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

If you’ve been thinking about buying a home this year, there are some good reasons why you might want to do so sooner rather than later. Our “lending partners” at American Home Mortgage recently updated us with the following news about what we can expect in the mortage loan markets in the forseeable future:

• FHA loan limits are currentlly $303,750 in the Charlotte metro area.  The current base loan limit for the country for FHA is $271,050.  FHA rates were increased to help during the housing crisis, but this temporary boost is set to expire on October 1, 2011.  The current intention of the administration is to let the limits go back down to the base loan limits. This means your “borrowing power” with an FHA loans may well decrease by $32,700 by the fourth quarter of 2011.
• The administration has recommended raising the FHA up-front mortgage insurance from 1% to 1.25%. Don’t be surprised to see something happen during 2011 raising the amount of up-front mortgage insurance on FHA loans.
• The administration is recommending that Fannie Mae and Freddie Mac raise their minimum down payment from 5% to 10%.  We would expect considerable debate on this issue, but if this goes through, home buyers will need twice as much in cash to put down than they do today. Still hard to say when this might pass.
• Currently the loan limit for conforming loans is $417,000 for the Charlotte metro area.  (Beyond that amount, you are into a jumbo loan.) Fannie Mae has annouced that the high cost loan limit of $729,400 in other parts of the country will drop to $625,500 as of October 1, 2011.  While this may not impact the Charlotte region this year,  most experts agree that Charlotte area’s conforming loan limits could also go below $417,000 at some point in the forseeable future.

To learn more about the administration’s direction for “reforming America’s housing finance market” you can read their recent press release:
http://www.treasury.gov/press-center/press-releases/Pages/tg1059.aspx.

So no matter “how you slice it,” the longer you wait to purchase a home, the more it will cost you!

Want more information about buying a home? Contact Carolinas Realty Partners!

The tax deduction for mortgage insurance that was set to expire has been extended through 2011. So if you are paying insurance on your home mortgage here are some things you need to know to qualify for the mortgage insurance deduction this year:

• If your adjusted gross income is no more than $100,000 you may be able to deduct 100% of mortgage insurance premiums you pay in 2011.
•  But if your income is more than $100,000 you may take a partial deduction.
• You must have purchased your home between January 1st, 2007 and December 31st, 2010.
• If you’ve just recently purchased your home and have pre-paid your insurance premium, you may deduct this entire amount.
• Second homes are not eligible for deductions; you can only deduct mortgage insurance premiums on a primary residence.

If you itemize on your tax return, don’t forget that you are eligible for other deductions related to home ownership, such as loan origination fees, property taxes, mortgage interest paid. As always, you want to consult with a tax professional.

Some important real estate news worth paying attentions to:

• Mortgage rates jumped for the fourth straight week and have hit their six month highs. This is somehow happening “under the radar” and lots of home buyers who were approved at very low rates who haven’t yet purchased a home, will get a bit of sticker shock surprise when they do. Keep in mind that each 1% increase in mortgage rates, on average, increases your monthly payment by about 10%.
• Fannie Mae and Freddie Mac have announced that they will freeze foreclosure evictions from December 20th through January 3rd for occupied homes. If you are facing foreclosure, clearly this is positive news for the holiday weeks.

Looking for more updates on real estate in the Charlotte, Waxhaw and Fort Mill areas? Contact Carolinas Realty Partners.

Great news this week from Charlotte mortgage lenders, Cunningham & Company, that the North Carolina Finance Agency announced its  NC Foreclosure Prevention Fund is going live  in 17 pilot counties and will be available in all North Carolina counties by December 1st.

This program applies to anyone in North Carolina with a mortgage on a primary residence and will offer assistance in helping home owners facing foreclosure pay their mortgage. For more information about the NC Foreclosure Prevention Fund. Or, call their Information Center at 888-623-8631.

North Carolina offers a number of foreclosure assistance plans. Typically, the minimum requirements to qualify for one of the plans are:

•you are the property owner of the home and you live in your home
•your primary residence is in North Carolina
•you have lost your job or experienced a reduction in income through no fault of your own, or are facing a temporary financial hardship such as a divorce, serious illness, or death of a co-signor
•you have good mortgage payment history prior to your recent unemployment or income loss
•you are a legal U.S. resident

Find out if you are eligible.

Don’t hesitate to contact Carolinas Realty Partners or the ValeoCroy Team with Cunningham & Company Mortgage Bankers  in the Charlotte metro area or the if you need assistance or have questions about foreclosures.

If you are interested in buying a foreclosure home today, you need to be aware that the process is much more complicated due to the bank foreclosure freeze than it was even one month ago. Here are three issues to be aware of in the coming weeks and months while the banks who’ve frozen foreclosure sales sort out their paperwork:

• If you are in the process of making an offer on a foreclosure home or plan to make an offer shortly, don’t expect to get a response from the bank immediately and don’t expect to be able to close on the home in the typical 30-45 day time frame. So if you have a deadline by which time to need to purchase a home, buying a foreclosure home might not be the best option for you.
• Ensure up-front that you can rescind your offer at any time at no penalty to you if the bank takes too long to respond to your offer and you wish to move on to another property. Your agent can help determine what, if any penalties may be in the bank’s contract addendum that might affect your ability to pull out of the contract.
• If you are already in a contract to purchase a foreclosure home, do not move out of your current home until you know for sure when you will be able to close on your foreclosure purchase! Again, you may need to wait it out for weeks, if not several months and you don’t want to end up homeless. If your mortgage loan commitment has an expiration date or you have locked in your interest rate with an expiration date, now is a good time to start talking to your lender to ensure your mortgage will be available when you are ready to close.

It’s worth reading a great article from SmartMoney.com on navigating the foreclosure freeze. And keep in mind if you need any help with navigating the foreclosure home market in the Charlotte/Waxhaw/Matthews/Fort Mill metro areas, Carolinas Realty Partners are here to help!

A quick update to my blog yesterday about the impact of the foreclosure freeze on your ability to purchase a foreclosure home in the near term–as of today, attorneys general from all 50 states have put on a “bi-partisan multistate group” to investigate if faulty procedures were used to sign foreclosures which lead to evictions.  Rigth now there is lots of uncertainty about how this will impact foreclosure sales, but it’s reasonable to assume that in the short run there will be more questions than answers as the major lenders start reviewing their paperwork. Clearly, this all spells big trouble for lenders, the economy, and homeowners and buyers. The impact on home values and prices remains to be determined. I’m enclosing a link to a video where, Tara-Nicholle Nelson, Consumer Housing Specialist for real estate site, Trulia.com, explains the impact this has on homeowners who’ve been through the foreclosure process or may be facing foreclosure.

Need more information about what’s happening in the Charlotte, NC and Fort Mill, SC housing markets and foreclosures, contact Carolinas Realty Partners.

By now, you can’t help but have heard about the foreclosure sale freezes by major financial institutions like Bank of America, JP Morgan Chase, GMAC, PNC, etc. If more banks follow the lead of these four institutions, we could effectively have a national foreclosure moratorium (we know that foreclosure proceedings have been stopped in at least 23 states right now and could spread quickly to 40 states)!

Allegations of possible mortgage fraud including forged documents, faked social security numbers, phantom titles, robo-signers, disappearing paper trails are what gave rise to this freeze in foreclosure sales. It’s anyone’s guess how long it will take to resolve, as mortgage lenders will need to review paperwork for hundreds of thousands of mortgages.Legal challenges from class action suits and states attorney lawsuits will delay the process even further. Here’s a concise 5 minute video of why there are big risks in buying foreclosed homes right now.

What are some of the short and medium term implications:

• In the immediate term, if you are in a contract to purchase a foreclosed home and have a loan with a locked-in interest rate, you might not be able to close on the home.
• In the short term, homeowners facing foreclosure will have some breathing room and might even be able to save up some money to catch up on delinquent mortgage payments.
• In the longer term, the housing recovery might well be stalled and the crisis could continue for several more years.
• Even though the banks insist that most of the foreclosures were on homes legitimately behind on payments, with many of the foreclosure processes being deemed fraudulent, it means the original foreclosures would be nullified and banks would have to start all over again.

For more information about what is happening in the Charlotte, North Carolina and Fort Mill, South Carolina metro areas, contract Carolinas Realty Partners.

Charlotte has long been known for its reasonable cost of housing and living. In fact, Charlotte has been below the national average for cities of similar size for many years. And for a number of years, North Carolina (which includes Charlotte!), has been ranked as one of the only three states where average closing costs are at least 25% below the national average as ranked by Bankrate.com. On a $200,000 mortgage, the national average for closing costs is $3,741. In North Carolina, the average is $3,255.  See a breakdown of North Carolina’s mortgage closing costs.

Here’s a great video about closing costs and what to expect when you take on a mortgage from Bankrate.com.

See where your state ranks in terms of closing costs.

Here’s a great consumer guide from the Federal Reserve Bank about mortgage closing/settlement costs. And if you like to play with numbers and do some of your own calculations, here’s a great calculator tool.

Want more information about buying a home in Charlotte and what costs may be involved, contact Carolinas Realty Partners.

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.