Homeowners Association (HOA): Pros/Cons All Buyers Should Consider

Homeowners Association (HOA)

Modern Townhouses

Home shoppers weigh a laundry list of factors before purchasing a single-family home or condo. Location, price, size, and style are all taken into consideration. But for some, a home in a community with a homeowners association, or HOA—a board of residents who help ensure that your community looks its best and functions smoothly—could either sweeten the pot or be a major deal breaker.

“I have had clients who specifically want this type of situation, and others who refuse to buy in a community that has one,” says Bill Golden, an independent real estate agent with Re/Max Metro Atlanta Cityside.

Want to know what makes buyers swing one way or the other? The following insights will illustrate the best and worst qualities of HOAs and help you decide if living in this type of community is right for you.

Pro: HOAs maintain the common areas
Your community’s HOA will be responsible for handling all maintenance of common areas and repairs for the amenities outside of your home. It’s perhaps the biggest perk of living in an HOA community.

“Based on maintenance fees collected, an organized HOA maintains a comfortable balance in their fund to offset maintenance costs or unexpected issues that need to be fixed,” says Drew Scott of HGTV’s “Property Brothers” and co-founder of Scott Brothers Global.

An HOA’s level of involvement varies and might depend on the type and size of the community.

“The HOA will take care of the common areas like the pool, clubhouse, walking paths, or other amenities that provide value to the residents,” says Mark Ferguson, a Greeley, CO–based real estate agent and investor.

Con: You have to pay recurring HOA fees
If you move into an area with an HOA, membership is mandatory and so are the monthly or annual fees.

“The fees can change, based on decisions that you don’t have total control over,” Golden says. “Fees can also be a detriment to resale if potential buyers don’t want that extra cost in addition to their house payment.”

So, how much can homeowners expect to pay? It varies depending on your location and how expensive your house is.

“It also depends on the amenities offered by the neighborhood, but, for example, in the Trussville/Birmingham, AL, area, annual HOA fees could range anywhere from $300 to $1,200,” explains Patrick Garrett, real estate broker at H&H Realty in Trussville, AL.

The listing agent will be able to tell you exactly how much HOA payments will be.

Pro: HOAs help keep uniformity
Each HOA has its own declaration of covenants, conditions, and restrictions, or CC&Rs, which explain what homeowners can and cannot do—this includes streamlining the appearance of each property.

“Your neighbors can’t paint their house bright purple or put an unsightly addition on the front of their house,” Golden says. The CC&Rs make sure “the community retains the look and feel of the way it was built.”

Other common no-nos are parking vehicles on the lawn or keeping inoperable vehicles in the driveway.

“You won’t have to worry about that one neighbor that has decided to let his front yard grow into a wild jungle,” says Golden.

“Ultimately, the HOA helps the homes within the neighborhood retain their value,” Garrett says. “When there are rules and guidelines governing how homeowners should keep their property’s appearance, it helps keep the neighborhood looking desirable for the consumers perusing the neighborhood in search of a new home.”

Con: There’s a lot of red tape
Building that new second-floor addition will be especially difficult in an HOA community. Why?

Any exterior modification—even a minor one like a play area for your kids—has to be approved by the HOA.

You must submit plans describing the height, colors, location, shape, and materials to the HOA board for approval. “This can really slow down the process or limit the type of work you can do,” Scott says.

Ferguson says the approval process can be downright unreasonable. “It once took my HOA nine months to approve a basketball hoop that had already been approved by them for the previous owners,” he says.

Pro: HOAs mediate problems on your behalf
An HOA can also reduce conflicts and unpleasant exchanges. If your neighbors haven’t cut their lawn in several weeks, or decide to turn their driveway into an auto repair shop, you don’t have to confront them because the HOA will. When anyone is engaged in activity that violates the CC&Rs, the HOA sends a friendly notice and follows up with a stern warning.

Con: They can be overbearing
Remember those CC&Rs? While they come in handy for preventing rowdy college students from moving in, they also might be off-putting for homeowners who like their autonomy.

“Many folks believe that buying your own home should give you the freedom to make the changes you want to make and express your own individuality,” Golden explains. “They don’t want decisions about their own home made by a committee.”

HOA-mandated restrictions can be set on swimming pools (e.g., in-ground swimming pools can be built in the back of the house, but above-ground pools are prohibited), pets (e.g., they are allowed, but they can’t be bred or kept for commercial reasons; livestock or poultry are not allowed without permission), and rentals (e.g., you might be prohibited from renting out rooms or the entire home). In extreme situations, some HOAs can evict the tenant and hold the homeowner responsible for any eviction costs or any damage caused by the tenant.

Original Source

Realtor/Broker NC-SC
Coldwell Banker Sloane Realty
16 Causeway Drive
Ocean Isle Beach, NC 28469
Direct: 910.443.0398
Toll-Free: 800.237.4609 X206
Fax: 910.579.5877

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Getting A Mortgage Loan: 6 Ways Home Buyers Mess Up

Getting A Mortgage

Getting a mortgage is, by general consensus, the most treacherous part of buying a home. In a recent survey, 42% of home buyers said they found the mortgage experience “stressful,” and 32% found it “complicated.” Even lenders agree that it’s often a struggle.

“A lot can go wrong,” says Staci Titsworth, regional manager at PNC Mortgage in Pittsburgh.

If you’re out to buy a home, you have to be vigilant. To clue you into the pitfalls, here are six of the most common ways people mess up getting a mortgage:

1- Waiting until you can make a 20% down payment
A 20% down payment is the golden number when applying for a conventional home loan, since it enables you to avoid paying private mortgage insurance (PMI), an extra monthly fee of 0.3% to 1.15% of your total loan amount. But with mortgage rates where they are today—in a word, low—waiting for that magic 20% could be a huge mistake, since the more time passes, the higher mortgage rates and home prices may go!

All of which means it may be worth discussing your home-buying prospects with lenders right now. To get a ballpark figure of what you can afford and how your down payment affects your finances, punch your salary and other numbers into a home affordability calculator.

2- Meeting with only one mortgage lender
According to the Consumer Financial Protection Bureau, about half of U.S. home buyers only meet with one mortgage lender before signing up for a home loan. But these borrowers could be missing out in a big way. Why? Because lenders’ offers and interest rates vary, and even nabbing a slightly lower interest rate can save you big bucks over the long haul.

In fact, a borrower taking out a 30-year fixed rate conventional loan can get rates that vary by more than half a percent, the CFPB has found. So, getting an interest rate of 4.0% instead of 4.5% on a $200,000, 30-year fixed mortgage translates into savings of approximately $60 per month, or $3,500 over the first five years.

So to make sure you’re getting the best deal possible, meet with at least three mortgage lenders. You’ll want to start your search early (ideally, at least 60 days before you start seriously looking at homes). When you meet with each lender, get what’s called a good-faith estimate, which breaks down the terms of the mortgage, including the interest rate and fees, so that you can make an apples-to-apples comparison between offers.

3- Getting pre-qualified rather than pre-approved
Mortgage pre-qualification and mortgage pre-approval may sound alike, but they’re completely different. Pre-qualification entails a basic overview of a borrower’s ability to get a loan. You provide a mortgage lender with information—about your income, assets, debts, and credit—but you don’t need to produce any paperwork to back it up. In return, you’ll get a rough estimate of what size loan you can afford, but it’s by no means a guarantee that you’ll actually get approved for the loan when you go to buy a home.

Mortgage pre-approval, meanwhile, is an in-depth process that involves a lender running a credit check and verifying your income and assets. Then an underwriter does a preliminary review of your financial portfolio and, if all goes well, issues a letter of pre-approval—a written commitment for financing up to a certain loan amount.

Bottom line? If you’re serious about buying a house, you need to be pre-approved, since many sellers will accept offers only from pre-approved buyers, says Ray Rodriguez, New York City regional mortgage sales manager at TD Bank.

4- Moving money around
To get pre-approved, you have to show you have enough cash in reserves to afford the down payment. (Presenting your mortgage lender with bank statements is the easiest way to do this.) Nonetheless, your loan still needs to go through underwriting while you’re under contract for your loan to be approved. Because the underwriter will check to see that your finances have remained the same, the last thing you want to do is move money around while you’re in the process of buying a house. Shifting large amounts of money out or even into your accounts is a huge red flag, says Casey Fleming, mortgage adviser and author of “The Loan Guide: How to Get the Best Possible Mortgage.”

So if you’re in contract for a home, your money should stay put.

5- Applying for new lines of credit
If you apply for a new credit card or request a credit limit increase a few months before closing, watch out: Credit inquiries ding your credit scoreby up to five points. So, don’t let the credit inquiries add up.

“Worse than the actual hit on your credit score is any pattern of trying to borrow more money all at once,” says Glenn Phillips, CEO of Lake Homes Realty. Translation: Applying for multiple lines of credit while you’re buying a house can make your mortgage lender think that you’re desperate for money—a signal that could change your mortgage terms or even get you denied altogether, even if you’ve got a closing date on the books.

6- Changing jobs
Mortgage lenders like to see at least two years of consistent income history when pre-approving a loan. Consequently, changing jobs while you’re under contract on a property can create a big issue in the eyes of an underwriter.

Your best bet? Try to wait until after you’ve closed on your house to change jobs. If you’re forced to switch before closing, you should alert your loan officer immediately. Depending on the lender, you may simply need to provide a written verification of employment from your new employer that states your job status and income, says Shashank Shekhar, the founder and CEO of Arcus Lending in San Jose, CA.

Original Source

Realtor/Broker NC-SC
Coldwell Banker Sloane Realty
16 Causeway Drive
Ocean Isle Beach, NC 28469
Direct: 910.443.0398
Toll-Free: 800.237.4609 X206
Fax: 910.579.5877

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Veterans / Active Military: 9 Home-Buying Costs You Should Keep In Mind

Veterans Buying A Home

For veterans and active military, VA loans are a great way to achieve the dream of homeownership. More than 22 million service members have used these flexible, no down payment loans since 1944.

But when people hear “no down payment,” they often don’t realize they’ll still need some cash on hand to finish the deal.

“Zero down does not mean zero to close,” points out Gwen Chubirko, broker in charge at Genesis Realty Co. in Kannapolis, NC.

The good news is that buyers don’t have to go in blindly: Your VA loan-savvy real estate agent will be your ally in helping you estimate the costs you will need throughout the process, no matter where you live.

“Our goal is to save veterans money and get them into a home that they’re happy with,” says Realtor® John Ulrich, broker associate with Illustrated Properties in Manalapan, FL.

While the amount you need to close will vary according to your location and situation, experts say you can usually expect to need about 3% of the purchase price on hand to close.

Want to break it down? Here are some home-buying costs that veterans and active military shouldn’t overlook:

1. Credit Report
Buyers will often pay this fee, which runs, on average, about $30, to their lender when they first apply for a loan. Be aware that this fee is nonrefundable even if the loan doesn’t close.

2. Earnest Money
The earnest money deposit is key to the home-buying process. It essentially allows you to put a “hold” on a house while you conduct the inspections and appraisal. Without earnest money, you could theoretically make offers on many homes, essentially taking them off the market until you decided which one you liked best. As the name suggests, it shows that you are earnest about moving forward on the purchase.

“The seller wants that buyer to have some money in the game when they take the house off the market,” Chubirko explains.

Depending on where you live, you can expect to put down anywhere from 1% to even 10% of the home’s purchase price as earnest money. (In some highly competitive markets, buyers are making even larger deposits in an effort to stand out.)

But don’t worry! Whatever you put down for earnest money will go toward your down payment and closing costs as soon as the deal goes through. (If the deal falters, you could lose some or all of your deposit, depending on the reason why the agreement tanks.)

3. Appraisal
All VA loans require an appraisal to ensure the property is up to acceptable standards and meets the VA’s Minimum Property Requirements. What does that mean? Well, an appraiser will calculate the square footage, confirm the property is worth the price you’re offering, and that it’s safe, structurally sound, and sanitary. Among other things, the appraiser will check for safe mechanical systems, acceptable roof life, and hazard-free basements and crawl space. VA buyers will often pay for the appraisal upfront, but they may be able to recoup the cost at closing.

4. Home inspection
While the appraisal is required, a home inspection is technically optional (except for a pest inspection, which is required in certain states and can cost roughly $50 to $150). But you never want to take a pass on the inspection, unless you’re buying a tear-down (not with a VA loan!).

The home inspection is your all-too-crucial opportunity to uncover any problems with the house before you make it official. It’s also your chance to point out repairs you can ask the seller to make on your behalf (and those repairs could cost much more than the inspection itself, which is going to run about $300 to $500.)

5. Recording Fees
Recording fees must be paid out of pocket at the time of closing. This is the fee you pay the county to record your mortgage in the public record, and the cost varies from county to county.

6. Real Estate Transfer Taxes
These costs vary by state—from none in Indiana, to a $2 flat fee in Arizona, to $2 per each $500 in value in New York. States, counties, and municipalities collect these taxes to transfer the title of the property from the previous owner to the new owner.

7. Title Insurance
Title insurance protects you (and your lender) in the event there are title issues from previous owners of the home. The average cost of title insurance is around $1,000 per policy, but that amount varies widely from state to state and depends on the price of your home.

8. HOA Fees
If you buy a home in an area where there is a required homeowners association, you will need to pay the application fee, which is variable depending on the local rules. Then there are your monthly dues. For a typical single-family home, HOA fees can cost homeowners around $200 to $300 per month, although they’ll be lower or much higher depending on the size of your unit and the amenities.

9. Loan Origination Fees
An origination fee is one of several that will make up your closing costs. The VA allows lenders to charge up to 1% of the loan amount to cover origination, processing, and underwriting costs.

The bottom line? While VA loans are a great option for veterans hoping to buy a house, being prepared before you apply will ensure no surprises throughout the process.

Original Source

Realtor/Broker NC-SC
Coldwell Banker Sloane Realty
16 Causeway Drive
Ocean Isle Beach, NC 28469
Direct: 910.443.0398
Toll-Free: 800.237.4609 X206
Fax: 910.579.5877

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7 Tax Benefits Of Owning A Home: A Complete Guide For Filing Return

Tax benefits of owning home

What are the tax benefits of owning a home? Homeowners might be wondering this right around now as they prepare to file their taxes. Or, you might be wondering how the new tax plan might affect the tax perks of homeownership when you file next year.

Well, look no further than this complete guide to all the tax benefits of owning a home—for this filing year (2017) as well as the next (2018). Read on for the full rundown just to make sure you aren’t missing anything that could save you major money!

Tax break 1: Mortgage interest
This continues to be the biggie benefit of owning a home for tax year 2017: the ability to deduct the interest on a mortgage of up to $1 million. And the more recent your mortgage, the greater your tax savings.

“The way mortgage payments are amortized, the first ones are almost all interest,” says Wendy Connick, owner of Connick Financial Solutions. (See how your loan amortizes and how much you’re paying in interest with this mortgage calculator.)

Check the latest mortgage rates on
Here’s how this deduction looks for a married couple in the 28% tax bracket (that means a joint annual income between $151,201 and $230,450) who bought a home with a $300,000, 30-year mortgage at a 4% interest rate. They will pay $11,904 in mortgage interest their first year. Once you add in the other itemized federal deductions below, these homeowners can expect to save at least $3,333 in taxes during their initial year of ownership.

What changes next year: The new tax bill allows homeowners with a mortgage that went into effect before Dec. 15, 2017, to continue to deduct interest on loans up to $1 million. But for anyone who closed on a mortgage after that, the cap for deducting interest becomes $750,000—and that’s a combined total for first, second, and any other homes.

Tax break 2: Property taxes
In most instances, property taxes are deductible on your 2017 tax return, says Brian Ashcraft, director of compliance at Liberty Tax Service. And that could spell hefty savings.

According to the U.S. Census Bureau, the average household property tax is $2,127. If you have a mortgage, your taxes are built into your monthly payment. Here’s more info on how to calculate property taxes.

What changes next year: Property tax will no longer be a separate deduction. Instead, taxpayers can take one deduction that includes property tax as well as state and local sales and income taxes, says Ashcraft. And that one deduction is capped at $10,000 for those married filing jointly.

Tax break 3: Private mortgage insurance
If you put less than 20% down on your home, odds are you’re paying private mortgage insurance, or PMI, which costs from 0.3% to 1.15% of your home loan. While the deduction had expired, the new tax bill retroactively made the deduction available for the 2017 tax year.

Here’s how much you’ll save: If you make $100,000 and put down 5% on a $200,000 house, you’ll pay about $1,500 in annual PMI premiums and thus cut your taxable income by $1,500.

What changes next year: This deduction is for itemizers only. Plus, the 2018 tax law nearly doubles the standard deduction. As a result, it is estimated that only about 5% of taxpayers will itemize deductions starting in 2018, says Connick. “In the past it was more like 30%,” she adds.

Tax break 4: Energy-efficiency upgrades
The Residential Energy Efficient Property Credit was a tax incentive for installing alternative energy upgrades in a home. Most of these tax credits expired after December 2016; however, two credits are still available. The credits for solar electric and solar water heating equipment are available through Dec. 31, 2021, says Josh Zimmelman, owner of Westwood Tax & Consulting, a New York–based accounting firm.

What changes next year: The percentage of the credit varies based on the date of installation. For equipment installed between Jan. 1, 2017, and Dec. 31, 2019, 30% of the expenditures are eligible for the credit. That goes down to 26% for installation between Jan. 1 and Dec. 31, 2020, and then to 22% for equipment put in between Jan. 1 and Dec. 31, 2021.

Tax break 5: A home office
If you work from home, your office space and expenses can be deducted, too. According to Vincenzo Villamena, managing partner of Online Taxman, you can take a $5-per-square-foot deduction for up to 300 square feet of office space, which amounts to a maximum deduction of $1,500. Understand, however, that there are strict rules on what constitutes a dedicated, fully deductible home office space. Here’s more on the much-misunderstood home office tax deduction.

What changes next year: This deduction will be eliminated for employees who have an office to go to but work from home occasionally, but it remains for all self-employed people whose home office is the main place they work.

Tax break 6: Home improvements to age in place
Many older homeowners plan to age in place—and if that entails renovations such as wheelchair ramps or grab bars in slippery bathrooms, the cost of these improvements results in a nice tax break. Deductible improvements might also include widening doorways, lowering cabinets or electrical fixtures, and adding stair lifts.

Caveat: You’ll need a letter from your doctor to prove these changes were medically necessary. Furthermore, in 2017 these home improvements will need to exceed 7.5% of your adjusted gross income. So if you make $60,000, this deduction kicks in only on money spent over $4,500.

What changes next year: Nothing.

Tax break 7: Interest on a home equity line of credit
If you took out a home equity line of credit, or HELOC, in 2017 or earlier, the interest you pay on that loan is also deductible. People use these loans to do all sorts of things: pay for college, throw a wedding, or make improvements to their home.

How much you’ll save depends on the amount borrowed, but let’s crunch some sample numbers. If you take out a four-year, $20,000 HELOC at 4% interest, you’ll have an $800 deductible that will save you about $205 in the first year of your loan. (Use this calculator to see how much you’ll save.) Joint-filing taxpayers could deduct up to $100,000 ($50,000 for individuals) in interest paid on home equity debt.

What changes next year: The new tax law eliminates this tax deduction unless that HELOC is used specifically to “buy, build, or improve a property,” according to the IRS. That’s bad news for homeowners hoping to pay off college tuition, but still good if your home’s crying out for a kitchen overhaul or half-bath.

Orignal Source

Realtor/Broker NC-SC
Coldwell Banker Sloane Realty
16 Causeway Drive
Ocean Isle Beach, NC 28469
Direct: 910.443.0398
Toll-Free: 800.237.4609 X206
Fax: 910.579.5877

*Search Coastal Carolina Real Estate in real time on your own. No obligation. FREE sign-up below:

FHA Vs. Conventional Loan: Which Mortgage Is The Right One For You?


FHA versus conventional loan: If you need a mortgage to buy a house, you may find yourself weighing these two options. What’s the difference, and which one is right for you?

While the majority of home buyers might assume they should get a conventional home loan, about 40% end up with FHA loans, which are insured by the Federal Housing Administration. To help you decide whether an FHA or conventional loan is better for your circumstances, here’s more information about each, including their distinct advantages to you as a home buyer as well as what you’ll need to qualify (which may vary by lender).

Conventional loan requirements

Minimum down payment: 5% to 20%
Minimum credit score: 620
Maximum debt-to-income ratio: 43%

Conventional lenders look for borrowers who have well-established credit scores, solid assets, and steady income, says Todd Sheinin, mortgage lender and chief operating officer at New America Financial in Gaithersburg, MD. As such, these loans have higher barriers to entry than the FHA-backed options. You’d better have your A-game on!

Typically, you need at least a 620 credit score and ideally a 20% down payment, although you can put down as little as 5% if you so wish—just know that on any down payment under 20%, you’ll have to pay private mortgage insurance, an extra monthly fee meant to mitigate the risk to the lender that you might default on your loan. (PMI ranges from about 0.3% to 1.15% of your home loan.)

Most conventional loans also require a maximum 43% debt-to-income ratio, which compares how much money you owe (on student loans, credit cards, car loans, and—hopefully soon—a home loan) with your income. So for instance, if your household take-home income amounts to $5,000 per month, that would mean you should spend no more than $2,150 per month on your mortgage and other debts.

Conventional loan advantages

  • Conventional loans don’t require mortgage insurance, as long as you put down at least 20%.
  • Conventional loans can cover higher loan amounts than FHA loans, which are restricted to county limits.
  • Conventional loans, on average, are processed faster than FHA loans.

FHA loan requirements

Minimum down payment: 3.5%
Minimum credit score: 580
Maximum debt-to-income ratio: 50%

FHA loans are great for first-time buyers or people without sterling credit or much money. Created by the Federal Housing Administration, these loans are insured by this government agency, so that guarantees that lenders won’t lose their money if borrowers default on their mortgage. In short, it allows lenders to take on riskier borrowers, while also helping hopeful home buyers in less-than-ideal circumstances achieve the dream of homeownership.

To qualify for an FHA loan, you need at least a 3.5% down payment and a credit score of 580, says Tim Lucas, editor at MyMortgageInsider.com. Applicants with lower credit scores (e.g., 500) may not be out of the running entirely, but must cough up a larger down payment of at least 10%.

These loans also have looser debt-to-income requirements of up to 50%. So for example, if your monthly income is $5,000, your payments for your mortgage and other debts should not exceed $2,500.

FHA loans may be a boon to home buyers (particularly first-timers) who might not qualify for a loan otherwise, but they do have a few disadvantages. For one, they’re usually capped at $417,000 (in certain high-cost areas, the limit is $625,000)—meaning you may have limited buying power. Also, because the federal government insures these loans, you have to pay an upfront mortgage insurance premium (currently, the fee is about 1.75%) and annual mortgage insurance (typically 0.85% of the borrowed loan amount), which remains throughout the life of the loan (or until you can refinance the loan into a conventional mortgage).

FHA loan advantages

  • FHA loans have lower down payment requirements (3.5%) than conventional loans (typically 5% to 20%).
  • FHA loans have lower credit score requirements (as low as 580 for qualified borrowers).
  • FHA loans have less stringent DTI requirements (50% or less) than conventional loans.

FHA vs. conventional loan: Which should you pick?

Generally if you have the means and qualifications to afford a conventional loan, this is the one to opt for, since it has fewer restrictions (and is faster to get). However, if you’re a less-than-ideal home buyer with a mediocre credit score, down payment, or income, then an FHA loan may be the best—or only—avenue open to you.

Check with your lender to know where you stand, or plug your numbers into an online home affordability calculator to get a ballpark idea of whether an FHA or conventional loan is right for you.

Original Source

Realtor/Broker NC-SC
Coldwell Banker Sloane Realty
16 Causeway Drive
Ocean Isle Beach, NC 28469
Direct: 910.443.0398
Toll-Free: 800.237.4609 X206
Fax: 910.579.5877

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Home Shopping: 3 Things You Should Pay Attention To And 3 To Ignore


Home Shopping Tips

Home shopping? Congrats! Buying a home is one of the most rewarding — albeit at times exasperating — things you’ll do in your life. By the time you’re ready to buy, you likely have a sufficient grasp on the basic necessities: a solid foundation, a roof that doesn’t leak, wiring that won’t cause your new home to spontaneously combust, and so on. But what about the other stuff you should be mindful of? You know, the considerations not covered during your home inspection?

These more personal assessments may not be as “dear-god-get-me-out-of-here” detrimental as a crumbling foundation, but they could likewise affect your quality of life for the foreseeable future. So here are a few things to watch for, as well as the ones you shouldn’t sweat.

3 Things to Pay Attention To

1. The amount of natural light
Unless you’re particularly partial to living like a cave-dweller, you want your home to have ample natural light. Besides making everything inside look better, it just makes you feel better. Yet this is often glossed over by some buyers during the house hunt. If you have your sights set on a house, schedule viewings at different times of the day to get an accurate picture of the natural light situation.

If you need secondary motivation outside of how beautiful natural light is, consider this: The amount of natural light in your home could indicate bigger (read: more costly) issues. Too little and you may have to add or modify existing windows, which could run upwards of $15,000.

2. The driveway and parking situation
You may be thinking, “Really? The driveway?” To which the answer is, “Yes. Really, really.” The dimensions of your driveway could very well determine how quickly your new-home infatuation fades. It may seem silly in the grand scheme of things, but consider your parking spot like an extended part of your entryway. If the drive is too narrow, you’ll spend countless hours playing musical cars to squeeze vehicles in. Alternately, if it’s too long and you live in an area prone to snowdrifts, you may never want to leave home during the winter months. Street parking may seem like a viable option, but some cities have strict regulations regarding visitors and even overnight parking. Be sure to ask!

3. The neighborhood
This is the epicenter of the house hunt for many people for one readily apparent reason: You want to like the area where you live. But there are a few less obvious things to consider before you hit the local coffee shop in preparation for your first early Saturday open house. Are there ample sidewalks in case you want to take a leisurely stroll or go for a bike ride? Is it in close proximity to public transportation? If you have kids, there’s little doubt you looked into the local school district. Even if you don’t, though, keep in mind a better school district equals a better resale value. And, finally, read any HOA documents before you sign on the dotted line. It will be tedious beyond belief, but doing so will alert you to restrictions, bylaws, and other issues that could be unwelcome surprises down the road.

3 Things to Ignore

1. The seller’s style
Don’t let that Day-Glo paint in the kitchen be a deal breaker. For that matter, don’t let any paint color put you off of a home you like. You can always repaint and, let’s be honest, what first time home-buyer doesn’t want to hand-pick their own hues anyway? Similarly, if the seller’s fuzzy toilet seat cover stresses you out, don’t worry — they’ll take it with them when they go. It can be hard to envision your stuff in a home that currently clashes with your personal style, but try to remember decor is easily changed and offers you the opportunity to tailor things to your own tastes.

2. Clutter
Hey, life is busy, you know? Sometimes a seller just can’t find the time to pack up the plethora of tchotchkes littering their living room before a showing. Cut ’em some slack (selling is just as stressful as buying) and think outside the box. Just bring a tape measure to make sure there actually is enough room for your belongings and focus on the condition of the house as opposed to its clutter.

3. Unsolicited opinions
You’ll soon find that everyone and their brother has an opinion about your potential new home, from the color of its exterior to the quality of the finishes inside. If you feel as though a particular piece of unsolicited advice may be helpful, by all means, cull that wisdom. Fortunately, though, you can simply ignore anything else. You’re the one who’ll be living there and paying the mortgage. Ultimately, the only person you need to please when you pick your house is you.

Original Source

Realtor/Broker NC-SC
Coldwell Banker Sloane Realty
16 Causeway Drive
Ocean Isle Beach, NC 28469
Direct: 910.443.0398
Toll-Free: 800.237.4609 X206
Fax: 910.579.5877

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Buying A Home 2018: Purchase In Winter Or Wait Until Spring?

Buying A Home 2018

The New Year has arrived, and if you’re looking for a house, you might be down to the wire. Should you go all in and purchase now or wait until the spring?

There are multiple things to consider before purchasing a house; location, square footage, and style are just three of the many factors. Whether or not to buy a home during the winter or wait until the spring is something to consider, as well. Here are six reasons why it might be beneficial to buy before the flowers start to bloom.

You Face Less Competition in the Winter

Most Americans look for houses in the spring and buy in the summer. Approximately 50 percent of all homes are sold during the summer months. Why? Well, many people prefer to close on a home purchase and move when the children are out of school. That way, they’re established in the new house by the time the new school year starts. Many people also prefer to look when the weather is warmer and there is more daylight in the evening.

As a result, if you purchase in the winter, there will be less competition. Fewer buyers will be out there looking, so you’ll likely face less of a bidding war. Many people also want to close during the winter, as the spring market starts very early in the year.

Sellers Are Likely to Be Motivated

Because the majority of buyers purchase in the summer, sellers may be more motivated in the winter. This is especially true if they need to be out of the house due to a job relocation or other consideration with a specific time frame. A motivated seller is good news for a buyer. You can get them to sweeten the deal, either by coming down on the asking price or throwing in some goodies.

Does it look like the stove or refrigerator may need replacing soon, for example? You can ask the seller to purchase a new one as a condition of your purchase. The same goes for a number of other things you might have to upgrade or replace soon.

Interest Rates Are Likely to Rise Next Year

Interest rates, of course, have a large impact on your house payments. The higher the interest rate, the higher the payment will be. While the direction of interest rates is never certain, many observers think that interest rates will rise some time next year. The U.S. Federal Reserve, the government body that sets interest rates, meets several times per year. Not only that, but they meet multiple times a year and tend to hike interest rates in a strong economy to prevent inflation. They could raise interest rates several times next year. In other words, the sooner you buy, the lower the interest rate you can lock in is likely to be.

Housing Prices Are Climbing

In general, housing prices have been climbing steadily over the past several years in most areas of the country. That trend is expected to continue, fueled by the strong economy. If it does, housing prices are likely to be higher by the spring.

Each region and area varies, of course. It’s always wise to check the direction of housing prices in the location you want to buy in by contacting your real estate agent.

Inventory Shrinks in the Winter

Because fewer people look in the winter, many real estate agents and sellers act accordingly. They remove houses from the listing market in the winter, waiting for spring to come. There are approximately 10 percent fewer houses on the market in the winter.

You may have fewer housing options if you’re looking in the winter, but you can ask your real estate agent if they know of any homes that were on the market but withdrawn by sellers. If the sellers are planning on putting their homes on the market as spring approaches, you could be the early bird.

Should you purchase a home now or wait until it starts to get warmer outside? There are many things to think about. The decision depends on what is best for you and the home of your dreams. Happy hunting, in whatever year you choose!

Original Source

Realtor/Broker NC-SC
Coldwell Banker Sloane Realty
16 Causeway Drive
Ocean Isle Beach, NC 28469
Direct: 910.443.0398
Toll-Free: 800.237.4609 X206
Fax: 910.579.5877

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VA Loan: 5 Things You Didn’t Know It Could Do for You

VA Loan Benefits

A VA Loan provides benefits. Because of the bravery and sacrifices of veterans and active military, the rest of the country’s civilians can live the American dream in safety. As one tangible way to say “thank you for your service,” current and former members of the military have access to Veterans Affairs home loans. These unique mortgage options allow veterans and those still serving to own a piece of the American dream by potentially qualifying for homes they might have thought were out of reach.

Veterans, active-duty service personnel, and select Reservists or National Guard members are among those who can quality for VA loans. (Find specific eligibility requirements here.) Wondering what some of the benefits of a VA loan might be? Here are five to consider.

1. No down payment
This is one of the most valuable and touted benefits—and for good reason. Saving enough for a down payment can be the biggest obstacle to buying a home. But a VA loan eliminates that roadblock.

“Most of the buyers I work with don’t have extra resources available, so the fact that they can purchase a home with zero down makes the transaction feasible,” says Benny Dinsmore, a Realtor® with Coldwell Banker in Frisco, TX.

In most parts of the country, qualified buyers can purchase up to $424,100 before factoring in the cost of a down payment. In pricier areas, borrowers can go beyond that threshold.

But beware: The “no money down” aspect of a VA loan shouldn’t be confused with “no money out of pocket,” a common misconception, notes Michael Garcia, broker and owner of TQS Realty in Palm Beach, FL.

A VA loan still requires closing costs and the earnest money deposit (a negotiated amount of money that the buyer puts in escrow to essentially “hold” the house).

“However, that money will often come back at the closing, when the title company will write a check back to the veteran on the spot for the total amount that was put into escrow,” Garcia says.

2. More lenient loan requirements
The required credit score for a VA loan can be lower than for a conventional loan—around 620 for a VA loan compared with a range of 650 to 700 for most conventional loans.

In addition, the required debt-to-income ratio for VA loans is often more flexible than for conventional mortgages.

“It allows someone with less-than-perfect credit and some debt to still be able to qualify for a loan,” Dinsmore says.

3. No mortgage insurance
Most conventional buyers have to pay private mortgage insurance if they put less than 20% down. FHA loans come with their own forms of mortgage insurance. But a VA loan waives that insurance requirement.

And trust us—this one’s important.

“This can be a big savings in monthly payments, since PMI typically runs around $200 a month,” says Realtor® Twila Lukavich with Russell Real Estate Services in Cleveland.

Even though there’s no mortgage insurance, there is a “funding fee”—an upfront cost applied to every purchase loan or refinance. The proceeds help the VA cover losses on the few loans that go into default. But borrowers can roll it into their monthly payment, or pay it all at once. Plus, it’s tax-deductible. And veterans with a service-connected disability don’t have to pay the funding fee at all.

4. Limited closing costs
Legally, veterans are allowed to pay for certain closing costs, which include the following:

  • Appraisal
  • Credit report
  • Origination fee
  • Recording fee
  • Survey
  • Title insurance

But there are some fees that veterans are not allowed to pay. And the VA allows lenders to charge no more than 1% to cover the costs of originating and underwriting the loan.

So for example, if the purchase price is $280,000, the veteran might offer $300,000 and ask for 3% back to cover the closing costs.

“In this way the veteran is essentially financing their closing costs into the loan, meaning less out of pocket at the start,” Dinsmore explains.

5. Extra assistance with appraisals
When a home that a veteran is considering purchasing is having trouble reaching the purchase price during the appraisal process, buyers and lenders can ask the VA appraiser to consider adjusting the valuation before making a final determination.

Appraisers notify lenders in the event the appraised value is likely to come in low, giving buyers and real estate agents 48 hours to supply additional information that the appraiser might not be aware of to help justify the home’s value.

“Typically I assemble an itemized list of upgrades and improvements that the seller has performed on the home in the past three years that the appraiser didn’t know about, and therefore didn’t include in the home value,” Lukavich says.

This process “gives the agents an opportunity to assist the appraiser in making sure they have the whole picture of the home and gives the local agent an opening to help an appraiser be educated on specific local values,” she adds.

It’s just another benefit of VA loans aimed at helping our service men and women buy the home of their dreams.

Orignal Source

Realtor/Broker NC-SC
Coldwell Banker Sloane Realty
16 Causeway Drive
Ocean Isle Beach, NC 28469
Direct: 910.443.0398
Toll-Free: 800.237.4609 X206
Fax: 910.579.5877

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First Time Homebuyers: 9 Grants And Programs Available For You


Buying a home for the first time can be daunting. In addition to mountains of paperwork and new financial terms to sort through, you’ll face costs and fees that can quickly add up.

In short, purchasing a home isn’t a financial step to take lightly. Perhaps that’s why 74 percent of millennials say that saving for a down payment still represents the most significant hurdle to achieving the American dream, according to a 2016 survey.

Fortunately, many grants and programs exist to help first-time homebuyers. Here are nine:

1-FHA Loan
With this option, the Federal Housing Administration, or FHA, insures the mortgage. The FHA is an agency that operates within the U.S. Department of Housing and Urban Development, or HUD.

Since the FHA insures the loan, lenders receive a layer of protection and won’t experience a loss if you default on the mortgage.

FHA loans typically come with competitive interest rates, smaller down payment requirements and lower closing costs than conventional loans.

If you have a credit score of 580 or higher, you could be eligible for a mortgage with a down payment as low as 3.5 percent of the purchase price.

2-USDA Loan
While not very well known, the homebuyer assistance program of U.S. Department of Agriculture, or USDA, focuses on residences in certain rural areas—and no, you don’t need to purchase or run a farm to be eligible.

Through this setup, the USDA guarantees the loan. There may be no down payment required, and the loan payments are fixed.

Applicants with a credit score of 620 or higher typically receive streamlined processing, but there are income limitations, which can fluctuate based on region.

3-VA Loan
The U.S. Department of Veterans Affairs, or VA, helps service members, veterans and surviving spouses purchase homes. The VA guarantees part of the loan, which makes it possible for lenders to offer some special features.

VA loans offer competitive interest rates and require no down payment. You may not be required to pay for private mortgage insurance, and there isn’t a minimum credit score needed to be eligible.

If it becomes difficult at some point to make payments on the mortgage, the VA can negotiate with the lender on your behalf.

4-Good Neighbor Next Door
The Good Neighbor Next Door program is sponsored by HUD and focuses on providing housing aid for law enforcement officers, firefighters and emergency medical technicians and pre-kindergarten through 12th grade teachers.

Through this program, you could receive a discount of 50 percent off a home’s listed price in specific regions known as “revitalization areas.”

Using the HUDHomes website, you can search for properties that are available in your state. As part of the program, you’ll need to commit to living in the home for 36 months.

5-Fannie Mae or Freddie Mac
Fannie Mae and Freddie Mac are government-sponsored entities [GSEs]. They work with local lenders to offer mortgage options that benefit low- and moderate-income families.

With the backing of Fannie Mae and Freddie Mac, lenders can offer competitive interest rates and down payment amounts as low as 3 percent of the purchase price.

First-time homebuyers could also be eligible for home financing education programs with the HomePath Ready Buyer program through Fannie Mae.

6-Energy Efficient Mortgage
This type of loan’s purpose is to help you add improvements to your home that will make it more environmentally friendly. The federal government supports Energy Efficient Mortgage loans by insuring them through FHA or VA programs.

The key advantage to this grant is that it allows you to create an energy-efficient home without the need to make a larger down payment. The amount is rolled into your primary loan.

Some improvements you can make include installing double-paned windows, new insulation and a modern heating and cooling system.

7-Federal Housing Administration 203(k)
If you want to purchase a fixer-upper, the 203(k) rehabilitation program may be a solid fit.

This type of loan, backed by the FHA, takes into consideration the value of the residence after improvements have been made. It lets you borrow the funds you’ll need to carry out the project and includes them in your main mortgage.

8-Native American Direct Loan
Since 1992, the Native American Veteran Direct Loan program has helped Native American veterans and their spouses purchase homes on federal trust lands. The VA serves as the lender.

If you’re eligible, you won’t be required to make a down payment or pay for private mortgage insurance.

This first-time homebuyer grant also offers low closing costs and a 30-year fixed-rate mortgage.

9-Local First-Time Homebuyer Grants and Programs
In addition to the grants and programs provided by the federal government, many states and cities offer help for first-time homebuyers.

Before purchasing a home, check your state or city’s website for information on housing aid available in your area.

You might also consider contacting a real estate agent or local HUD-approved housing counseling agency to learn more about grants and programs that could fit your situation.

Original Source

Realtor/Broker NC-SC
Coldwell Banker Sloane Realty
16 Causeway Drive
Ocean Isle Beach, NC 28469
Direct: 910.443.0398
Toll-Free: 800.237.4609 X206
Fax: 910.579.5877

*Search Coastal Carolina Real Estate in real time on your own. No obligation. FREE sign-up below:

Fixer-Upper: Are You Buying One? Better Read This First

Buying Fixer-Upper

Buying a fixer-upper is one of those endeavors that looks so fun on TV. But make no mistake: In real life, it’s a huge risk, and a whole lot of work.

So before you set out to swoon over some hovel you dream of transforming into your dream home, you should learn a few things about how to find a diamond in the rough rather than a money pit—and how to do the math to make sure it’s worth all the sweat equity you’re about to pour into it. So here’s what you really need to know about buying a fixer-upper.

Find the worst house on the best block

Rule No. 1? You can’t go wrong with the age-old adage of buying “the worst house on the best block,” says Dan Bawden, Remodelers Chair of the National Association of Homebuilders and veteran fixer-upper contractor. The reason: The high price of comps—i.e., homes of similar size nearby—will have a positive effect on the price of the homely bargain you’re buying. Once it’s fixed up, of course.

Bawden’s rule of thumb is that you should aim to spend 20% to 25% less than what a property in good condition would cost in the area. Do your research and make sure you’re comparing apples to apples: Look at price per square foot and numbers of bathrooms and bedrooms. And understand that price isn’t the only factor to consider (more on that next).

Find a fixer-upper that needs cosmetic changes

Bawden cautions against buying anything with major flaws that will eat up your renovation budget. The best fixer-uppers are ones that mostly need cosmetic updates—things like kitchen and bathroom renovations, new floors, siding repair, or wallpaper removal. When it comes to big things like foundation problems, termite damage, or evidence of water damage (especially in coastal areas), these should be deal-killers. If you’re considering a house that needs serious upgrades to the electrical systems, roof, or HVAC, make sure you’re getting enough of a discount to cover the expense of these repairs, which can be sizable.

Get a contractor to estimate how much it’ll cost

If you are planning to hire a contractor to do the work, have him give you a bid for the job before you make an offer on the house. You may have to pay the professional a few hundred dollars to walk through a potential home and estimate the renovation costs, but it’s worth it.

“Think of it like another home inspector,” suggests Bawden. Once you have your figure for the remodeling work, add at least 5% for unforeseen issues, since there will always be some surprises. Even the best contractor can’t see through walls, and you don’t want to blow your budget if you pull up the linoleum in the kitchen and find rotten boards below.

Do the math before you make an offer

The time to figure out if a fixer-upper is really a good deal is before you buy it. It’s easy to get swept up in planning a major renovation, but for your long-term financial well-being, you have to make sure the numbers work first.

To get the green light, you should know confidently that after your renovations are complete, you can sell the place for at least as much money as you’ve put in (ideally more). Got that? Even if you plan to live there forever, this is key. Because life is unpredictable. You never know when you’re going to have to move unexpectedly, so you should never invest in a home where you can’t recoup the costs, if need be.

So first, determine what the house would sell for with the upgrades you’re planning. Let’s say hypothetically $300,000. Let’s also say that your contractor tells you it’s going to cost $80,000 to do your repairs (including your 5% wiggle room). To make the numbers work, you should not pay more than $220,000 for the house. If, for instance, the home seller won’t accept less than $240,000, that may mean you should rethink your renovations and spend only $60,000.

Finally, determine whether you can live in the house while doing the renovations. If not, you’ll have to factor in rent during the time it takes to renovate (and you’ll want to give yourself a few months’ padding there, too).

Stick to your budget

While totaling your reno budget, make sure you’ve picked out the finishes you want, too, because it’s very easy to splurge when shopping for things like faucets, backsplash tile, or appliances.

“You can go to the store expecting to spend $60 on a faucet and fall in love with a lever-handled faucet that looks like angel wings … and costs $250,” says Bawden. “It’s human nature to say, ‘Why are we spending all this money to cheap out on the little things?’ But it can add up fast and really inflate your budget.”

Look into home improvement loans

Lack all the cash you need to finance your fixer-upper? There are ways to renovate with borrowed money, such as via FHA 203(k) and Fannie Mae HomeStyle loans. As with the mortgage on your house, you have to approach lenders for approval, make a small down payment, then pay it back over time. Keep in mind that you also have to hire an “approved” contractor, who’ll submit a bid for the project with the loan paperwork. So if you go this route, prepare for some extra red tape. Here’s a guide to types of home improvement loans, and their pros and cons. Just keep in mind that the more you borrow, the more you’ll have to pay back!

Original Source

Realtor/Broker NC-SC
Coldwell Banker Sloane Realty
16 Causeway Drive
Ocean Isle Beach, NC 28469
Direct: 910.443.0398
Toll-Free: 800.237.4609 X206
Fax: 910.579.5877

*Search Coastal Carolina Real Estate in real time on your own. No obligation. FREE sign-up below: