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

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.

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.

We are now enjoying some of the best interest rates in almost 30 years. It’s a great time to buy a home. And keep in mind that every 1/2% increase in interest rates equals a $5,000 increase in the price of a home on a $200,000 mortgage! Below is a recap of interest rates for 30 year fixed rate mortgages… see for yourself why current rates make NOW a great time to buy a home in Charlotte (or anywhere for that matter). With both interest rates and home prices at their lowest levels in years you’ll save thousands! Need help finding that dream home and getting a mortgage? Contact Carolinas Realty Partners.

30 year Average Fixed Rates

1972    7.38%

1973    8.04%

1974    9.19%

1975    9.04%

1976    8.87%

1977    8.84%

1978    9.64%

1979   11.19%

1980   13.77%

1981   16.63%

1982   16.08%

1983   13.23%

1984   13.87%

1985   12.42%

1986   10.18%

1987   10.20%

1988   10.34%

1989   10.32%

1990   10.13%

1991   9.25%

1992   8.40%

1993   7.33%

1994   8.36%

1995   7.96%

1996   7.81%

1997   7.60%

1998   6.94%

1999   7.43%

2000   8.06%

2001   6.97%

2002   6.54%

2003   5.82%

2004   5.84%

2005   5.87%

2006   6.41%

2007   6.34%

2008   6.04%

2009   5.04%

TODAY’S FIXED 30-YEAR RATE: 4.25%

 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.