Real Estate

The Value of Home Maintenance

2011-09-06T13:00:00.001-05:00

The Value of Home Maintenance
Regular home maintenance is key to preserving the value of your house and property. Read

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3392 Lake Oak Ridge Drive!

2009-07-22T13:22:00.001-05:00

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First Time Homebuyer Tax Credit!

2009-02-27T12:16:00.000-06:00

First-time Homebuyer Credit: According to an IRS news release, taxpayers who qualify for the Section 36 first-time homebuyer credit and purchase a home before 12/1/09 can claim the credit on their 2008 tax returns due on 4/15/09 or on their 2009 tax return filed next year. Following changes by the recently enacted American Recovery Act, they do not have to repay the credit, provided the home remains their main home for 36 months after the purchase date. They can claim 10% of the purchase price up to $8,000, or $4,000 for married individuals filing separately. However, the new law does not affect people who purchased a home after 4/8/08 and before 1/1/09—the maximum credit remains 10% of the purchase price, up to $7,500 or $3,750 for married individuals filing separately, and the credit must be repaid in 15 equal annual installments beginning with the 2010 tax year.

Interest Rates and Points

2009-01-16T15:06:00.001-06:00

Some lenders are willing to negotiate on both the loan interest rate and the number of points. Most established lenders set their rates like large corporations set the prices on their goods. However, it pays to shop around for loan rates and know the market before you talk to a lender. When shopping for rates, look for published rates in local newspapers or check the growing number of Internet sites that publish such information.
Locking in a mortgage rate with a lender is one way to ensure that same rate will be available when you need it. Lock-ins make sense when borrowers expect rates to rise during the next 30 to 60 days, which is the usual length of time lock-ins are available. A lock-in given at the time of application is useful because it may take the lender several weeks or longer to prepare a loan application (though automated loan practices are cutting this time dramatically). However, some lenders require borrowers to pay lock-in fees to assure particular rates and terms. Be sure to check that the rates and points are guaranteed and that your lock-in period is long enough. If your lock-in expires, most lenders will offer the loan based on the prevailing interest rate and points. Lenders may have preprinted forms that set out the exact terms of the lock-in agreement. Others may only make an oral lock-in promise on the telephone or at the time of application.
Price discounts and interest rate buy downs are common incentives offered by new-home builders trying to overcome slow sales. Buy downs are a financing technique used to reduce the monthly payment for the borrower during the initial years of the loan. Under some buy down plans, a residential developer, builder or the seller will make subsidy payments (in the form of points) to the lender that "buy down," or lower, the effective interest rate paid by the home buyer. State agencies often offer lower rate loans. But to qualify, borrowers usually must be a first-time home buyer and meet income limits based on the median income level of their county.

What Affects My Credit Score?

2008-11-17T14:48:00.008-06:00

1. IS IT TRUE THAT RUNNING CREDIT REPORTS CAN REDUCE YOUR SCORE?

Fico.com states that it doesn’t if it is a same industry report. Experience tells me differently. The good news, if it is less than 3 in a 90 day period, it doesn’t change it at all. If you run 15 in one week you will lose 2-4 points for each report run.

2. HEY, I KNOW MY SCORE; I RAN IT ON THE INTERNET. ISN’T IT THE SAME?

Not so much. The online version is close to the real thing, but not quite. If you really need to know, have someone in the mortgage industry run it.

3. I HAVE BEEN WORKING ON MY CREDIT. WILL MY SCORE EVER IMPROVE?

Late pays affect the score by the number of lates, how long they were late, and more importantly, how recent were they. It is hard to quantify the damage multiple lates have on score. If the lates have been more than 2 years, they have a much smaller affect on the score.

4. IF YOU HAVE HAD PERFECT CREDIT ALL OF YOUR LIFE, WILL YOU HAVE A PERFECT SCORE?

Nope! One of the worst calculations that go into credit scoring is the ratio of credit used versus the credit limit. The closer you get to 100% of your credit limit, the more points you will lose.
A card with a $100 limit and a $99 balance will lose you about 15-18 points. If that same card has $101 on it, you will lose about 25 points. Throw on a past due, and now you are talking about some serious points.

Ideally, you would never want your balance to exceed 50% of your limit.

5. SHOULD I CLOSE OUT MY OLD CARDS TO GET A HIGHER SCORE?

Again, NO! If you want a higher score, go out and use those cards just a little bit. Put $20 on a $1000 card will score some points.

The longer you have had a card or loan, the more it adds to your score.

6. HOW DO I GET A PERFECT SCORE?

I don’t know. I have run thousands of reports and have never seen an 850.
Other than the obvious (paying everything on time) and keeping credit balances less than 50% of the limit, time. I have only seen one score of 847. She had credit established for 30+ years, no lates and minimal balances on credit. To top it off, she was a real estate agent.

By: Tom Renshaw, Century 21 Mortgage Advisor

Why Real Estate is the Best Investment a Consumer Can Make!

2008-11-14T10:39:00.000-06:00

In a time when the financial market is so volatile, investing in real estate is one of the smartest moves a consumer can make. Whether it be purchasing a primary residence or a property for investment as a rental unit, one would be wise in taking advantage of the opportunity to own real property.
First of all, real estate is tangible. You can touch it, feel it, possess it. This cannot be said for stocks or bonds. However, that is not to say that one should cash in all of their intangible financial investments and buy up all the property they can find; rather, investing in real estate is a fantastic way to diversify your portfolio. And if you are purchasing your primary residence, it serves a dual purpose of providing a roof over your head, which is a basic need that every person requires anyway!
Secondly, real property generally increases in value over time. Over the last three decades, the median sales price for a home has increased an average of 3% to 6% each year (“Why Home Ownership is Worth It,” Alabama Homebuilder, Summer 2008). Therefore, as long as one owns his or her property for long enough to gain some equity then the odds are in his favor that a financial gain will be made at the time of sale.
Thirdly, interest rates are still at all-time lows. I, as well as a few agents in my office that have been in the business long enough, remember interest rates reaching well into double-digits in the 1980’s. Just the other day, when we were on property tour, one of these more seasoned agents pointed to a house and said, “I sold that house at a 17% interest rate in the 80’s.” How remarkable! With rates fluctuating between 5% and 7%, a consumer should be jumping at the chance to purchase real property. Just to be clear, this is not to say that now is a bad time to sell either. On the contrary, depending on the equity you have in your home and how long you have owned it, you still stand to gain a profit; and, if you turn around and reinvest this money in other real estate then you will continue to reap the benefits of real estate investment in the future.
Fourthly, knowing your fixed costs helps you budget. Landlords are free to raise rent regularly, whereas if you have a fixed-rate mortgage your payments will stay the same throughout the life of the loan. Therefore as your income increases over the years you won’t have to worry about paying more for your home and can make better use of your disposable income in other ways.
Lastly, home owners are afforded tax breaks. In general, property taxes and the interest on one’s mortgage payment can be deducted from one’s taxable income. Also, in Alabama if one resides in the property for two out of five years, when he or she (or they) sells the property the profit made from the sale is tax-free (when the value of the home is up to $250,000 singly or $500,000 jointly).