Mom on Swing

If you are on the fence and are financing FHA, you need to purchase a home prior to April 4th. There is an important FHA change coming April that you need to be aware of. At present, the seller can contribute up to 6% towards closing costs.   Starting April 5^th, the seller is only allowed to contributed 3% max towards closing costs.

It will also become more expensive to obtain a home loans starting April 5^th due to another change.  Currently the upfront mortgage insurance premium is 1.75% on all FHA loans. This is added to the base loan amount. Starting April 5^th, this will go up to 2.25%.  This means the very same 200k loan will cost $1,000 more on April 5^th to finance vs April 4^th.

Call Geoff Brown at New American Mortgage to get pre-approved then call me to find your dream home QUICK!

And by the way, if you want to search for homes with no hassle, search here-

WWW.SEARCHSOUTHCHARLOTTEHOMES.COM

I share my friend, Miami Realtor Ines Hegedus-Garcia’s appraisal that whether you’re in Miami or Charlotte nobody is happy with the current state of residential real estate appraisals.

Home appraisals used to be, more or less a check off (not a good thing), a part of the process to ensure that someone did not buy a home that was wildly over or under priced (as Martha would say that’s a good thing). Nevertheless the exact and only true value of a house is the price that a buyer is willing to pay and a seller is willing to accept, today – kinda like a share of stock – yes the free market is funny (and works great) that way! Sarcasm aside appraisals are important and (when done right**) they do provide an invaluable measure for homeowners and lenders alike. Here’s the rub there is no right way to do an appraisal and the most professional appraisers will tell you even the best appraisals are subjective and as much art as science.

The problem started about 15 years ago when Americans stumbled on a treasure chest literally under their feet - the home equity line – the mother lode first for home improvements (good), then boats (worse) and ultimately even bottles of three buck chuck (bad) at Trader Joes (now in Charlotte). We went crazy using our newfound “home-wealth” to bankroll (most of) our American dreams. There was only one pesky hitch to get into the chest (your own chest) you had to have a key which was held by the bank – and to get to the key you had to go through a gatekeeper, the appraiser! Long story short – equity lines flowed like mountain springs as many appraisers checked off on treasure chests bigger than the house – not a problem since American home values would increase forever and ever (we’ve always been an optimistic lot). Well in 2007/2008 the party ended – the treasure chests slammed shut, fingers and dreams were crushed.

Past is always prologue and all that treasure hunting inflated home values beyond belief. As we know banks (and regular Joes) got their heads and foreclosure notices handed to them as home values and loans unraveled.

What now? Well the lenders have predictably overdosed on reality and the appraisal process is feeling the brunt of this fervent – albeit understandable fiscal conservatism. The home valuation pendulum has now swung as far right as it was left and we are left with the scarily governmental HVCC Home Valuation Code of Conduct which in part “…attempts to curb inflated appraisals by refusing reports from people selected, retained or compensated by mortgage brokers and real estate agents.” Appraisers are selected by “round robin” – many are not familiar with the neighborhoods they appraise and the unintended consequence of this abject objectivity is the process has become a black hole where …

A new code of conduct, that sounds great, right?  Well as @Ines so deftly describes in her MIAMISM blog post Appraisals Kill Deals ~ in practice that code of conduct seems more like a cloak of Teflon – no over-values are gonna stick to me says Mr. or Ms. Appraiser – undervalue is de rigueur. Result? Inconsistent, uniformed appraisals are killing reasonable real estate transactions (indiscriminately and unnecessarily). What should you do — now more than ever make sure you’ve got the right agent – look for the most smart, the most informed, the most candid agent you can find and for now anyway, pray for a return to common sense!

September 14: START LOOKING AT HOMES - Charlotte’s under $250,000 housing market is hot and it will get hotter closer to the deadline. See the Charlotte Observer article “Bargain houses selling as others keep sitting“

October 5: SUBMIT OFFER - Let’s talk about about closing dates with the rush to beat the deadline and new truth in lending restrictions you MUST give yourself six weeks to close! To make matters worse the deadline (November 30) is a Monday, and the week prior to the First Time Home – Buyer Tax Credit deadline is Thanksgiving! Yes to meet the December 1st deadline you better be submitting your offer to purchase no later than October 5 – time is of the essence!

November 30 - You need to be cuddled up with some hot cocoa next to fireplace in your new den!

Everybody has questions about the First Time Home-Buyers Tax Credit program, it’s a government program after all! We can help you with answers email us here or we can put you in touch with a professional, knowledgeable lender who can help you out — don’t let this opportunity pass you by!

But today I wanted to talk about something near and dear not to every Charlotte homeowoner’s heart…Charlotte Mecklenburg property taxes, or in the latin Ad valorem taxes – (don’t you they use latin or french when they want something to sound more noble and magnanimous.) By the way for 2008 it’s $1.2973 per $100 assessed value.

In today’s Charlote ObserverApril Bethea has as really great article Can I Appeaal Tax Value?. In part she reports

“The start of the new year kicks off the period when property owners can appeal the tax values on buildings and land, and officials from across the Charlotte region said they’ve been peppered with requests similar to Stanberry’s. But N.C. law doesn’t allow current economic conditions to be used as a reason to change a property’s tax value… The law catches many homeowners by surprise. “A lot of people assume quite naturally that current sales information would be a valid reason for an appeal,” said Chuck Hicks, real property appraiser manager for Mecklenburg County. read the full article here”

Things that can be considered in appeals:

• Correction of clerical or mathematical error, or error in applying schedule of values used in most-recent property reassessment.

• Physical changes to property, such as addition or removal of a structure.

• A rezoning change, or adoption of a conservation or preservation agreement.

Things that cannot be used in appeals:

• Normal, physical depreciation of buildings.

• Economic changes affecting the county.

• Improvements to property such as repainting of buildings or other structures, and landscaping.

So what about this First Time Homebuyer Tax Credit? Is it for me? How does it work?

Here’s what the National Association of Homebuilders says about the homebuyer tax credit program…

“Opportunity of a Lifetime for First-Time Buyers

For aspiring home owners who find their goal stubbornly elusive, newly enacted legislation providing a tax credit of as much as $7,500 for first-time home buyers might just be the opportunity of a lifetime. But like so many of the good things in life, time is of the essence for buyers who want to take advantage of this outstanding opportunity. Only homes purchased on or after April 9, 2008 and before July 1, 2009 are eligible.”

Check out some great information on the  National Association of Homebuilders website or if you prefer a question & answer format check out Charlotte’s own residential real estate guru Bill Gallagher’s excellent and informative blog post about the first time homebuyer tax credit. (Bill owns Superior School of Real Estate here in Charlotte) Thanks Bill for this concise explanation! We know the ropes too so please don’t hesitate to call us — we’ll be more than happy and ready to help you find you first Charlotte home or your tenth!

We have invited one of Myers Park Mortgage’s best (and a really good guy!) bankers, Terry Stutts to write for us about some of the more interesting and misunderstood aspects of financing your new Charlotte home. Welcome Terry what do you have for us this week?

“Today I’d like to share with you some thoughts about an often vexing problem for homebuyers (especially first time buyers) Down Payment Assistance. Down Payment Assistance (DPA) for home mortgages, seems to be going the way that 100% financing has recently gone. Basically, GONE as in gone goodbye! President Bush last week signed a bill that forbids the FHA from insuring mortgages in which the down payment comes directly or indirectly from an interested third party (usually the seller). This bill takes effect October 1, 2008 (also effective 10/1 the minimum down payment for an FHA loan will increase from 3.0% to 3.5%.) DPA is a process that allows the seller to charge more for his home and return that money to the buyer to be used as a down payment. This allows the buyer to purchase a home effectively with little or no down payment.

Of course this is Washington so while this law takes effect, there is a new “counter bill” being introduced that if passed and signed into law will allow DPA to continue indefinitely. Another fine example of your tax dollars at work! This mortgage business is going through a lot of changes ~ at Myers Park Mortgage we feel it is our job to do the homework so our clients can make the best  and most educated decision. I am happy to answer any question you might have ~ please do not hesitate to call Terry at 704-887-9405 or by email“ 

Thanks Terry, we get a lot of questions about down payments so this will certainly help our clients ~ we look forward to your next guest post!

Bottom line #1 Use common sense “if it looks to good to be true it probably is” and #2 use a good Realtor, Realtors are trained and operate under a strict code of ethics to serve the customers need first!