1. Lower Rate.

One method is to seek out a lower interest rate for the balance of $175,500. By lowering the interest rate to 7%, but maintaining the current payment schedule (20 more years of payments in the above example) your payment would drop to about $1,361 and the loan would still be retired at the original 30-year mark.

2. Longer Term.

Another way to lower your payment would be to prolong the length of the amortization. For instance, by getting a new 30-year mortgage for $175,500 at the 10-year mark, your payment would drop to $1,167 (at 7%).

3. Cash Out.

Some homeowners pull equity out of their properties for home improvement, vacation, college costs, big-ticket purchases or to consolidate debt. Especially when interest rates are rising or stable, cashing-out is often the primary reason for refinancing.

4. Change Loan Type.

Other folks refinance in order to change the type of loan they are paying off. Some homeowners grow uncomfortable with the variability of adjustable-rate mortgages and would rather have a fixed-rate loan. Others need to reduce monthly expenses and choose an adjustable-rate loan to lower their payment.

5. Shorter Term. The rates are still around 4%

Sharpen Your Pencils!
Determining how much you can afford to finance in today’s market requires careful consideration and a bit of math. If you are thinking about refinancing an existing mortgage or buying a home, use these charts to help you plan. Then call us, so we can answer your questions and help you take the next step!
Monthly Payment: How much can you afford?
Lenders will usually allow you to spend 28% of your total–or gross–monthly income to make mortgage payments of principal, interest, taxes and insurance. The table below shows how much 28% is at various income levels.
Annual Income	Gross Monthly Income	Affordable Monthly Payment**
$20,000	$1,667	$467
$25,000	$2,083	$583
$30,000	$2,500	$700
$35,000	$2,917	$817
$40,000	$3,333	$933
$45,000	$3,750	$1,050
$50,000	$4,167	$1,167
$60,000	$5,000	$1,400
$70,000	$5,833	$1,633
$80,000	$6,667	$1,867
$100,000*	$8,333	$2,333
*For incomes over $100,000, add together the two appropriate columns.
Loan Amount: How much can you plan to borrow?
Once you know how much you can afford monthly, use this table to estimate how much you can borrow. Add your down payment to get an approximate house-hunting price range.
Monthly Payment**	5%	7%	9%	11%
$467	86,995	70,194	58,040	49,038
$583	108,603	87,630	72,457	61,219
$700	130,399	105,216	86,998	73,505
$817	152,194	122,802	101,539	85,791
$933	173,803	140,237	115,956	97,971
$1,050	195,598	157,823	130,497	110,257
$1,167	217,393	175,409	145,038	122,543
$1,400	260,797	210,431	173,995	147,009
$1,633	304,201	245,453	202,953	171,476
$1,867	347,791	280,625	232,035	196,047
$2,333	434,599	350,668	289,951	244,980
**Principal and interest only; taxes, insurance and any homeowner fees not included. These will raise your monthly payment and reduce the amount of principal and interest and total loan amount you can afford. Loan amounts are based on a 30-year fixed-rate mortgage. For incomes over $100,000, add together the two loan amounts and add your down payment.

Yet another reason for refinancing is to shorten the term of your current mortgage. If your income has grown substantially and you’re happy living in the same home, you could reduce the length of your loan by simply refinancing to a shorter-term mortgage with a smaller balance but higher payment. Using the above example again, a $175,500 loan paid off in 15 years at 8% would cost you $1,677 each month (about $200 more than for the original loan), but the loan would be paid off relatively quickly–saving you thousands of dollars in interest payments.
Whatever you decide, be sure to weigh the costs of refinancing carefully. A lower monthly payment may help your cash flow, but is it going to cost you too much up-front to make sense? Be sure you’ll live in the home long enough to recoup the expenses associated with refinancing–points, closing costs and fees.

They provide another investment that includes a mortgage-interest tax deduction.

Whether you rent it out or not, you can deduct the mortgage interest as long as you use the home more than 14 days or more than 10% of the number of days the home is rented annually at a fair rental, whichever is longer.

Qualified second homes include houses, condominiums, cooperatives, mobile homes, house trailers, boats or similar properties that have sleeping, cooking and toilet facilities.

Here’s an interesting twist on the mortgage interest deduction: If you take out a home equity loan on your first home and use the funds to acquire your second home, the interest on the home equity loan is also deductible. That’s three mortgage interest deductions off your tax return!

Consult IRS Publication 936 for a complete discussion of how mortgage interest for a second home is deductible.

You can purchase your future retirement home in Wilmington NC now, at today’s prices.

Though your second home may be a vacation home now, if you buy right you can convert it into your principal residence later.

They can produce their own income.

Renting out a second home occasionally or often can help you pay for the property with OPM (other people’s money). Check with your tax advisor about how much of the upkeep and management expenses are deductible against your income.

Buying Tips From The Experts

Buy something within a reasonable distance.

Be sure you can get to your vacation home in a short amount of time. Before you make a final decision, travel the distance on a typical Friday afternoon to see whether the drive will be too much to deal with after a long work week.

Rent in the area several times before you buy.

If you really like a particular area, check it out during different seasons. This way you get to know the climate, people, pests, traffic patterns and other regional particulars first-hand.

Consult other owners.

Check with owners of nearby properties about public and private facilities, special maintenance required due to location or weather, the social climate, local development plans and prevalence of crime. Learning about the lifestyle of the area may help you narrow down your choices.

Think home first, investment second.

Although you may be able to generate rental income from your vacation home, it may not cover your ownership costs. (If you want to try real estate investments, give us a call to look at properties in the Wilmington NC  local area.)

Consider different styles of properties in a vacation area.

To minimize upkeep and have a more secure environment, a condo may be preferable to a single-family home. If you plan on converting it to a retirement home, consider what type of home you’ll want as a full-time residence.

Here are some of the current Wilmington NC real waterfront/waterview real estate  in our area.

Priced from 100,000 – 200,000  Click here

Priced from 200,000- 400,000  Click here

Priced from 400,00 -600,000  Click here

Priced from 600,000 – Click here

To search all properties please visit www.cbbaker.com

May and June are usually some of our biggest months when it comes to home sales. Our pending index is climbing; you can see our mountain tops when you look at the sold units, now go and look at the chart you will see the mountain peaks during the summer season.

Economically – Our congress will be working on our current debt ceiling? Do they raise it? Other areas are slow to come around, inflation is trying to work its way back in while employment numbers are looking better each month. Unemployment rose back up to 9.0%. Hopefully we will come out of this economic funk real soon; this current economic crisis has affected so many lives and financial interests of individuals as well as companies.

April just stole all our gains for March with a decrease in sold homes and average sales price.  The average sold price dropped to $206,698 a 14.9% loss over last month. Our sold units hit 383 a large decrease from last month. Sold units are down 33 units from last month and up 52 from April 2009. One point to keep in mind is that last year this time we were still dealing with the First Time Homebuyers Tax Credit. In the month of April we saw an increase of 40 homes in our listing inventory, we have 4,887 homes on the market as of May 1^st. This adjusted our month’s supply with just over 12.7 months a slight increase from last months 11.8. With the low sales in April this affects our month supply. Our average list price has started the year under $350,000 range; we are currently at $349,067. In April sellers paid concessions in about 30.0% of all the month’s transactions about the same as last month. Our average days on the market decreased to 148 days – we are now talking 5 months on the market. The list to sold ratio has increased a little to 93.8% this number needs to continue to get better. The number of homes that sold in 15 days or less continues to remain very low, 8.6% of April sold homes. The 30-year fixed-rate mortgage (FRM) averaged 4.63% with an average 0.7 points for the week ending May 12, 2011. We have seen decreases the last 5 weeks. Call me so I can show you or your clients how they can get the benefit of these rates. Have a great week and let me know what I can do to help you and your clients.

Despite all the media comments about our markets we are still lending money for residential mortgages. If a client has income and credit and some sort of down payment; they can get a mortgage. It goes to the basic three C’s – Capacity, Collateral and Character.

For the complete Inventory update and graphs read more here…

Source – David Flory Cunningham Mortgage

Based on the winter weather we have had it is obvious that our real estate market still has the Winter Blues. Our average sales price has dropped 17% from December 2010; that is quite a fall. Most of the transactions that closed in January we put under contract in December. When you break down the sales that took place in January 2011 there is only 1 transaction that closed above $700,000. While in December 2010 there were 14 sold transactions over $700,000 and January 2010 there were 5 sold transactions over $700,000. This greatly affects our monthly average sales price, our current monthly average sold price is $194,425 for the month of January. This is the first time that the monthly average sold price has dipped under $200,000 in a looooong time.

January’s average sales price has managed to show a decrease of 17% from December. Sold units are down 119 units over last month (about 31%) and even with last January. In the month of January we saw a increase of 71 homes in our listing inventory, we have 4,718 homes on the market as of February 1^st. This continues to put us in a strong buyer’s market with a listing inventory of just over a 17.8 month supply. With the low sales in January this affects our month supply with an increase of 5 months from last month with 12.6. Our average list price has started the year under $350,000 range; we are currently at $343,053. In January sellers paid concessions in about 30.6% of all the month’s transactions.  Our average days on the market are at 132 days. The list to sold ratio has improved some to 94.4% this number needs to continue to get better. The number of homes that sold in 15 days or less continues to remain very low, 11.3% of January sold homes. The 30-year fixed-rate mortgage (FRM) averaged 5.05% with an average 0.7 points for the week ending February 10, 2011. We have already hit the historic lows in mortgage rates and they are now on the rebound. Call me so I can show you or your clients how they can get the benefit of these rates. Have a great week and let me know what I can do to help you and your clients.

Despite all the media comments about our markets we are still lending money for residential mortgages. If a client has income and credit and some sort of down payment; they can get a mortgage. It goes to the basic three C’s – Capacity, Collateral and Character.

Listing Inventory

In January we saw a increase in listing inventory of 71 units. We are about 496 units under February 1, 2010 and 687 units under February 1, 2009. We have 4,718 single family homes for sale in our MLS. The average list price of $343,053 is down by $5,950 from last month. Please note the consistent winter dip in listings – see chart below.

Monthly Average Sold Price – this is not a pretty section

Our monthly average sold price is down by 17% from last month and down 9.7% from January 2010. Our average sold price is down by $39,939 from last month. January average sold price ($194,425) shows a decrease of 15.9% from year end 2010.

Monthly Sold Units

We are 2 units shy of matching January 2010 sold homes of 267, while this January we have sold 265 homes. I am sure as January gets closed out we will see the numbers increase over last year’s production. The number of sold homes is up 68 homes from January 2010.

Average Sold Price Year to Date

Year over year our year to date numbers have dipped a little.

2003 year end average sale price $ 186,137

2004 year end average sale price $ 210,048

2005 year end average sale price $ 254,080

2006 year end average sale price $ 264,498

2007 year end average sale price $ 273,408

2008 year end average sale price $256,498

2009 year end average sale price $234,379

2010 year to date average sale price $231,141

While our 2010 year end numbers are lower than year end 2009 they do show promising signs that our sales are on the upswing. Looks like we have a setback with January’s average sold price – $194,425

Rolling 12 months

Our rolling 12 months gives us a better look at our production. It helps to smooth out a month that jumps up and down. When we look at February 1^st, 2010 to January 31^st, 2011 we have 4,526 sold units and when we compare the year prior February 1^st, 2009 to January 31^st, 2010 we have a 87 unit gain (4,439 sold units). When we look at the same rolling 12 months for average sold price we see that we are only down by 2.0%. So the dates of 2/1/2010 to 1/31/2011 we have an average sold price of $229,930 while from 2/1/2009 to 1/31/2010 we had an average sold price $233,436.

Median Sold Price

Our Median sold price decreased this month by 12.5% from last month. Our national numbers lag by one month. Our median sales price continues its jagged path – up then down then up and now down. I am hoping that our January dip in median sold price is a onetime event. I am hoping we can see the national median sales price reverse its downward trend as well as WRAR’s.

Pending

Pending Sales – A sale is listed as pending when the contract has been signed but the transaction has not yet closed. Sales are typically finalized within one to two months from signing. With the new sales contract I am also counting Active Due Diligence and pending contracts. I look at the total pending units on a regular basis and this is how they chart out. Our pending index is dropping to our winter lows. In December we bottomed out about 575 units, we have since rebounded and have over 663 units that are pending – this is a 15% increase since the end of 2010.  With the new contract in place this is a good start to 2011.

Market Absorption rate – The number of homes sold in January, 265 divided by the current listing inventory, 4,718 gives us a 17.8 month supply of single family homes. This increased by 5 months from last month. We need to get this inventory back under 12 months supply. With a large inventory and the low sales in January this affects our market absorption. With rates where they are and plenty of inventory; we can get this number down.

List to Sold price ratio – the average list price of the sold properties is $206,188 and the average sold price is $194,425 for January which gives us a 94.4% list to sold price ratio – a good increase from last month. We have now managed to stay under 95% for over a year and several months. I want to quit counting the number of months and get this trend reversed.

Seller Concessions – We had 30.6% of sold properties report a sales concession for January, a increase of 4.2%. We want this number to go lower.

Days on Market – The average days on market for the sold properties is now at 132 for January. That is about 4.5 months to keep a property on the market. Only 11.3% of the properties were placed under contract in less than 15 days for the month of January.

Carolina & Kure Beach

There are currently 387 single family homes for sale and this represents little change from January 1, 2011 and 8.2% of our total WRAR inventory. The average list price is $390,006 and decrease of about $12,624 from January. In January there were 21 homes sold, divide that by the homes available and you have a 18.4 monthly supply of homes in Carolina and Kure Beach. The average sold price for the month of January was $230,953 and is down $37,893 from last month. When we look at a rolling 12 months for Carolina & Kure Beach we are up by 61 units and our sold prices are down 7.1% from the previous rolling 12 months.

This data was pulled on February 12, 2011, based on information from the Wilmington Regional Association of REALTORS Incorporated, for the period Jan. 1, 2005 through January 31, 2011.

The Market

Primary Mortgage Market Survey Press Release

30-Year Fixed-Rate Mortgage Rates Rise to 5.05 Percent Highest Level since April 2010

Freddie Mac released the results of its Primary Mortgage Market Survey®  which shows long- and short-term rates rising this week.

News Facts

30-year fixed-rate mortgage (FRM) averaged 5.05 percent with an average 0.7 point for the week ending February 10, 2011, up from last week when it averaged 4.81 percent. Last year at this time, the 30-year FRM averaged 4.97 percent.

15-year FRM this week averaged 4.29 percent with an average 0.7 point, up from last week when it averaged 4.08 percent. A year ago at this time, the 15-year FRM averaged 4.34 percent.

Average commitment rates should be reported along with average fees and points to reflect the total cost of obtaining the mortgage.

Quotes

Attributed to Frank Nothaft, vice president and chief economist, Freddie Mac.

“Long-term bond yields jumped on positive economic data reports, which placed upward pressure on mortgage rates this week.

“For all of 2010, nonfarm productivity rose 3.6 percent, the most since 2002, while January’s unemployment rate unexpectedly fell from 9.4 percent to 9.0 percent. Moreover, the service industry expanded in January at the fastest pace since August 2005.

“As a result, interest rates on a 30-year fixed-rate mortgage rose to the highest level since the last week in April 2010.”

Freddie Mac

Source:  Wilmington MLS and David Flory Cunningham Mortgage

view Wilmington NC real estate on www.cbbaker.com

The NAR states that the “existing-home sales1, which are completed transactions that include single-family, townhomes, condominiums and co-ops, jumped 10.0 percent to a seasonally adjusted annual rate of 4.53 million in September from a downwardly revised 4.12 million in August, but remain 19.1 percent below the 5.60 million-unit pace in September 2009 when first-time buyers were ramping up in advance of the initial deadline for the tax credit last November.”

Lawrence Yun, NAR chief economist, said the housing market is in the early stages of recovery. “A housing recovery is taking place but will be choppy at times depending on the duration and impact of a foreclosure moratorium. But the overall direction should be a gradual rising trend in home sales with buyers responding to historically low mortgage interest rates and very favorable affordability conditions,” he said.

According to Freddie Mac, the national average commitment rate for a 30-year, conventional, fixed-rate mortgage fell to a record low 4.35 percent in September from 4.43 percent in August; the rate was 5.06 percent in September 2009.

The national median existing-home price2 for all housing types was $171,700 in September, which is 2.4 percent below a year ago. Distressed homes3 accounted for 35 percent of sales in September compared with 34 percent in August; they were 29 percent in September 2009.  Ten years ago, the mortgage rates were twice what they are today and the home prices were at least 20% more, making this a great time to purchase Wilmington NC real estate.  Please visit www.cbbaker.com to search all Wilmington NC area homes, land and boatslips.

Have you ever thought about buying a fixer upper property in Wilmington NC but were overwhelmed with the costs of renovation and the cost of the purchase of the home?  There is a FHA loan program that not many people know about.  It is the FHA 203k loan program that allows the homebuyer to add the renovation costs into the loan amount and only pay a down payment of 3.5%. Investors are not allowed to use this program.

The program has been around since 1978, but not many people know it exists.  The homes don’t have to be falling apart, they could need updating.  The real estate would have to appraise under market value and then at market value with the repairs added in.  You also can get this financing on a principle residence if you are buying a short sale or foreclosure.  So….. call us to start looking for Wilmington NC real estate and fix up the home the way you want it.  Please view http://www.cbbaker.com/ for all your real estate needs whether buying or selling.  We can help you get started with a lender as well.  Perfect time to buy a home.

Kay Baker Google Map QR code

My Google coupon is a QR code and will take you directly to my Google Places and you will be able to access my profile on Google maps.

Maybe soon, we could put codes on For Sale signs and buyers can access information with one scan.  Technology is changing the way we do business.

The Cost of Living Index measure differences in costs of services and consumer goods for middle class standard of living.  314 urban areas in the US participated in the study.  The study is conducted over a 3 day period, covering 90,000 prices of 60 different items.   The Greater Wilmington Chamber of Commerce posted the following chart detailing the scores compared to other Southern cities.

Click on chart for larger view.

Considering a home with a loan amount of $220,000 at today’s rate of 4.25% for a 30 yr. fixed loan.  The payment for that loan amount at 4.25% would be $983.87. If you wait, and  the rates were to go back to the April 2010 level of 5% , the same payment of $983.87 would only allow you to borrow $201,605.14. You have lost $18,395.00 in purchasing power.
This does not even take into consideration that the market should be improving and the price of the home you want could be increasing.
Most will say it will take a while for the rates to return to 5%. But remember, that it was only in April of this year that they were at 5%,  rates increase twice as fast as they decrease.

Information furnished by Daniel Downing Prime Lending Wilmington NC 538-6473.

Loan Amount    Rate        Payment        Rate    Loan Amount
9/24/10                4/23/10
$200,000.00    4.25%        $983.87        5.00%    $183,276.00
$210,000.00    4.25%        $1,033.07        5.00%    $192,441.95
$220,000.00    4.25%        $1,082.26        5.00%    $201,605.14

4/23/10                9/24/10
$200,000.00    5.00%        $1,073.64        4.25%    $218,246.83
$210,000.00    5.00%        $1,127.32        4.25%    $229,159.11
$220,000.00    5.00%        $1,181.00        4.25%    $240,071.51

Listing Inventory
In August we saw a decrease in homes for sale of 37 units. We are about 131 units over September 1, 2009. We have 5,567 single family homes for sale in our Wilmington MLS. The average list price of $374,121 is down by $2,931 from last month. The average list price has decreased by 6.9% from September 1, 2009.

Monthly Average Sold Price
Our monthly average sold price is up by .01% from last month and up 1.9% from August 2009. Our average sold price is up by $2,252.00 from last month. August average sold price ($238,258) shows an increase of 1.7% from year end 2009. Our average sold price is up by $4,369 over last August.

Monthly Sold Units
This month’s decline in the number of homes sold when compared to previous year is only down 3 units. The number of sold homes is up 7.8% from last month and down .01% from August 2009. Last month we had 358 sold units and this month 386 sold units, last year in August we had 390 sold units. Due to the First Time Home Buyer increase in sales, a lot of these sales were pushed up and people that might have been planning to buy in July and August moved up their purchase to coincide with the tax credit. I think we are just getting ready to come out see our sales pick back up to a normal level.

Average Sold Price Year to Date
Year over year our year to date numbers have dipped a little.
2003 year end average sale price $ 186,137
2004 year end average sale price $ 210,048
2005 year end average sale price $ 254,080
2006 year end average sale price $ 264,498
2007 year end average sale price $ 273,408
2008 year end average sale price $256,498
2009 year end average sale price $234,379
2010 year to date average sale price $229,073
While our current year to date numbers are lower than Year End 2009 they do show promising signs that our sales are on the upswing. The first eight months of 2010 has a 363 sold unit gain over first eight months of 2009. The average sales price is down 1.5% for the first eight months of 2010 than the first eight months of 2009. Our median sales price is just 1.2% behind 2009.

Rolling 12 months
Another bright spot is the rolling 12 month numbers. When we look at September 1st, 2009 to August 31th, 2010 we have 4,731 sold units and when we compare September 1st, 2008 to August 31th, 2009 we have a 727 unit gain (4,004 sold units). When we look at the same rolling 12 months for average sold price we see that we are only down by 1.9%. So the dates of 9/1/2009 to 8/31/2010 we have an average sold price of $231,880 while from 9/1/2008 to 8/31/2009 we had an average sold price $236,367.
Median Sold Price
Our Median sold price is up 2.0% from last month, about $193,327. While we have not dipped as low as the National Median we seem to have turned the corner while the national median is showing a slight increase. I would anticipate over the next couple of months to continue to see this median increase.

Pending
Pending Sales – A sale is listed as pending when the contract has been signed but the transaction has not yet closed. Sales are typically finalized within one to two months from signing. I look at the total pending units on a regular basis and this is how they chart out. We saw our peak pending numbers about May 3rd. We are actually down 4.1% from last month and we are down just 21.6% from September 11, 2009. With the tax credit benefits expired it will be interesting to see if our sales can improve going into late summer and early fall.

Market Absorption rate – The number of homes sold in July, 386 divided by the current listing inventory, 5,567 gives us a 14.4 month supply of single family homes. This decreased by 2.0 months from last month. We need to get this inventory back under 12 months. With rates where they are and plenty of inventory; we can get this number down.
List to Sold price ratio – the average list price of the sold properties is $254,579 and the average sold price is $238,257 for August which gives us a 93.6% list to sold price ratio – a decrease of 1.2% from last month. We have now managed to stay under 95% for over a year.
Seller Concessions – We had 24.1% of sold properties report a sales concession for August, an increase of 2.4%. We want this number to go lower.
Days on Market – The average days on market for the sold properties is now at 135 for August. That is about 4.5 months to keep a property on the market. Only 13.0% of the properties were placed under contract in less than 15 days for the month of August.
Carolina & Kure Beach
There are currently 485 single family homes for sale and this represents a 14 unit decrease over September 1, 2010 and 8.7% of our total WRAR inventory. The average list price is $411,327 and decrease of about $13,672 from August. In August there were 31 homes sold, divide that by the homes available and you have a 15.6 monthly supply of homes in Carolina and Kure Beach. The average sold price for the month of August was $273,731 and is up $1,119 from last month. When we look at our rolling 12 months September 1, 2009 to August 31, 2010 we have 328 homes sold at an average price of $287,459. While September 1, 2008 to August 31, 2009 we had 242 homes sold at an average price of $318,107.
This data was pulled on September 12, 2010, based on information from the Wilmington Regional Association of REALTORS Incorporated, for the period Jan. 1, 2005 through August 31, 2010.
The Market
Mortgage rates finished mixed this week, according to Freddie Mac weekly survey
McLean, VA – Freddie Mac released the results of its Primary Mortgage Market Survey. While the 30-year fixed-rate mortgage rate and the 5-year adjustable rose slightly, other rates remained flat or fell lower.
News Facts
30-year fixed-rate mortgage (FRM) averaged 4.35 percent with an average 0.7 point for the week ending September 9, 2010, up from last week when it averaged 4.32 percent. Last year at this time, the 30-year FRM averaged 5.07 percent.
15-year FRM this week averaged a record low of 3.83 percent with an average 0.6 point, unchanged from last week when it also averaged 3.83 percent. A year ago at this time, the 15-year FRM averaged 4.50 percent.