People looking to extract equity from their homes have increasingly been turning to cash-out refinancing, industry observers say. A big reason that people are tapping their equity through refinancing comes down to dollars and cents, according to Amy Crews Cutts, deputy chief economist with Freddie Mac. Because home-equity loans and lines of credit are most often tied to the prime rate, now at 8.25 percent, those options have gotten more expensive even as long-term mortgage rates have remained relatively low, with the 30-year loan averaging about 6.25 percent.

“It’s all about the prime rate,” said Michael Kodsi, chief executive of Choice Mortgage Bank in Boca Raton, Fla. A good number of his clients would rather take cash out through refinancing — whereby their mortgage rate will be fixed — than take out a loan tied to the prime rate, which has the potential to fluctuate and “could go higher down the road,” he said. Freddie Mac said 89 percent of the loans it owns that were refinanced in the third quarter of 2006 had loan amounts at least 5 percent higher than the original mortgage balances, the threshold for considering a loan to be a cash-out refinancing. It’s the highest share of cash-out refinance loans reported since 1990. (more…)

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We North Carolinians find ourselves in 2007 standing on the brink of a deep but narrow canyon. Across it lies a greener and happier future, secured by substantial new investments in land and water conservation. We’re tempted to borrow the money we need and leap across the gap — but looking over the edge we see far below the dangerous rocks of a bond rating decline. To the left of us there’s the sturdy bridge of dedicated conservation funding, spanning the canyon. But the bridge is guarded by twin giants Realtus and Developus. Behind us we hear the din of the steadily advancing armies of Overdevelopment, so we know there is no time to lose.

Last year the Governor’s Office opposed putting a conservation bond referendum on the ballot, citing fears of a costly decline in the state’s excellent bond rating. The obvious work-around is a dedicated funding source that could guarantee repayment of the bonds over time, but development interests have often managed to block the most reasonable funding mechanisms for conservation. For example, conservationists would love to simply raise the real estate transfer tax, currently set at a modest $1 for every $500 in property value. Real estate agents, however, oppose raising the transfer tax, which they argue is discriminatory in its focus on just one industry, given the fact that land conservation benefits us all. (more…)

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NC Real estate may be getting cheaper. But homes are always expensive. Like any good knee-jerk contrarian, my enthusiasm for the property market grows as the bad news piles up. Only last week, the Federal Reserve’s “beige book” report on regional economic conditions noted that housing markets continue to soften, with sluggish home sales and falling prices in some areas. So is it time to buy the NC lakefront, NC riverfront or NC vacationhome you’ve always wanted?

According to home-finance corporation Freddie Mac, U.S. house prices climbed 6.2 percent a year over the past 30 years, versus 4.3 percent for inflation. Beating inflation by 1.9 percentage points a year is (pun intended) nothing to write home about. To make matters worse, after the current decade’s blistering performance, even slimmer returns may lie ahead. Instead, as you toy with whether to trade up to a larger place or purchase a second home, your real focus should be the dividend. This dividend is the rent you receive or, if you live in the house yourself, the “imputed rent” - the rent you would have paid if you didn’t own the place. This rent might be worth 7 percent or 8 percent of a home’s value each year, though the figure will vary depending on the location. (more…)

search for : NC Real estate, NC lakefront, NC riverfront, NC vacationhome

Most people think of a mortgage as a means to an end. After all, you buy a house, not a home loan. But a mortgage is much more than the path to home ownership. It is a financial implement that must be managed, just like any other financial investment. “Think of it as part of your financial tool kit,” suggests Susan Martin, a vice president and spokesperson for Countrywide Home Loans, one of the country’s largest lenders. “And it’s a dynamic financial tool, not a static one.” Years ago, people took out 30-year loans, threw their mortgage papers in the drawer and didn’t take them out again until 360 payments later. Then they held mortgage-burning parties.

If rates have risen, and it looks as if yours is going to reset higher, it also might be time to refinance into a loan that’s more stable, or maybe another ARM with a lower start rate. Another advantage of today’s multiple-choice mortgage market is that you can match your loan to significant life events, not just changes in interest rates. If your spouse decides to give up his or her job to stay home with the baby, maybe you can trade in your current mortgage for one with payments that more closely match your reduced income. If you just took a new job that pays significantly more, perhaps a new, shorter-term loan with larger payments is now in order. Maybe a loved one has had a major illness; it’s time for Junior to go to college; or an investment opportunity presents itself. All of these are personal events that have a significant effect on your bottom line, and a new mortgage might be something to consider. (more…)

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Do you have any ideas on how to clean my Cadet baseboard heaters? When I first turn them on for the winter, I get a black film on the wall above the heater. What should I do?

What’s probably happening is that during the time the heater is off, dust or other material is accumulating inside the unit. When the heater is turned on in winter, this material burns off and streaks the wall.

First of all, try to minimize the dust buildup. This might be done by rearranging furniture, increasing fresh air in the room, or increasing air flow in front of the heaters. Then, prior to starting the heater in the winter, make sure it’s clean. For their baseboard heaters, Cadet recommends that you remove the front cover, and use a vacuum to clean out the inside of the heater before starting it for the season. Be sure the power is off before removing the front cover, and be careful not to damage the aluminum fins inside the heater. (more…)

Research from Coldwell Banker Howard Perry and Walston shows the real estate market in North Carolina continues to perform well and is expected to stay strong. According to industry estimates, 2006 will be the third-best year on record for home sales, with an all-time high inventory of homes for sale on the market and interest rates comparable to 40-year lows, offering buyers a broad range of affordable choices at present. For those already owning homes, the national median price of houses purchased 10 years ago has increased 88 percent.

The number of U.S. households is expected to increase 15 percent during the next decade, creating a continued high demand for housing. In terms of its own business, Coldwell Banker Howard Perry and Walston found that of all the visitors in October to its Web site (http://www.hpw.com), 30 percent were out-of-state buyers. Included among those visitors were international as well as national customers, indicating worldwide interest from people to purchase a home in North Carolina. Coldwell Banker Howard Perry and Walston has the state’s number one real estate Web site. (more…)

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A second report, in as many days, about apartment market jitters says too many unsold condos could gum up the works my mid-year in what was considered a hot rental market. On January 18, RealFacts said the apartment market had been going great guns until landlords shot themselves in the foot by raising rents too quickly. RealFacts.com said renters’ backlash, rather than seasonal factors, in the last quarter of 2006 produced unexpectedly high occupancy rate dips in every one of the nearly three dozen metros it tracks in 15 states. The next day a National Association of Homebuilders Washington Hotline newsletter carried the headline “New Multifamily Data Forecasts A Bumpier 2007.”

The apartment market got a boost last year from the high-priced housing market which forced shelter seekers into more affordable apartments and rental rates took off with the demand. In NAHB’s preliminary forecast, due in full at the Multifamily Economic Forecast & State of the Industry session during the International Builders Show on Feb. 8, recounts how demand for rental apartments slowed even before RealFacts’ fourth quarter report. Ron Witten, industry analyst, who briefed NAHB s Multifamily Leadership Board, said demand for rental apartments slowed substantially in the third quarter of 2006, “in part, because a slowdown in job growth slowed the formation of new households.” Witten blamed sluggish job growth, accompanied by falling mortgage rates, for contributing to the lower demand for rentals. (more…)

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Another housing prognosticator has weighed in with a prediction that the downturn is in the, uh, well, the home stretch. This time, it’s David Berson, chief economist at Fannie Mae, who told reporters last week that the “biggest declines are behind us.” “There are still some (declines) to go,” he said at a National Press Club briefing, where he presented Fannie May’s 2007 outlook for the economy and mortgage market. “But the worst is over.”

Although key housing market benchmarks have stabilized in recent months in response to lower mortgage rates and warmer-than-normal temperatures, Berson expects sales to fall further in 2007. He is predicting a 7-8 percent drop in sales, which he said “is more than just a little bit, but not as much as last year.” Fannie Mae expects that when all the numbers are in, new homes sales will be down 17.2 percent for 2006 and existing homes will slip by 8 percent, to 1.06 million and 6.51 million, respectively. For 2007, new home sales will dip 7.1, to 999,000, while existing home transactions will fall another 8 percent, to 5.98 million. (more…)

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Indicators continue to suggest, instead of buying a move-up, it’s not a bad time to turn your existing home into one — before the spring thaw awakens hibernating homeowners with the same idea. Home improvement demand remains soft and thanks to woes in the new home market, material prices are as low as they’ve been in years, and the building industry is flush with contractors able to do the work.

Even if home prices don’t stabilize, as others expect, at least in some regions, home improvements are a way to shore up the value of your home. According to Remodel Magazine, on average, most common remodeling jobs return at least 70 percent of the cost of the work to the value of the home. Cheaper materials. Wood products industry information source Random Lengths said it’s “Framing Lumber Composite Price” (a weighted average of 15 key framing lumber items’ prices listed in dollars per thousand board feet) was $288 in December 2006, the lowest December price since 2002 when the figure was $276. Another measure, Random Lengths’ “Structural Panel Composite Price” (a weighted average of 11 key panel items’ prices in dollars per thousand square feet) came in at $266 in December, also the lowest level for that measure since December 2002. (more…)

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After several years of a booming real estate market - one that was decidedly to the seller’s advantage - the industry has taken a swing in the opposite direction in recent months. Higher interest rates and a greater inventory of houses is pushing the market in the buyer’s favor. This means that enterprising individuals ready to make a purchase may come away with more than just a good bargain.

To entice people to take out mortgages in spite of rising interest rates, some lenders and builders are offering special programs. Many home builders are using “buy-down” programs, in which they buy down a mortgage by two percentage points in year one and one point in year two. This can lead to substantial savings. But watch out for deals that offer flashy savings early on but sucker-punch you later during the loan term. Pre-payment penalties or early termination fees may be in store for those who don’t do their homework before signing on the dotted line. (more…)

search for : booming real estate market, Higher interest rates