give us a call and one of our agents will be glad to help you with these and any other questions you may have regarding this major step toward home ownership.

In last month's You Magazine, Barry Habib, Chairman of Mortgage Success Source, discussed how home loan rates may well buck the phrase, "March comes in like a lion and out like a lamb" due to the Federal Reserve ending its Mortgage Backed Securities (MBS) purchase program on March 31st. And the last week full week of March did in fact feel the "roar of the lion" as in two days, interest rates increased sharply following financial uncertainty and action within the bond markets.

With uncertainty surrounding the months ahead in the mortgage arena, here is some information to help you put things into perspective.

First Things First
Mortgage rates did rebound a bit from the highs set in March, but one thing was left clear for all watching mortgage and interest rates overall. Volatility and spikes in rates can occur anytime, be it in the U.S. economic arena or the world.

That being said, everyone wants to get the best rate for their mortgage. When the last interest rate wave came across the land in 2003, happy homeowners couldn't wait to brag that they received an interest rate below 5.50% for a 30 Year Fixed, which was then the lowest rate we had ever seen. We are still well below that level.

Would $1 a Day Keep You from Your Dream Home?
Even though 30 year fixed rates starting with the number "4" with no points may be out of reach, a great rate can still be obtained. The other thing to take into consideration is that with a mortgage amount of $200,000, the difference between a rate of 5.00% and 5.375% for a 30 year fixed rate is $46 a month.

While no one wants to pay more for their mortgage than they have to, most people would agree that $46 a month is typically not enough to prevent them from buying the home of their dreams. After all, $46 a month is less than the cost of one tank of gasoline for many people. Combined with the after tax benefits of deducting the interest on a mortgage payment, for many families we are talking approximately $1 a day.

Lower Payment vs. Lower Rate of Interest
With interest rates at phenomenally low levels, an argument can certainly be made for people considering a mortgage for a shorter term. The 15 year fixed rate mortgage is one loan often considered.

Through the first twelve weeks of this year, 15 year fixed rates according to Freddie Mac have averaged a better rate of just over .50% as compared to a 30 year fixed. The greatest benefit of choosing a shorter term is knowing that the mortgage will have a zero balance in 15 years, saving the borrower over $110,000 in interest payments over 30 years.

However, the lower rate and shorter term do come at a monthly cost for borrowers. The difference in monthly payment for a 30 year fixed at 5.00% and a 15 year fixed at 4.50% is $477 a month higher for the 15 year fixed. And in these tough economic times, "cash is king." That is, "cash on hand" is king.

Many people would be better served having a smaller mortgage payment under a 30 year fixed, and then saving or investing the extra money. Note, saving and investing rather than spending the extra money is the key point here. In particular, people who find themselves without a job or who have a pressing financial need would benefit from being able to access these saved funds.

Other Options
While adjustable rate mortgages (ARMs) were touted as a contributor to the mortgage melt down, perspective in this arena is warranted as well. In viewing ARMs as an alternative, the most important thing to consider is how long someone intends to have the mortgage in place.

Many industry experts state the average time a mortgage is in place is seven years. Seven years is a long time. People move to different homes, relocate for employment reasons, and see their children get older, go off to college, or move out completely. It's important to consider these types of factors when selecting a mortgage.

According to Freddie Mac, over the last twelve weeks, the interest rate for a 30 year fixed has been just north of .75% higher than that of a 5/1 ARM (where the interest rate would be fixed for 60 months before incurring an adjustment). If you know that you may be moving either before the interest rate is subject to change or shortly thereafter, that .75% would save approximately $90 a month in the same $200,000 example above.

For those looking for a little more security, a 7/1 ARM (meaning the interest rate would be locked for 84 months before incurring an adjustment), offers an interest rate that is nominally higher than a 5/1 ARM (perhaps .125-.25% in interest) but still quite a bit below that of a 30 year fixed rate.

For people who expect to have shorter time frames for their mortgage, these two loans offers a fantastic rate while still assuring that the monthly interest rate and payment will not change for a specified period.

Best Path for all Prospective Borrowers
Whether you are looking to refinance or buy a home, attractive options remain for anyone seeking a mortgage today. However, as an individual or family's mortgage payment is often their largest monthly payment, obtaining proper advice is paramount to making the best decision.

Contact one of our preferred lenders, Michelle Kaufmann, Mortgage Consultant with PNC Mortgage, to discuss what options you should consider based on your short and long-term financial goals and objectives. Ask for a breakdown of the projected costs of any option, not only for the complete term of the mortgage but also for the time you expect to have the mortgage in effect.

In much the same way you cannot get yesterday back, if you have a FICO score that needs, shall we say, improvement, you may be unable to get a mortgage today. Depending on your lender, the amount of your down payment and the mortgage program you are applying for, the minimum standards for qualifying could be the lowest FICO score of either borrower, with a minimum score of 680.

For those applying for a loan guaranteed by the FHA, lower scores could still get you in that home but standards have risen there as well and can vary by lender.

The best path to take before you sign a purchase contract or apply for financing could warrant having your credit profile checked out by your lender in advance. If you need assistance improving your score and credit profile, they may be able to recommend a company or individual that can provide you educational assistance.

For help with your credit score and to determine if you are qualified for a home mortgage loan, contact one of our preferred lenders, Michelle Kaufmann.

Qualified 2009 and 2010 first-time home buyers can get up to 10% of the home's purchase price or a maximum of $8,000. In November 2009, legislation extended a tax credit of up to $6,500 (or up 10% of the home's purchase price) to long-time residents of the same primary residence if they purchase a new main home. To qualify, eligible taxpayers must show that they lived in their previous homes for a five-consecutive-year period during the eight-year period ending on the closing date of the new home.

Important details to remember:

1) You don't have to pay it back (as long as you stay in your qualified home for at least 36 months).

2) If you qualify for the credit, you can still apply it to this year's taxes, even if you've already filed your returns, or save it for your 2010 returns.

3) This is a true tax credit, not a deduction. If you qualify for the full credit, there will be an actual dollar-for-dollar reduction of up to $8,000 (or up to $6,500 for qualified repeat buyers) on your tax bill now or in 2010.

4) New income qualification limits have been put in place that expanded the pool of qualified buyers.

5) If you purchased a qualified home or plan to after reading this article, you must have a contract in place by April 30, 2010 (with closing to take place by June 30, 2010), so don't wait!

There are, of course, other details and qualification requirements and restrictions that you'll need to consider. By calling Michelle Kaufmann (one of our preferred lenders) you can get all the details & suggestions. 

Know your reasons for buying a home. Don't simply make assumptions here--"everyone needs to own their own home," "it is the best investment possible," "I simply MUST have a new home" may be perfectly acceptable reasons if they fit your personal situation. First of all, it is a good idea to remember that a home is just that--a place where you can live. Yes, there can be some wonderful advantages to home ownership, including pride and accomplishment, potential tax advantages and the build-up of equity. But it is generally a mistake to attach too much importance to the advantages and not enough to what should be the primary reason: A home is a place where you live. By knowing precisely what your reasons are for buying a home, you will be much more likely to keep everything in clear focus.

Spend some time analyzing your budget and finances. Although there is much emotion involved with purchasing a home, the financial aspects should never be underestimated. There are a number of areas that will assist you in getting a grip on your finances, your budget and ways to help in saving money.

Know exactly how much home you can comfortably afford. Listen to no one but the voice of your own budget. Your lender, your Real Estate Agent, and perhaps even your boss may have a vested interest in you paying as much--or more--than you should. There are thousands of home buyers who ignored this type of advice in recent years and find themselves either house poor or on the road to foreclosure. See the sections on prequalifying and preapproval and the chart to determine your qualifying ratios and affordability.

Familiarize yourself with the mortgage process. Learn about the different types of mortgages that are available and the sources for mortgage loans. Be aware of potential pitfalls and mistakes you may encounter during the mortgage process. See the section devoted to the entire mortgage process.

Distinguish between needs and wants. In 21st Century America, the words "want" and "need" are, for too many, interchangeable concepts. They aren't--they have quite different meanings. Not understanding the difference and believing that a "want" is actually a "need" can be both expensive and find you purchasing a totally wrong type of home.In general, a need is something that is required. A want is something that is desired. See more discussion in the article devoted to distinguishing needs and wants.

Get familiarized with home inspections. A whole house inspection not only can prevent problems by discovering defects in a home, it can be a valuable source of information on home maintenance and repairs. For more information, see the sections on house inspections.

For all you real estate questions or needs, we are here to help.  Give us a call at 919.779.3113 and we will assist you with your home buying or selling experience in the Raleigh, Garner, Clayton and Fuquay Varina areas.

We have a great inventory of homes in the Raleigh, Garner & Johnston County areas to choose from.  Give us a call and we will be glad to assist you.

If you're in the market for a new home, please search through our inventory and we will be glad to work you, to make your dreams a reality.

$8,000 First-time Home Buyer Tax Credit at a Glance

• The $8,000 tax credit is for first-time home buyers only. For the tax credit program, the IRS defines a first-time home buyer as someone who has not owned a principal residence during the three-year period prior to the purchase.
• The tax credit does not have to be repaid.
• The tax credit is equal to 10 percent of the home’s purchase price up to a maximum of $8,000.
• The tax credit applies only to homes priced at $800,000 or less.
• The tax credit now applies to sales occurring on or after January 1, 2009 and on or before April 30, 2010. However, in cases where a binding sales contract is signed by April 30, 2010, a home purchase completed by June 30, 2010 will qualify.
• For homes purchased on or after January 1, 2009 and on or before November 6, 2009, the income limits are $75,000 for single taxpayers and $150,000 for married couples filing jointly.
• For homes purchased after November 6, 2009 and on or before April 30, 2010, single taxpayers with incomes up to $125,000 and married couples with incomes up to $225,000 qualify for the full tax credit.

The $6,500 Move-Up / Repeat Home Buyer Tax Credit at a Glance

• To be eligible to claim the tax credit, buyers must have owned and lived in their previous home for five consecutive years out of the last eight years.
• The tax credit does not have to be repaid.
• The tax credit is equal to 10 percent of the home’s purchase price up to a maximum of $6,500.
• The tax credit applies only to homes priced at $800,000 or less.
• The credit is available for homes purchased after November 6, 2009 and on or before April 30, 2010. However, in cases where a binding sales contract is signed by April 30, 2010, the home purchase qualifies provided it is completed by June 30, 2010.
• Single taxpayers with incomes up to $125,000 and married couples with incomes up to $225,000 qualify for the full tax credit.

Give us a call and we will be glad to assist you with questions regarding this credit and help you search for your next property in the Raleigh, Clayton, Fuquay Varina areas.

Determining how much home you can afford, or what payment you feel comfortable with, can be a trying process. Calling lenders, looking at mortgage loan programs and interest rates can be confusing, to say the least. There is an easy way to get started, and give yourself an idea of where you stand.

The first step is to find out what mortgage interest rates are at the current time. You can typically do this with a couple of phone calls to lenders or some quick looking on the internet. Get your rates on conventional fixed rate loans. Now use this handy table to see what your payment would be at different price ranges and interest rates. Payments might be higher or lower than those shown in the chart depending on current interest rates.

To obtain a very clear picture of how much home you can actually qualify for, the best idea is to contact a reputable local lender and let them analyze your entire situation. The lender can calculate your income-to-debt ratio, do a quick credit score and give you the information you need. Typically, lenders like to see a ratio not exceeding about 28%. This does not take into consideration long term monthly debt. As an example, to qualify for a loan, lenders may require ratios of 28% or 36%. This means you can spend up to 28% of your gross monthly income on a motgage payment, and no more than 36% of your gross monthly income on all forms of debt, mortgage included.

We work with a number of loan officers and would be happy to recommend one right for you. Click here to contact us today.

We have a great inventory in Raleigh, Clayton, Fuquay Varina to choose from!

Some interesting news about a possible extension of the $8,000 first-time home buyer tax credit came out today.  A decision could come as early as this week, but the credit may take on a slightly different different form. The plan under consideration is sponsored by Senate Majority Leader Harry Reid and Senate Finance Committee Chairman Max Baucus. Here is how it would work:

1. For first-time homebuyers who purchase a home between Dec. 1 2009 and March 31, 2010: The credit would be as it is now, worth a maximum of $8,000.
2. For those who buy between April 1, 2010 and June 30, 2010: The credit value would fall to a maximum $6,000.
3. For those who buy between July 2, 2010 and Sept. 30, 2010: The credit value would fall to a maximum $4,000.
4. For those who buy between Oct. 1, 2010 and Dec. 31 2010: The credit would  go down $2,000, but it’s unclear when it would end.

This incarnation of the credit would also raise the income cap to $300,000 for joint filers from the current level of $150,000.

There have been other proposals concerning the tax credit, but they’ve run into some roadblocks. The proposed amendment has been offered to the Legislature Tuesday with the goal of having it pass the Senate on Wednesday and the House on Thursday. We will keep you posted.

In the meantime, look over our inventory for the Raleigh, Clayton and Fuquay Varina areas.  We will be glad to help you with your decision about buying your home.  Give us a call.  Happy house hunting !

Examples of NEEDS		Examples of WANTS
Enough square footage for comfortable living		Carpeting color, paint color, exterior color, roof color, etc.
Enough bedrooms to accommodate your family		Pool or Jacuzzi (unless for medical reasons)
Adequate number of bathrooms		Wood floors
Eat-in kitchen		Bay windows
Garage or basement for storage needs		Built-in entertainment center
Lot size to accommodate children's play area		Brass lighting fixtures
Adaptation for Handicapped		Skylights
Proximity to a specific school		A pretty view
All living areas on single floor for health reasons		Specific brand/types of appliances

Take a few minutes to develop your own list of NEEDS and WANTS. You can print out scorecards and recap sheets here that you can use as you begin to evaluate homes. The goal is to put the emphasis on finding a house that includes all of your needs and as many of your wants as is practical--yet remains in your budget. Once you have a clearer view of what your house will need to have, the next step, actually looking for a home, will be a great deal easier!

Give us a call when you're ready to search for that house that fulfills your needs, at 919-779-3113 or visit us and look over our inventory of homes in the Clayton, Raleigh & surrounding areas.

Forbes reviewed the 200 largest metropolitan areas in the US and examined 11 different criteria: colleges, cost of doing business, cost of living, crime rate, culture and leisure, educational attainment, income growth, job growth, projected job growth, net migration and subprime mortgages.

The Raleigh Wake County region is strengthened by its outstanding colleges, strong job growth (both past and projected), low business costs and highly educated workforce. Forbes.com points out while Raleigh cannot fully escape the impacts of the current recession, it will be one of the places to lead the nation's economic recovery.

Forbes also has released its list of the top 5 cities where Americans are relocating and Raleigh was again at the top of the list, followed by Austin, Charlotte, Phoenix and Dallas.

If you are interested in relocating to the Raleigh area, we will be glad to make that search easy and painless. Contact us at 919.779.3113 or visit our website to search our large inventory of homes in the Raleigh, Clayton, Fuquay Varina & Research Triangle Area.

We are thrilled to say that Clayton (in the Johnston County school district) was named in the 10th position in the U.S.   The magazine singled out East Clayton Elementary, Riverwood Elementary & Riverwood Middle Schools as the area's best. 

The article continued to say "Clayton, located 20 minutes from the state capital in Raleigh, is close to the thriving Research Triangle area. It is home to three golf courses, a 600-seat auditorium, and the Harvest Festival, which draws artists and craft makers from throughout the state. About 26% of households in the Zip Code have children, and the median household income is $84,005

"BusinessWeek is pointing out something that people here have known for a long time: That Clayton is a great place to live & raise a family", said Mayor Jody McLeod.  "Our schools are awesome.  Our people and our town are awesome, too".

The article continues to say, residents in Clayton get it all--good quality of life, affordability and top schools.

If you are considering Clayton (or any of the surrounding areas) as your future home, give us a call and we'll be glad to help you make that dream come true.

According to Triangle Multiple Listing Service Statistical Resources (August '09), low mortgage rates and the federal first-time home buyer tax credit are spurring an uptick in home sales in the Triangle regional housing market. January through May of this year saw pending sales lagging behind 2008's pace by 23.1 percent. In the last three months, however, pending sales have been only 3.9 percent behind last year's activity.

The median sales price in August was $187,000, down 5.3 percent from last August. While that means a challenging environment for sellers, soft prices mean improved affordability, which is good news for buyers.

The Housing Affordability Index for August was 169, which means that the median family income in the region is 169 percent of what's necessary to qualify for the median priced home. That's an improvement of almost 30 points from a year ago.

The first-time home buyer tax credit ends Nov. 30 and the rush is on for  buyers to make their decision within the few weeks to be sure there is time to close the deal and reap the benefit.

Let me give a quick example:

You buy a house for $140,000 using an FHA loan. You are required to put 3.5% down which is $4,900. You can expect between $3,000 and $3,500 in closing costs which will bring your total out of pocket to about $8,400 to close on your new home. When you file your taxes, you can get an $8,000 credit to reimburse yourself! We can even negotiate for the seller to help with your closing costs which means you could actually make money by buying a new home!

Are you ready to get moving?  We have a great inventory in the triangle area to choose from.

 If you are considering purchasing a new home in Raleigh, Garner, Clayton and surrounding areas, contact us at 919-779-3113.

Here's some important advice: as soon as you have made the decision that you want to buy a house, one of your first steps should be to make certain that you have a clear picture of your financial situation. At a minimum, you will most likely want to do the following:

Run a free Credit Report to make certain that there are no discrepancies or problems in your credit history.

Do an analysis of your current financial situation: where the money comes from (your total income) and where the money is presently going (your current spending). Develop a household budget for your current situation. Get into the habit of using it on a consistent basis!

Keep your spending patterns in check.

Do an analysis of how a house purchase will affect your budget. Be sure to factor in not only mortgage payments (including insurance and taxes) but also funds for items such as repairs and maintenance.

Begin to gather items such as: last 3 years Income Tax returns, current copies of pay stubs, records of any past derogatory credit history that has since been paid off, and records of any supplemental income you may have. If you are self employed, you will need all business records and tax returns for the last 3 years. Having these items close at hand will save an enormous amount of time when the Mortgage Company begins to ask for them (and ask for them they will!)

If it is possible to do so without adversely affecting your down-payment situation, pay off minor debts. The less debt you have the easier your Mortgage "sailing" will be.

Do not incur any new debt. Many mortgage applications have been stopped in their tracks because the applicants had decided a week before the application that a shiny new car with a big finance or lease payment would look just perfect in the driveway of their new home. Since mortgages are based on debt to income ratios (the amount you pay out monthly versus the amount you bring in) a newly acquired debt could be enough to throw the ratios off and make the mortgage unobtainable.

If you are considering purchasing a new home in Raleigh, Garner, Clayton and surrounding areas, please call The Rodney Carroll Team at 919-779-3113.