Real Estate Outlook: Housing Rebounding – Get IN NOW!

The big economic news for housing this week is all about sales.

Housing sales and pending sales contracts are up, dramatically in the North Carolina area, and a rebounding real estate sector could soon start stimulating the broader economy.

Federal Reserve Chairman Ben Bernanke told Congress last week that essentially the worst is over, the housing market is stabilizing, and we're heading out of recession in the second half of the year. Pending home sales soared by 6.7 percent in April, the third straight month of significant increases, and the highest pending sale total for any month in the past seven years.

This is all great and fantastic news for the economy, and it means that YOU need to react and get into the game.

Low prices nationwide, combined with mortgage rates at near-record lows, have pushed the National Association of Realtors' Affordability Index into record territory. In April the index hit its second highest market ever, based median household income and the monthly payments needed to buy the median cost home.

On the mortgage front, applications to purchase homes continued to rise last week -- up by 4.3 percent -- according to the Mortgage Bankers Association.

But here's the sobering news: It's becoming increasingly clear that low mortgage rates are not going to be around forever. That is not a bad thing, it just means that you need to take advantage of the low rates now. Average thirty year fixed rates took their biggest jump in half a year last week on bond market jitters. The average rate for 30 year fixed topped five and a quarter percent, up from 4.8 percent the week before. And 15 year rates went to 4.8 percent from 4.4 percent.

So, if you are seriously considering getting off the sidelines - now that prices are back to pre-boom levels in some markets and sales are on the upswing, jump in sooner rather than later, if you want the lowest mortgage rates. Trust us, it is time to buy! Contact Rich Ferretti at Jamison Realty with any questions, and let’s get to house-hunting!

Rich Ferretti
Mint Hill Realty
Charlotte, NC
Want more information about the Mint Hill, Matthews and Charlotte area real estate market?
Check out www.minthillrealty.com

Mortgages: Still Strong, and Still Available!

Americans have been anxious to get back into the real estate market. They have, however, been naturally skeptical and tentative as the economy struggles with a global crisis. Trust me though, it is not all doom and gloom out their in the world of finance. The credit crunch has not decimated the mortgage industry, in fact – things are looking good for those looking for loans. A “Mortgage Origination” is the creation of a new mortgage. Mortgage originations are tracked as a measure of the health of the mortgage industry. Mortgage originations decreased 16.6% from 2005 to 2007. But, during the first quarter of 2009, the mortgage industry experienced strong origination activity due to a number of factors:

1) The ongoing low interest rate environment. Interest rates are at a record low, this is the time to borrow money and get locked into a percentage that won’t come along again in your lifetime.

2) A drop in the national median home price. Incredible homes all over the area are being sold for next-to-nothing. You can find plenty of sweet properties at incredible bargains.

3) An abundance of homes on the market. As said above, there are some incredible real estate deals out there. But it’s not a land of scarcity, it is still a land of plenty. You can find an inexpensive option that fits your “dream” home.

4) New government programs that are available to ALL to encourage homeownership, as well as refinances.

These fantastic four of reasons have lead to a kind of perfect storm for home buyers. It means that credit and financing options continue to be available to qualified borrowers. Wells Fargo & Company, one of the most solid lenders in the country, issued a statement saying it expects to report record originations in the first two quarters of the year.

Also, the Mortgage Bankers Association, with whom Jamison Realty works closely, now reports that the Federal Reserve's plan to buy up more than a trillion dollars' worth of mortgage assets from the credit markets is actually working. As mortgage rates plummet to levels that haven't been seen in decades, the number of mortgage originations is soaring.

One word of caution, the increased number of mortgage originations and mortgage refinances has caught many lenders off guard and understaffed. Stringent lender guidelines and regulations are essential in order to avoid another mortgage crisis; but with that kind of oversight comes painstaking underwriting that takes time and is labor intensive. Technological enhancements and upgrades are being implemented at many major lending institutions to help speed up the underwriting process, and mortgage companies are hiring more staff. Bank of America recently added 5,000 new employees just to handle the renewed activity. What does this mean for you? Don’t expect to be approved overnight. Do your homework, dot all your “I’s” and cross all your “T’s” and be prepared to relax. Good things come to those who wait!

Rich Ferretti
Mint Hill Real Estate
Charlotte, NC

Want more information about the Mint Hill, Matthews and Charlotte area real estate market?
Check out www.minthillrealty.com

How to Finance that Bargain Property

Charlotte’s current buyer’s market and higher foreclosure rate means that there are some great buys are out there, but do you have the money to make that investment?

So you have been reading the papers and watching the news. Falling real-estate prices may have you thinking that maybe now would be a good time to buy a new house as an investment or first home—and you would be right. Now is a great time to buy—if you have the money available and credit to do that.

Credit companies have become increasingly more conservative with whom they will extend mortgages to and at what rates. As they face their own financial crisis, they too are looking at “good deals and “sure things.” There decision is a business one, not clouded my sentimentality or dreams.

Of course if you are a borrower with excellent credit, high income, few debts and a large down payment you will likely have no problem getting a loan. However, if you are an applicant who don't meet those criteria, you may need to employ other strategies to secure loans to buy that great deal.

Take a long hard look at your personal finances…Are all of your credit cards paid off, or at the best rate possible? Do you have a significant amount in savings and/or assets you can sell (a car, a boat, etc.) Do you have equity from another property? Generally, the more money that you have to put down, the lower the interest rate you will be offered.

A business transaction…Many people face challenges when financing their first or second home, yet some investors are able to secure loans for several real estate investments. How do they do it? The success of acquiring these loans is directly tied to their ability to present the bank with a compelling business case for why the investment will succeed. For investment properties, prospective buyers need to demonstrate they will use case flow: rent minus mortgage, tax and maintenance, will cover the costs of ownership over a period of years. If you are a buyer who intends to live in the home yourself, having this breakdown of expenses is also important for you and the mortgage company—they want to make sure you can budget for the payments, expenses, repairs, and all of the other financial responsibilities you have.

Check with the Government…The federal government actively promotes homeownership. It is true that it wants you to own a home, and so there are many programs available for financing, even for people who don't qualify for traditional bank loans. However, these programs generally don't serve investors. Options like those provided by the Federal Housing Administration which runs the largest program, is popular since the FHA protects the lender from risk of loss, the lender is able to make loans to borrowers with riskier credit profiles. These programs are usually extended to first time home owners.

Other federal programs include:

The Veterans Administration Home Loan Program—provides mortgages to veterans.

The Department of Housing and Urban Development's Teacher Next Door Program—helps teachers buy homes.

The Department of Agriculture's Rural Development Housing & Community Facilities Program—extends financing to low-income buyers in rural areas.

Alternative Lenders… A fast-growing alternative source of funding is called "peer-to-peer" lending. Prosper.com, which operates a Web site through which people borrow from and lend to one another, provides loans advertised at rates typically 3 percent to 5 percent below what credit-card companies would charge. Now, the loans on Prosper and similar sites tend to be less than $25,000, however, this option works well for down payments and often, banks will be more apt to extend a mortgage if there is significant down payment money available.

Know when is when…If you are finding that getting a loan of any kind is just not happening, there may be a good reason. Perhaps the property you have your eye on isn't the great buy, and everyone see it but you. You need to know when to walk away if there is any reason this does not seem like the “deal” you thought it was. Or maybe your financial situation just isn’t one that can take on an additional mortgage. Remember that you need to be smart when making a property investment that you could be paying for, for the next 20-30 years!

Want more information about the Charlotte area real estate market? Check out www.richferretti.com