According to Mortgage Match new rules will make it mandatory for Mortgage Lenders to give mortgage applicants credit scores and credit report factors used during the loan application process.  If a Mortgage Lender quotes an applicant an interest rate and points that the loan will cost and there is a difference between interest rate and costs quoted to other applicants the loan officers will be required by Federal law as of July 21 to:

“–Tell you that you received a less favorable offer because of negative information in your credit bureau files;

–Provide you the actual credit scores used for your rate quote;

–Disclose the name and contact information of the credit reporting company that supplied the scores that led to your less favorable quote;

–Provide consumer education materials explaining credit scores, how they are used, and how your own score ranks against other applicants, plus the credit file factors that may have depressed your score. For example, if maxed-out credit cards and late payments are in your files, they could play significant roles in lowering your credit scores” per Mortgage Match.

The applicants will be able to have access to their credit report and the whole loan application process will become more transparent for the applicant.  Consumer education materials will be available for the applicant, so they can see why they were turned down, or received a higher interest rate.  They will have the right to obtain a  free credit report if turned down for the loan.

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

The Pending Home Sales Index a “pending prediction” indicator based on contracts signed in April, rose 6.7 percent to 90.3 from 84.6 in March,
which is even above the April 2008 index of 87.5.

To get the first time home buyer credit of $8,000, contracts must be firmed up by November 30, 2009 to receive the credit, so we look forward to an increase in home sales.

The Wilmington NC real estate market has also enjoyed an increase in pending sales contract and still is in a a strong postion to continue this trend.

To search all Wilmington NC real estate and find out about the $8,000 tax credit please read more about the Wilmington NC real estate market here.

“The answer, my friend, is blowin in the wind. The answer is blowin in the wind” Bob Dylan. Where is the answer? While the Federal Reserve and the Treasury Department think they have the answer. Congress thinks they have the answer and Wall Street has a bailout, now the Auto Industry is looking for help. With so many plans and paths the consumer is confused and has no confidence in our economic system right now. So they sit and wait and hold on to what they have. What is the answer for the consumer?

We continue to be down in sold units but our bright spot is our rolling 12 month average sales price which is now just behind 2007 by $12,674, this represents a minus 4.7%. In units we are showing a 26.7% decline. Most agents will agree that it is a buyer’s market when the listing inventory exceeds 6 months; we are there at 16.4 month supply of homes. We have a few plus factors – Our listing inventory has about peaked out as anticipated and the average list price has remained stable – the last 5 months it has remained in the $420,000’s and November it is just under target at $418,684. The amount of sellers paying concessions is 21.3%, we want this number going down and it went down from last month. Our average days on the market are 116 days which is typical for a buyer’s market it went up by 2 days over last month. Then I look at the factors that are slowing us down. The list to sold ratio is 94.7% we want this number to be going up, and it went down .06% from last month. Our sold units over last year same month is down by 24.9%. One area I continue to look at is the Pending Inventory, and based on the current numbers we will see decreases as we approach the winter.  Our pending inventory numbers have gone from the high 900’s the first week of July into the mid 840’s the first part of August and into the mid 760’s the first week of September and into the high 690’s the first week of October and we are now approaching the low 600’s here in mid November. I would like to tell you that we are reaching bottom, some interesting facts; Average list price had been in the $420,000’s for the last 5 months, sellers paying concessions has stayed the same range for 3 months and the rolling 12 month average sales price is only down 4.7%.

It seems like we have been on a never ending roller coaster the last 2 months. Billions of dollars have been adjusted all over the place, bailouts and economic stimulus plans seem to be the word of the day. Despite all the media comments about our markets we are still lending money for residential mortgages. We do seem to be going back to the basics; income and credit and some sort of down payment and you can get a mortgage. I firmly believe that this quarter and the first quarter of 2009 will prove to be the ideal time to purchase real estate.

Wimington NC Listing Inventory

Our current listing inventory has a 89 unit decrease from last month and we are about 173 units down from November 2007. We have 5,652 single family homes for sale in our MLS. The average list price of $418,684 is down by $5,517.00 from last month. Our average list price last November was $422,311. If our charts prove correct we will continue to see a small decrease in listing through December 2008.

Wilmington NC Real Estate Monthly Average Sold Price

Our monthly average sold price is up 7.5% from last month and down 11.2% from October 2007.  October average sold price ($254,477) shows a decline of just 7.0% from year end 2007. When we look at a rolling 12 months our current average sales price remains behind year over year comparisons. Our current year over year (11/01/07 – 10/31/08) average sold price of $259,718 is 4.7% behind $272,392 of this time last year. Please note that of the last four years the month of October, 3 of those years – 2008, 2006, 2005 have the average sold price from $252,500 to $254,500. Look at how October 2007 stands out with April of 2007.

Monthly Sold Units

The number of sold homes in October is down 7.5% from last month. When we look at a rolling 12 months our number of sold unit’s year over year is 4,978 units compared to 6,794 last year this time, a decrease of 26.7%. Our monthly sold units continue to lag behind the last couple of years.

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 $ 264,520

2007 year end average sale price $ 273,701

2008 year to date average sale price $ 257,434

Our 12 month (11/1/07 – 10/31/08) rolling average ($259,718) continues to show us that we are in line with last year ($272,392) by less than 4.7% and only off by 1.6% from 11/01/05 – 10/31/06. This is good news.

Median Sold Price

Our Median sold price is $ 200,000 for October 08’. This is a 3.1% decrease over last month. The National Median sold price is showing a downward trend. It will be interesting to see how the National numbers look over the next couple of months. We are still slightly ahead of the National Median price.

Market Absorption rate – The number of homes sold in October, 365 divided by the current listing inventory, 5,652 gives us a 16.4 month supply of single family homes, a increase of .7 months from last month. We are back over the 12 month supply. We would need monthly sales of over 950 units to get us back under a 6 month supply, so we still have a long road ahead.

List to Sold price ratio – the average list price of the sold properties is $268,566 and the average sold price is $254,447 for October which gives us a 94.7% list to sold price ratio.  We are now back under the 95% list to sold price ratio.

Seller Concessions – 21.3% of sold properties in October reported a sales concession, a little bit lower than last month, we want this headed lower. The average concession for the month was about $3,571.00

Days on Market – The average days on market for the sold properties was 2 days longer to sell over last month. We averaged 116 days for the month of October. Over 19.8% of the properties were placed under contract in less than 15 days for the month of October. This is a increase of 1.2% from last month. We want this number going up.

Carolina & Kure Beach Real Estate

There are currently 613 single family homes for sale and this represents a 15 unit decrease over September and 10.8% of our total WRAR inventory.  The average list price is $527,605 a decrease of 2.4% over October 08’. In October there were 16 homes sold, divide that by the homes available and you have a 38.3 month supply of homes in Carolina and Kure Beach. This is up from last month. The average sold price for the month of October was $330,594 a decrease over last month of 12.7%. When I look at the first 10 months of 2008 and the first 10 months of 2007 our average sales price is down 10.0%. Our year to date sales numbers of 214 units are down only 9 units from last year same time frame.

This data was pulled on November 13, 2008. Based on information from the Wilmington Regional Association of REALTORS Incorporated, for the period Jan. 1, 2005 through October 31, 2008.

The Market

Mortgage rates down for second week running

Freddie Mac released the results of its Primary Mortgage Market Survey in which the 30-year fixed-rate mortgage (FRM) averaged 6.14 percent with an average 0.7 point for the week ending November 13, 2008, down from last week when it averaged 6.20 percent. Last year at this time, the 30-year FRM averaged 6.24 percent.

“Long-term mortgage rates fell slightly this week as signs the overall economy is weakening brought interest rates down market-wide,” said Frank Nothaft, Freddie Mac vice president and chief economist. “In addition, the actions of the Fed in recent weeks to assist commercial paper markets appear to be thawing part of the credit freeze that has gripped capital markets in the U.S., giving banks some breathing room. This is the second week that rates have come down for fixed-rate mortgages.

“Mortgage applications for home purchase loans fell during the final week in October to the slowest pace since the week of December 29, 2000, based on figures published by the Mortgage Bankers association. Meanwhile, the National Association of Realtors® (NAR) reported that pending existing home sales fell 4.6 percent in September, below the market consensus; however, the index was 1.6 percent above that of the same period last year.”

Freddie Mac

Efforts to Minimize Foreclosures announced this week

Fannie Mae and Freddie Mac joined other major banks this week in announcing plans to accelerate anti-foreclosure efforts with a new loan modification program designed to cut monthly payments for struggling homeowners. Under the plan, mortgage servicers will work with borrowers to reduce monthly payments to 38% of their gross income, a level considered a threshold for affordability, using a combination of lower principals, interest-rate reductions and extensions. The plan does not include money from the Treasury’s $700 billion bank rescue.

It is clearly in the interest of the mortgage finance firms as well as banks to take steps to halt foreclosures. The market is already flooded with far more new and existing homes for sale than there are buyers, and foreclosures will only further drive down home prices and lead to more foreclosures in the future.

Many thanks to David Flory for this valuable info..

David Flory

Mortgage Consultant
Cunningham & Company Mortgage Bankers
910-352-8273 cell
910-313-0045 office
davidf@cunninghammortgage.com
www.cunninghammortgage.com

To learn more about how you can finance a home, please just give us a call or email kay@cbbaker.com.  To search all homes in Wilmington, NC by city, zip code, neighborhood, schools or map, just log onto cbbaker.com.