Charlotte Homes for Sale
Nina Hollander
(704)779-0813

It seems that everyday there’s a new challenge to getting approved for a mortgage. Recently, The New York Times ran an article about how being/getting pregnant during the mortgage approval process might hurt your chances of being approved for a mortgage. The fundamental issue is that when a baby makes its arrival maternity and/or paternity leave can lead to a change in household income and lenders no longer assume that one or both parents will return to work on a full-time basis. This possible change in income (especially if permanent or long-term) can affect the borrowers’ debt-to-income ratios (a critical yardstick for mortgage approval), leading to a lower loan amount approval or no approval at all.

If you’ve been planning on buying a home and starting or increasing your family (a major reason families buy new homes), you should be aware of this. You should also know that your real estate agent and your mortgage lender cannot, by law, ask you about your pregnancy plans (it’s a violation of the Equal Credit Opportunity Act). You can, however, be asked if you expect your future employment/income situation to be changing for any reason in the near term. It makes good sense to be honest with your lender from the start. You don’t want to go through a mortgage approval process, have your job/income status checked just before closing on a home only to have your loan declined last minute. And keep in mind that most lenders simply want to have some proof that income will go back to pre-maternity/paternity leave levels.

Watch a recent NBC Today Show Story On Pregnancy & Mortgages. You’ll find it enlightening.

A recent study from MIT and Harvard researchers indicates that a foreclosure reduces the value of a home by 27%! And if you own a home within only 250 yards of a foreclosed home, the value of your home drops by at least 1% on average as well (although, if you are in a neighborhood with lots of foreclosures, my experience shows that non-foreclosed home values drop by more than 1%). By comparison, if you file for bankruptcy, a home’s value drops only by about 3%. Currently, 1 in 12 homes valued at under $1 million, are in foreclosure.

Foreclosures have additional serious, negative consequences:

• If you are foreclosed on, your credit score will drop somewhere between 250-300 points.
• The foreclosure will remain on your credit record for seven years.
• You will be unable to qualify for a mortgage to purchase another home for at least 24 months and maybe as long as for 72 months.
• You may be unable to get hired for any job dealing with money.
• In some professions, you might actually lose your job.

And keep in mind that every month you are late with a mortgage payment prior to a foreclosure notice, your credit score is also dropping: by 40-110 points the first 30 days you are late and by 70-135 points by the time you are 90 days late.

And if you are contemplating a short sale, keep in mind that your credit score will drop between 100-200 points once the short sale is completed and you won’t be able to buy a new home for five years financing with a conventional loan. (If you are using a VA loan, you could buy a new home in two years; with an FHA loan in three years.) But these time frames all assume you’ve re-established your credit and payment history in the intervening years.

If you’d like more information about this subject contact Carolinas Realty Partners.

 The first-time and move-up home buyer tax credits might be gone, but with interest rates at historical lows, it makes more sense than ever to buy a home now. You’ll save thousands!!!  For example, on a $200,000 mortgage at 4.5%, you could save over $43,000 in interest versus a 5.5% loan on a 30 year loan. And your monthly payments are about $122 per month lower at the 4.5% rate.

Another way to look at it… every 1/2% change in interest rates is approximately equal to a 5% change in sales price! Every 1% change in interest rates is equal to a 10% change in sales price. In other words, when interest rates go down by a 1/2%, it’s like buying a house at 5% less. Obviously, the same house “costs” you 5% more with every 1/2% increase in interest rates.

So, with current low, low interest rates, not only do you get to pay less on a monthly mortgage and save money over the life of the loan, you get to buy “more” house than you could afford with higher rates.

If you are planning to buy and planning to do FHA financing, it’s even more critical that you buy now. As of September 7th, FHA’s up-front mortgage insurance and monthly mortgage insurance goes up. Watch this important video: FHA Buyer Tax September 7th to learn more, as very few people have been talking about this issue and September 7th is less than one month away!

With interest rates expected to stay low throughout 2010 (and where they go in 2011 is anyone’s guess right now), it’s the perfect time to think about buying a home. For more information Carolinas Realty Partners are always happy to help.

Lot of people think it’s impossible to buy a home today with low or no money down programs… but there are quite a few programs available to home buyers today in Charlotte and North Carolina, especially for first-time home buyers who have credit scores above 620.

Here’s a list of a few of the loans available  around the country;(and you don’t need to be a first-time buyer for a number of these).

• FHA Loans: require a only a 3.5% downpayment. Lots of mortgage lenders are active in making these types of loans.
• USDA Loans: these are 100% financing. There are income limitations, but if you are buying a home in a USDA-eligible area, these loans are a wonderful source of financing. But not all lenders do these, so shop around.
• VA Loans: these are 100% fiancing. You don’t need to be a first-time buyer for these, but be sure you work with a lender who has experience with VA Loans.
• HUD Homes: there are lots of HUD foreclosure homes available for sale and financing at only $100 down. Contact your realtor for a list of these homes.

Here’s a list of low or no money-down loan programs available specifically in Charlotte and/or North Carolina:

• House Charlotte Loans: 100% financing.
• North Carolina Finance Agency: part of the NC Bond program, these loans requre only $1,000 down.

It’s an awesome time to buy a home! Interest rates are at historic lows and prime borrowers can borrow at less than 5%, including FHA, Va,USDA loans. These rates are not just for conventional 20% down loans. Home prices are still low. This combination of low rates and low home prices rarely comes about. For more information contact Carolinas Realty Partners. We can put you in touch with some top Charlotte-area lenders and help you find that dream home!

FannieMae instituted new credit rules on June 1st that many home buyers are not yet aware of, but which will have some serious impact on their ability to close on a mortgage. Essentially, what Fannie Mae has done is require lenders to verify that borrowers haven’t taken on any new debt during the mortgage application and underwriting process. Even after your loan may have been approved and is ready for closing, underwriters will be looking for the following information about your credit:

• An updated credit report prior to closing to show current credit card bills and minimum monthly payments. This updated credit report will replace the original numbers used at the time you applied for your loan. If your debt levels have increased just before your mortgage loan is ready to close, your loan could be denied.
• An updated credit score. If your FICO score drops in the time between your mortgage application and closing below minimum lending standards, your loan will be denied. And if it’s not denied, you may be subject to a higher interest rate which will increase your monthly mortgage payments.
• An updated credit report inquiry history. Underwriters will be looking to see if you have been applying for credit elsewhere and verifying that you’ve not incurred new debt from the time you applied for your mortgage loan.

What does this mean to you? Basically, it means you need to be very careful with your credit from the time you make a formal application for a mortgage until you actually close on your home. Here’s a list of important “Dont’s:”

• Don’t make major purchases (cars, boats, leases, jewelry, appliances, furniture etc).
• Don’t open new credit card accounts.
• Don’t apply for new credit until after you close on your mortgage.
• Don’t transfer credit card balances from one account to another.
• Don’t close any credit card accounts.
• Don’t pay charge-offs, collections, loans, credit cards without first discussing the impact with your lender.
• Don’t max out or over-charge on your current credit card accounts.
• Don’t consolidate your debt into one or two credit card accounts.
• Don’t take out any new loans.
• Don’t finance any elective medical procedures.
• Don’t quit your job, change industries, or start a new company.
• Don’t switch from a salaried job to a commission-based job.
• Don’t change bank accounts.
• Don’t transfer large sums of money between bank accounts.
• Don’t forget to pay your bills (even if some are in dispute).
• Don’t accept cash gifts without filling the property “gift” paperwork.
• Don’t make random, undocumented deposits into your bank account(s).

If you’d like a handy list of these new rules, email us and provide us with your name and email address and we’ll get a list out to you immediately.

New credit card rules went into effect earlier this week. Many of these rules will positively impact consumers; some might have a less positive impact down the line. Here’s a quick summary of the key provisions you should be aware of, as well as some links to more detailed information about the new rules.

• You must have 45 days notice whenever your credit card company plans to increase your rates, fees, or make other major changes to your account. You also have the right to cancel the card before any of these fees go into effect (but there may be penalties to do so, which you need to find out about prior to cancelling).
• The 45 days notice of major changes does have exceptions. Exceptions can include: if you have a variable rate tied to an index on your card; if your introductory rate has expired; if you haven’t made your payments on time.
• Future monthly bills must include information about how long it would take you to pay off your balance when you only make minimum payments. The bills must also give you a calculation of what your payment needs to be if you are to pay off your current balance in three years.
• Credit card companies cannot increase your rate during in the first 12 months after you open your account (unless, again, you have a variable rate, an introductory rate, if you are more than 60 days late in paying.) And if your rate does go up, the higher rate can apply only to new balances on your card and they can’t raise rates for 60 days.
• If you want to charge over your credit limit, you must opt-in and you can opt-out at any tie.
• If you have fees on your card, they can’t be higher than 25% of your initial credit limit.
• Your rates cannot be increased if the credit card company was late in crediting your payment.
• If you make more than the minimum payment, the extra amount paid must be applied to higher-rate balances on your account.
• Credit card companies must send you your bill 21 days before your payment is due and your due date should be the same day each month.
• No more universal default. In other words, if you are late on one card, companies can’t raise your rates on other accounts.
• Gift cards must keep their full balance for five years.
• Cards may not be issued to anyone under the age of 21 without a co-signer or proof of ability to pay.

While these are certainly great protections for the consumer, keep in mind that “there is no free lunch” and that ulitmately consumers will pay a price for the new protections. This might include:

• More difficulty in getting approved for credit.
• Higher merchant fees, which ultimately get passed down to the consumer via higher prices in stores.
• Additional fees when you opt in for over credit limits.
• Cut backs on reward points with cards.
• Possibly higher rates for late payers.

For more information about the new credit card rules, go to the Federal Reserve’s site which provides a detailed explanation about how the new rules will affect you.

If you are a first-time home buyer or a move-up/repeat home buyer the April 30th, 2010 deadline is looming for you to take advantage of the tax credits.

• $8,000 FIRST TIME HOME BUYER CREDIT DEADLINE:  You must be in contract by April 30th and close on your new home by June 30th, 2010. To be considered a first-time home buyer you can’t have owned a home in the past three years.
•  $6,500 MOVE-UP/REPEAT HOME BUYER CREDIT DEADLINE: You must be in contract by April 30th and close on your new home by June 30th, 2010. You must also have lived in your current home for 5 consecutive years out of the last 8 years.

$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, a first-time home buyer is 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 unless the home is sold or ceases to be used as the buyer’s principal residence within three years after the initial purchase.
• The tax credit is equal to 10% 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.
• 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 unless the home is sold or ceases to be used as the buyer’s principal residence within three years after the initial purchase.
• The tax credit is equal to 10% 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. Single taxpayers with incomes up to $125,000 and married couples with incomes up to $225,000 qualify for the full tax credit.

There’s no indication that the current home buyer tax credit programs will be extended again. April 30th is just around the corner! Don’t delay if you are looking to buy a home. Lots of great homes are for sale in the Charlotte metro area. Contact us today to help you find your dream home by April 30th!

If you’ve been planning to buy a house this spring with an FHA loan, you need to know about several FHA financing changes coming in about six weeks that will increase your cost of borrowing. These deadlines are:

ISSUE:  FHA FINANCING – SELLER CAN NO LONGER CONTRIBUTE MORE THAN 3% FOR CLOSING COSTS AND PREPAIDS.   As a  buyer, you will likely need to have more money for closing or you could end up with a higher interest rate which could impact your ability to qualify.  This will be more of an issue for homes that are $150,000 and below. 

DEADLINE:  APRIL 4^TH, 2010 to be in contract.

ISSUE:  FHA FINANCING – UPFRONT MORTGAGE INSURANCE PREMIUM INCREASING FROM 1.75% TO 2.25%   This means you will likely need to have more money for closing or could end up with a higher interest rate which could impact your ability to qualify.  On a $200,000 purchase, you would be charged $1,000 more to do the loan.   

DEADLINE:  APRIL 4^TH, 2010 to be in contract.

These changes will seriously impact how much money you need to bring to closing and how much of a purchase amount you might qualify for. With interest rates also predicted to rise in the coming months, there’s never been a better time to buy!

Would you like $23,900 in FREE MONEY from the US Government and the State of North Carolina to purchase a home in the Charlotte metro area in North Carolina?

Carolinas Realty Partners can introduce you to a program that provides $14,900 in FREE downpayment funds to purchase a foreclosure home anywhere in Mecklenburg, Union, Cabarrus, Gaston, and Iredell Counties in North Carolina’s Charlotte metro area with a sales price up to $210,000. This downpayment assistance program PLUS the $8,000 First-Time Home Buyer Credit provides a total of $23,900 in downpayment, closing costs, and tax credit incentives!

If you are interested, you need to meet the following qualification criteria:

• You must be under contract for ahome by April 30th, 2010 and close by June 30th, 2010 to qualify for the $8,000 first-time tax buyer credit.
• You must be a first-time home buyer wishing to purchase a home in Mecklenburg, Union, Cabarrus, Gaston, or Iredell Counties.
• As an individual your income must be no more than $55,850.
• As a two-person household, your income must be no more than $63,850.
• As a three-persn household, your income must be no more than $71,800.
• As a four-person household, your income must be no more than $75,000.
• You want to purchase a foreclosure home built after 1978 at a price of no more than $210,000.
• You need to have $1,000 to put down.

Each year that you live in the home, 20% of the $14,900 from the State of  North Carolina will be forgiven. After 5 years, you will owe the state nothing and have enjoyed the $14,900 for FREE!

For more information about this program contact us at Carolinas Realty Partners and we’ll quickly get you on your way to getting qualified.

‘Tis the season to do shopping… and get bombarded with offers to open credit cards!   The deals are very tempting, too. ”Open a charge card today” and save up to 20% on your purchase!  But if you are in the market for a new home, taking advantage of in-store savings could prove be a long-term money loser.  Every time you apply for a credit card, your credit score drops.

According to myFICO.com, “new credit” accounts for 85 out of 850 possible credit scoring points.  A credit score is worth protecting because of how mortgage rates are determined.  A conventional mortgage applicant with 20% equity, whose FICO score is 720-739 will be offered rates 0.125% higher than a comparable applicant with a 740 credit score.  For a $200,000 conventional loan, you could face the following rate increases based on your credit score:

• For 700-719 Credit Score: Rate increases by 0.375%  OR $750 more in closing costs.
• For 680-699 Credit Score: Rate increases by 0.750% OR $1500 more in closing costs.
• For 660-679 Credit Score: Rate increases by 1.250% OR $2500 more in closing costs.

Having a low credit score can be expensive in the long term.  So, while it’s okay for you to take advantage of in-store savings during the holiday shopping season, it’s also important to be aware of how your credit score may be affected. Short term savings may prove to be way less than long term costs if you plan to be buying a home in the next several months.