Six Steps to Buying a Home in the Triangle, NC

Six Steps to Buying a Home in Apex, Cary, Holly Springs, Fuquay-Varina, Raleigh -- anywhere in the Triangle, NC!

Knowledge opens doors and this is especially true when it comes to buying a home.  Because a home is most likely the largest financial transaction you will ever make, the decision may feel overwhelming.  Whether you are purchasing your first property or your tenth, it is wise to navigate the process carefully and with good advisors.  Take heart, my intrepid potential home buyers!  I’m here to give you the information you need to make smart decisions. 

Are you tired of your rent constantly increasing & not having anything to show for the thousands you pay your landlord every year?  This may be the year for you!  In the next series of blogs, I will outline in clear, simple terms what you can do to be relaxing in your own backyard this spring!  Today we will begin with:

Step One:  Decide if Buying is Right for You.  It’s not for everyone.  Here are the financial considerations.   You are probably paying 67% more in rent than you would in a mortgage*.  Buying is now 45% cheaper than renting in the 100 largest US metros.  Ask yourself:  how much money might I actually be saving by buying?

The combination of low interest rates, low home prices have combined to make this the perfect storm for buyers.  Like all good things, this will not last.  Actually, I’m already seeing signs that it is ending in our area as I’ve recently been involved in a number of transactions that sold at over asking price because of multiple offers.

How do I know if buying is right for me?  Thirty-tree percent of Americans say they expect home prices to continue to rise in the next 12 months.  Seventy Three percent say now is a good time to buy.  Rental prices are projected to increase by 4.1 percent over the next year.

If you plan to stay in a home for 7 years, which is the average time that Americans traditionally live in a home before moving again, it is more affordable to buy than to rent.

Costs aside, the decision to rent or buy a home is very personal. There’s a strong emotional component: some people want the security of homeownership and others want the footloose freedom of renting. But the financial factors are also very personal because the decision to rent or buy depends on:

1. Can you qualify for a mortgage at the best rate available?
2. Which tax bracket are you in, and do you itemize your deductions?
3. How long will you stay in your home? 

Working with my clients, I take into account all their factors.  Some folks just want to rent because they’re not sure where they’ll settle in; some are concerned about the stability of home prices.  I completely understand that position – especially for folks who are moving here from other states.  But, often, most folks don’t even know if they can buy a home & are happily surprised to find out they can – and often for more than they imagine. 

So, clearly the first step is to make a decision – are you willing to go for it?  

Next week:  Step Two:  Preparing to Buy.  Can’t wait for next week?  Call me now – I’ll be happy to answer your questions and help you make the right decision!

"Step by step, the bird builds its nest" 

*Source:  JP Morgan

Be Savvy...Call the Smart Realtor

 Elizabeth Scott, Realtor®, Broker

e-PRO, Strategic Pricing Specialist
Fathom Realty NC, LLC
Phone: 919.306.9699
TheSmartRealtorNC@gmail.com
www.Elizabeth.FathomRaleigh.com
www.TrianglePropertyLines.blogspot.com
My LinkedIn Profile

FHA Changes - What You Need to Do

Think you qualify for an FHA loan?  You may have to think again!  Effective April 1, 2012, all potential borrowers with ongoing credit disputes totaling more than $1,000 will not be able to get a mortgage insured by the Federal Housing Administration (FHA) (excluding accounts from more than two years ago and those related to theft).  Prior to this date, there was no requirement that disputed credit accounts need to be resolved – that decision was left to the discretion of the underwriter.   

A quick primer on the FHA:  The program originated during the Great Depression in the 1930s, when the rates of foreclosures and defaults rose sharply.  The program was intended to provide lenders with sufficient insurance to cover default.  Some FHA programs were subsidized by the government, but the goal was to make it self-supporting, based on insurance premiums paid by borrowers. Over time, private mortgage insurance (PMI) companies came to be, and now FHA primarily serves people who may not be able to  afford a conventional down payment or otherwise do not qualify for PMI. 

An FHA insured loan is a mortgage loan that is backed by the Federal Housing Administration and is provided by an FHA-approved lender. FHA insured loans are helpful because they allow lower income Americans to borrow money for the purchase of a home that they might not otherwise be able to afford. To obtain mortgage insurance from the Federal Housing Administration, a mortgage insurance premium (MIP) equal to 1 percent of the loan amount at closing is required, and is normally financed by the lender and paid to FHA on the borrower's behalf. Depending on the loan-to-value ratio, there may be a monthly premium as well.

So, what does this change mean for today's homebuyer?  Well, if you’ve already gotten your FHA loan before Apri1 1, you’re OK.  If you’ve been approved for an FHA loan previously, but have not finalized it yet, this change will affect you.  The first thing you need to do immediately is check your credit & FICO scores.  There are a number of different agencies, online sites & ways to do this.  However, the easiest, cheapest, and most reliable way is to talk to a mortgage professional.  For example, your first reaction might be to run out and sign an agreement to pay off any outstanding debt, but that might not be the best action because the debt itself may still remain on your record (crazy, huh?)  I’ve been told that, just because a debt has been paid may not mean that it has been expunged from the record. 

You really need to know where you stand now and what action you must take to get to where you want to be.  I can recommend several great mortgage experts who have helped my clients.  They would be happy to meet with you – confidentially and at no cost.  They will have some action steps you can do to improve your situation, if needed.  You need to do this now because it may take several months.  You will be happy you did when you find that perfect home. 

Things are still changing and evolving -- more than ever you now need the help and advice of experts, so give me a call.  I'm your Real Estate Resource.

Here’s the link to the notice from the FHA:

http://portal.hud.gov/hudportal/documents/huddoc?id=12-03ml.pdf