The Big Decision | Four Key Benefits That Come With Every Mortgage Loan

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It’s a big decision: Taking on a monthly mortgage payment is no small matter. That payment will probably become a homebuyer’s biggest expense. And what if you can’t pay on time? Get sick? Lose a job? Divorce? You could see your credit score plummet.But there’s another side to taking on a first mortgage loan. Not only does such a loan allow a renter to become a homeowner—that mortgage also brings with it several financial benefits, everything from big savings at tax time to a boost in your credit score.If you’re debating whether it’s time for a mortgage loan—or know someone who is—peace of mind comes from understanding the benefits of that loan.

Mortgage interest deduction: Tax time is no fun. But if you are paying off a mortgage loan, your tax bill might become smaller. That’s because the interest you pay on your mortgage loan is deductible on your income taxes. You can deduct the interest on up to $1 million worth of home-mortgage debt, whether that debt has helped you buy a first home or a second one. You can only claim this deduction if you itemize your taxes, and you’ll have to determine if it makes more sense to take the standard deduction. But for many new homeowners, the mortgage-interest deduction is a welcome financial relief at tax time.

The power of equity: When you pay down your mortgage loan, you build up equity. For instance, if your home is worth $250,000 and you owe just $150,000 on your loan, you have $100,000 worth of equity in your home. You can tap into that equity through a home equity loan or home equity line of credit (HELOC) to fund anything from home repairs to college tuition to a cruise around the world. Interest on equity loans of up to $100,000 is also tax deductible. Just make sure you pay your home equity loan or line of credit back on time; if you don’t you could lose your home.

A credit boost: You might never pay your insurance bills late. You might never miss a utility bill or a cable payment. But these regular payments most likely won’t boost your credit score. That’s because they aren’t reported to the three national credit bureaus, Equifax, Experian and TransUnion. And only TransUnion and Experian have begun collecting rental payment information. But one payment that is always reported to the credit bureaus? Your monthly mortgage payment. If you continually pay this bill on time, you can watch your credit score rise at a steady clip. And today, having a high credit score is a necessity when you want to take out additional credit at low interest rates.

Control: If you rent, your landlord can raise your monthly payment whenever your lease comes to an end. If you take out a fixed-rate mortgage loan, though, your monthly payment will fluctuate only slightly over its lifespan. That’s because your principal and interest payments are set when you take out a fixed-rate loan. All that can change is the amount you pay for homeowners insurance and property taxes, which is why your mortgage payment might rise or fall slightly during its life. This gives you more control over an ongoing, large monthly expense, and can make budgeting an easier task.

 

Categories: Mortgage 101, Uncategorized, wilmington beach homes, Wilmington NC homes

Decorating | Choose Wallpaper With The Future In Mind

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wallpaperThere’s nothing quite like wallpaper for warming up a room and giving it character. It isn’t without its drawbacks, though, as a design element. For one thing, the cost of buying and installing wallpaper is considerably higher than for painting-making it a longer-term design choice. When color and design styles change, or your personal tastes do, removing wallpaper can be quite a project, yet a necessary one before re-wallpapering or painting can be accomplished.

If you really want the distinctive look of wallpaper, consider the following tips to maximize your long-term satisfaction:

Choose washable wallpapers for kitchens, bathrooms and kids’ room, where marks and stains are likely to occur.

The size of the pattern should match the size of the room: small patterns for small rooms, large patterns for large rooms.

Think about using wallpaper on just one wall of the room to add personality with less expense (and less removal hassles later).

Select wallpaper patterns with relatively few or neutral colors (e.g., white on beige) to maximize the variety of furnishing colors that can coordinate with your choice. (This is particularly important if you expect to sell your home within a few years.)

Before buying or ordering any paper, purchase a large swatch and tape it to your walls at home to see how it will coordinate with your furnishings. (Often, wallpaper companies will charge a restocking fee for returned rolls.)

Order enough paper so you’ll have at least one additional roll of the same print run in case you need to make repairs later on.

Categories: decoating, Decorating with wallpaper, Uncategorized, wallpaper, Wilmington NC homes, Wrightsville Beach NC

Keep Your Kitchen From Eating Your Income

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Kitchens are energy-intensive rooms thanks to modern appliances designed to make life, and eating, easier. The U.S. Department of Energy offers the following tips for cutting energy consumption in the kitchen without sacrificing convenience.

 

Skip the pilot light. If you’re thinking of replacing your current range or oven with a new gas model, opt for a unit with an electronic ignition. Pilot lights burn gas–and money–24 hours a day.

Check the flames. If gas is being burned efficiently by your range or oven, the flames should be blue. If they’re yellow, call in a professional to have the unit adjusted or repaired.

Clean range burners and pans. Clean burners and pans reflect heat better, thus using less energy.

Turn off early. Electric ovens retain heat for quite a while after they are turned off. By turning the heat off several minutes early, you can use the residual no-cost heat to finish cooking your food.

Use small appliances. Using a toaster oven–for foods that fit–cuts energy consumption more than 50% compared with a full-sized oven. You can also save money by using fast-cooking appliances-microwaves and pressure cookers.

For more helpful homeowner tips, please visit www.cbbaker.com

Categories: Energy saving kitchens, Wilmington NC homes

House Hunting | Steal a Deal | Wilmington NC real estate

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Homebuyers Can Still Get A Great Price Even In Today’s Rising Market

Today’s Wilmington NC housing market is well into recovery mode in most areas of the country. Along with rising home prices, mortgage interest rates have also been inching up. If you are among the would-be homebuyers who are ready to come to the party before it’s too late, don’t despair. There are still many opportunities available to steal a great home at a great price—whether you want to buy your first home, a move-up home, a vacation property or an investment property to rent out.

The key is knowing what types of properties still offer bargains in our market. Here are some of the best places right now to focus your search to get a great price:

  • Pre-foreclosure sales occur when borrowers find they can no longer afford to pay their mortgage; they sometimes have a window of time to sell their home before their lender starts the foreclosure process. Because time is of the essence, these “short sale” homeowners often lower the property’s price and offer attractive terms to invite a quick sale. 
  • Foreclosure auctions involve homes where a homeowner has defaulted on the loan and the lender is selling the property at public auction (sometimes called a trustee’s sale or sheriff’s sale). Auction sales are often listed in local newspapers. 
  • Post-foreclosure sales. These homes include real estate owned (REO) by lenders and corporations. Lender REOs are foreclosed properties that did not sell at auction. Corporate REOs are usually homes purchased from a corporation’s employees who were transferred before the properties could be sold. Most post-foreclosure properties are listed with real estate agents in the area. 
  • Government-owned properties include homes that previously had loans backed by the federal government through programs sponsored by entities such as Veterans Affairs (VA) and the Department of Housing and Urban Development (HUD). Once these loans are in default, the lender takes over the property. Then, the government entity pays off the loan and takes possession of the property. Government-owned homes are generally listed on the agency’s website or in the newspaper. The bidding process is conducted through real estate brokers who have taken the government agency’s training program. While government-owned homes are sold “as is,” HUD may escrow part of the sales price to bring a property up to its standards to qualify for a Federal Housing Administration (FHA) loan. 
  • Tax sales result when homeowners fail to pay their property taxes. The taxing authority schedules the tax sale at which a buyer can bid the amount owed in taxes (or more) and, if the bid is accepted, take ownership of the property. Even then, the original homeowner may have time to redeem the property (by paying the outstanding taxes, penalties, etc.). The rules of these types of sales vary from one locality to the next, so it is essential to be familiar with local processes. 
  • Fix-up properties generally are in disrepair and are often sold “as is,” with the discounted price reflecting their condition. Paying for a professional home inspection is especially important when considering these types of “sweat equity” properties. 
  • Estate sales result when people who have inherited properties decide to sell them. Many prefer to sell them “as is” to quickly liquidate the estate. Those who view the inheritance as a windfall may be more interested in a fast sale, and less concerned about the sales price. 
  • Divorce sales come on the market as part of a divorce settlement. As with estate sales, the owners may value a speedy sale over a higher price. 
  • Builder close-outs occur when builders approach the completion of a housing development. Eager to move on to the next project, builders may lower prices or, more frequently, offer valuable incentives such as free upgrades of appliances, fixtures, materials or custom build-outs.

Remember, price is just one part of the equation. You’ll want to ensure that these types of properties won’t surprise you with unanticipated and costly physical challenges or legal issues. Working with an experienced real estate professional will help you find a great deal and navigate through the purchase process.

In addition, securing a mortgage with a monthly payment you can afford is critical to any successful home purchase. Call on us to find the right loan program for your low-cost high-value home purchase.

Categories: Buy a foreclosure in Wilmington NC, Uncategorized, Wilmington NC homes

OPTIONS: Ten Savvy Ways To Pay For A Home Today in Wilmington NC

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Different buyers have different mortgage needs. Fortunately, lenders today offer many mortgage options to choose from. Chances are you’ll find a mortgage plan that works for you.spartanburgBecause points, fees and interest rates vary, check with us or your lender for specific information on the type of loan you are considering. The “snapshot” interest rate examples shown here are for illustrative purposes only and may not reflect current rates. For simplicity, all examples here use a $100,000 sales price. Monthly payments are for principal and interest only (taxes, insurance and condo/homeowner fees would increase your payment).

Adjustable-Rate Mortgage.

The interest rate is adjusted up or down periodically based on a financial market index (such as Treasury bills). Monthly payments start lower than for fixed-rate mortgages. The initial rate is set for a specified period — 1, 3, 5, 7, or 10 years — and then rates adjust on a schedule, say, annually. The adjustments generally are limited by annual caps and a life-of-the-loan cap.

Down Payment: $10,000
Mortgage Amount:< $90,000
Term of Loan: 30 years
Interest Rate: 7% (until first rate adjustment)
Monthly Payment: $599 (until first rate adjustment)

Fixed-Rate 30-Year Conventional Mortgage.

A fixed-rate conventional loan is made by a commercial lender for 30 years. Monthly payments (excluding taxes) remain unchanged for the life of the loan. Some lenders allow mortgages with as little as 5% down, but require private mortgage insurance for loans with less than 20% down.

Down Payment: $10,000
Mortgage Amount: $90,000
Term of Loan: 30 years
Interest Rate: 8 1/2%
Monthly Payment: $692

Fixed-Rate 15-Year Conventional Mortgage.

This is similar to the 30-year conventional mortgage, except the loan is repaid in half the time. Interest rates are typically lower than for a 30-year loan, and interest paid over the life of the loan is less, but the monthly payments are usually somewhat higher. Government-backed loans — VA and FHA — are also available in 15-year terms.

Down Payment: $10,000
Mortgage Amount: $90,000
Term of Loan: 15 years
Interest Rate: 8 1/4%
Monthly Payment: $873

Two-Step Loan.

This 30-year loan is a cross between the ARM and a conventional loan. The mortgage carries a fixed rate for 5, 7 or 10 years and then adjusts to market interest rates once for the remainder of the loan. The initial rate is generally lower than a fixed-rate conventional mortgage, but the second step of the two-step mortgage is often conditional on the lender’s approval.

Down Payment: $10,000
Mortgage Amount: $90,000
Term of Loan: 30 years
Interest Rate: 8 1/8% (for first 2 steps)
Monthly Payment: $668 (until adjustment)

Federal Housing Authority (FHA) Loan.

These are government-insured loans so homeowners can make a smaller down payment than on conventional loans. The limits on FHA loans are high enough to handle moderately priced homes in many parts of the country. FHA loans are assumable for future buyers who qualify.

Down Payment: $10,000
Mortgage Amount: $90,000
Term of Loan: 30 years
Interest Rate: 8 1/4%
Monthly Payment: $676

VA Loan.

These are loans for qualified veterans backed by the Department of Veterans Affairs with low or no down payment required. These mortgages are subject to the VA mortgage funding fee, depending on the size of the down payment. VA loans can be combined with second mortgages and are assumable to qualified buyers.

Down Payment: $10,000
Mortgage Amount: $100,000
Term of Loan: 30 years
Interest Rate: 8 1/4%
Monthly Payment: $751

Seller Financing.

Sellers may take back a loan against their equity in the property in the form of a first or second mortgage. One approach to owner financing is to use a balloon mortgage calculated and repaid for 5 or 7 years as a 30-year mortgage, but then the balance of the loan is due in a lump sum.

Down Payment: $15,000
Mortgage Amount: $85,000
Term of Loan: 5 years
Interest Rate: Negotiable
Monthly Payment: Depends on rate

Assumable Mortgage.

A buyer takes over the existing mortgage — usually FHA, VA or ARM — at its current interest rate, with the concurrence of the lender. An assumption may have a lower rate than those currently available, and taking over the mortgage may save on closing costs. The down payment makes up the difference between the sales price and the balance on the loan.

Down Payment: $30,000
Mortgage Amount: $70,000
Term of Loan: Time remaining on loan
Interest Rate: Same as seller had
Monthly Payment: Same as seller was paying

Wrap-Around Mortgage.

Here a new mortgage incorporates an older, assumable loan to help bridge the gap between the loan balance and home sales price. The interest rate is often below market, but higher than the rate the old mortgage carries. Payments are made to the new lender or the seller, who forwards part of the payment to the first lender. The term of the mortgage is the time remaining on the original loan.

Down Payment: $10,000
Mortgage Amount: $90,000
Term of Loan: Time remaining on original loan
Interest Rate: 9%
Monthly Payment: $724

Buy-Down Mortgage Plan.

The seller or a third party provides additional cash to the lender in exchange for a lower interest rate for the buyer. Approaches vary among permanent buy-downs, multi-year and graduated plans.

Down Payment: $10,000
Mortgage Amount: $90,000
Term of Loan: 30 years
Interest Rate: 6 1/2% (initial)
Monthly Payment: $568 (until subsidy diminishes or expires)

Call us, we can help get you started.

 

Categories: First Time Home Buyer, wilmington nc convention center, Wilmington NC homes, wilmington real estate stats

16 Things Every Home Buyer Should Know About Adjustable Rate Mortgages – But Shouldn’t Be Afraid To Ask

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When Wilmington NC  home buyers go shopping for the best Adjustable Rate Mortgage (ARM) they can find, these are the 16 essential things they should ask about:

Up/Down on Paper

  1. The initial interest rate or “qualifying” rate.
  2. The length of time the interest rate and monthly payment will remain the same as at the start. Also the length of time between rate and payment adjustments.
  3. The index to which the ARM is keyed (Treasury bills, etc.)
  4. The current index level.
  5. The margin percentage between the index and the mortgage interest rate.
  6. How the index and margin are combined to arrive at a loan interest rate (both initial and adjusted rates).
  7. The adjustment (if any) to be made in interest rate and monthly payment, if the index remains the same.
  8. Whether or not the loan has an interest rate cap (limit). If so,
    1. the limit to the increase in the interest rate at the time of each adjustment,
    2. whether or not there is a carryover to the next adjustment period of any increase in the index rate that goes over the specified limit, (that is, can increases be applied in subsequent years when the rate increase is below the cap), and
    3. whether or not a periodic rate cap applies to the first adjustment and/or rate decreases.
  9. Whether or not a life-of-the-loan interest rate cap is available. If so, the minimum and maximum rates.
  10. Whether or not a periodic payment cap is available. If so, ask about:
    1. the maximum monthly payment increase possible at any adjustment, and
    2. the payment cap, does it apply to the first payment adjustment?
  11. The initial annual percentage rate (APR) of the loan, which may fluctuate in later years.
  12. In case of negative amortization, how often the loan is recast to pay off the increase in principal. After recasting, the limit (if any) on the amount of increase in payment.
  13. Whether or not negative amortization may occur if an interest rate increase causes a monthly payment to accrue over the cap limitation. Whether or not the payment cap applies to any increase caused by periodic recasting of the loan because of negative amortization.
  14. Whether or not the loan can be assumed by a future buyer. If assumable,
    1. the qualifications involved, and
    2. whether or not the original interest and payment caps will hold. If not, the specifications for new caps.
  15. Whether or not the ARM can be converted to a fixed-rate loan at any time.
  16. Whether or not the loan has open-end credit.
  17. If you would like a further explanation of ARM features, give us a call or send an e-mail question. We’ll be glad to discuss this sometimes-complicated subject with you.

 

Categories: Adjustable Rate Mortgages, Wilmington NC homes, wilmington real estate stats, Wrightsville Beach NC

Lender Requirements When Purchasing a Home.

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Perhaps you’re nervous about applying for a home loan. There’s good reason. Lenders’ requirements have gotten tougher, down payments higher and interest rates keep creeping up. But getting a loan today is easier than you might expect.

Be aware that there are many reasons that lenders cannot use to turn you down for a loan. If you are otherwise qualified for a home loan, a lender cannot reject your application for these reasons:

  1. If a female applicant is pregnant.
  2. If you are on paid family leave from your job.
  3. Based on your race, color, religion, sex, national origin or disabilities.
  4. Based on family status.
  5. Your reliable income is from part-time employment, Social Security, pensions and annuities.
  6. Your reliable income is from alimony, child support or separate maintenance payments.

If you are denied a mortgage, your lender must outline exactly why you were rejected. Acceptable reasons include “your income was too low” or “you haven’t been employed long enough.” Unacceptable reasons include “you didn’t meet our minimum standards” as that reason is not specific enough.

If you are wrongly denied a mortgage, contact the lender to reconsider your application. In addition, consider contacting your state’s attorney general office to see if state laws were violated and contact the appropriate government agency.  kaybaker@associates@ec.rr.com
or 910-202-3607.  Find us on www.cbbaker.com

Categories: Lender Requirements, Wilmington NC homes, wilmington real estate stats, Wrightsville Beach NC

“LITTLE” HOUSEHOLD PROBLEMS CAN EVENTUALLY COST A LOT

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Sometimes a $1,000 disaster can be prevented with a $4 hose. That’s the finding of many homeowners who end up paying a lot for repairs that could have been prevented with just an ounce of inexpensive prevention.

One of the best places to check first is any place in your home that can be damaged by water. A survey by the American Society of Home Inspectors found that 40% of home maintenance problems are related to water. Water seeping into the basement or crawlspace, leaks from neglected washer and dishwasher hoses, and leaking pipes can leave you wet and poor.

Pay attention to the following items in your home regularly:

Water Threats
• Check for leaks from appliance hoses (washer and dishwasher), connections to the hot water heater and humidifier, outside spigots, exposed plumbing. Tighten all connections.

• After a heavy rain, check for water in attics, basements and crawlspaces. Make repairs as soon as the area is dry.

• Backed-up gutters can cause water to seep back up into the attic. The solution is simple, though: regularly remove leaves and debris from the gutter system.

Electrical System
• Check the circuit breakers about every six months.

• Check switches when lights seem to blink when the switch is touched.

• Keep wall-socket plates secure and replace broken ones.

A/C and Heating System
• Check these systems at least once a year; have them cleaned and serviced. You could save thousands in repair/replacement bills later, and improve operating efficiency thereby lowering monthly costs.

• If you have a fireplace, make sure it is professionally inspected and cleaned annually. Wood-burning fireplaces can cause creosote to build up in their chimneys–a dangerous fire hazard.

For more information please visit www.cbbaker.com

Categories: Wilmington NC homes, Wilmington NC Market Statistics, wilmington nc real estate, wilmington nc relocation

Someone would like to see your home in a half hour | Ready. Set. Go

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READY TO SHOW

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Showing Primer: Get Your Home Visitor-Ready In A Flash

Some Wilmington NC buyers may not give you much notice before they want to tour your home. Here are several tips to keep your home showcase-ready—or get it ready fast. On your mark: Assemble a cleaning caddy with all necessary tools, cleaners and rags to take with you from room to room. Get set. Go!

Everywhere

  • Turn on lights, open window coverings.
  • Stash items that don’t belong in a particular room in a box or bin. Place the filled container in the garage, basement, attic or another out-of-the-way area.
  • Lock up pets or take them with you when you leave for showing.

Kitchen

  • Pop dirty dishes in the dishwasher.
  • Take garbage/recycling to bins outside.
  • Wipe counters, sink, appliances with appropriate cleaner.
  • Sweep along cabinets and in corners.
  • Wipe up any sticky floor spots.

Living Room/Family Room/Den

  • Dust large open surfaces such as tables, lamp shades, shelves, etc.
  • Straighten books, magazines, videos, music, electronics (better yet, ban this clutter for now).
  • Fluff and arrange pillows and throws.

Bedroom

  • Make beds, even if it means throwing bedspread/comforter over unmade sheets.
  • Prop up pillows decoratively.
  • Put away clothes and other clutter (under-bed storage box works too).

Bathroom

  • All countertop items in cabinets.
  • Fold towels neatly or put out special “showing-only towels.”
  • Wipe down counter/sink and perhaps tub/shower if you have time.
  • Sweep or wet-mop floor, especially corners.
  • Wipe down toilet and/or swish inside with nearby toilet brush.

Hallways/Entry/Mudroom

  • Hang up all items.
  • Sweep and/or shake out rug outside.
  • Put dirty clothes in washing machine or dryer (if either are empty).
  • Showtime!
Categories: Getting your home ready for a showing, wilmington beach homes, wilmington nc, Wilmington NC homes, wilmington nc real estate

“Mortgage pre-approval is the best first step to a home purchase.”

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Finding out how much home you can afford is basic to a successful homewilmington nc real estate search. But getting pre-approved for a mortgage is even better. Why? A lender who pre-qualifies a buyer is merely saying that a quick overview of the buyer’s financial picture indicates he or she can afford a home of a certain price. Pre-approving the buyer, however, means the lender has taken an in-depth look at the buyer’s finances and made a commitment to finance the buyer’s home choice up to a certain price. (This assumes the home appraises well and meets other lender criteria).

Home sellers heavily favor buyers who back their purchase offers with loan pre-approval because those contracts have a higher probability of going to settlement.

Get more Wilmington NC real estate information here.  kaybakerassociates@ec.rr.com or www.cbbaker.com
Categories: How much can you afford, Wilmington NC homes, Wilmington NC Neighborhoods, Wrightsville Beach NC


Kay Baker Associates | 1001 Military Cutoff | Ste 101 Wilmington, NC 28405 | kaybakerassociates@ec.rr.com | 910-202-3607 | Fax 910-338-2428

Copyright © 2017 Wilmington NC Real Estate Guide. All rights reserved. Disclaimer: All content on this blog is my own opinion and should not be treated as fact or relied upon when purchasing or selling real estate.