Homebuyers To Pay More After April 1, 2013 For FHA Loans

As we approach the spring market in 2013 there is one change that is not getting enough attention. That is that FHA is increasing its mortgage premium on loans after April 1, 2013. In essence you will be paying more for the same house if you go under contract after April 1, 2013 than if you do before April 1st. According to a bulletin put out by the Housing and Urban Development Program it will increase by 0.10 basis points. So what do 0.10 basis points account for on a home loan? Well, for every $100,000 that you finance the yearly mortgage insurance premium you pay will increase by $100 a year. In essence your payment will increase by $8.33 a month. It may not seem like a lot but over the course of a loan it can add up pretty quick and affect the amount you can finance and borrow in the future as well. The other change that is going to have even a more dramatic impact on home buyers is the term of the mortgage insurance premium. Currently you paid the premium for at least five years or until you hit 78% loan to value ratio in your home. So you were paying this for five years if you had enough equity after that time to have it removed you could have it taken off and your monthly payment would decrease by that amount every month. Currently it is at 1.25 basis points and increasing to 1.35 basis points on April 1, 2013. That change I explained above. But the impact on your monthly payment is $112.50 a month. Under normal circumstances you made your payment on time every month you would on average be able to remove it around 10 years by just making the regular monthly payments. Now they will be paying for it for life of the loan. So you will be paying this premium for the life of the loan now in most cases. Their reasoning is that they are still liable for the loan even after it hits the 78% mark and this is a way for them to recoup some of their losses and reduce their risk while providing homebuyers with an affordable option to buy a home. Realtors and mortgage brokers have talked about now being the time to buy a home. If you are considering using FHA for your loan then you may want to seriously consider looking and getting under contract with a case number before the 3rd of June. Dave diCecco Realtor/Broker Coldwell Banker United Cell: 704-519-7895 ddicecco@cbunited.com www.davedicecco.com

Are You looking To Purchase A Home Or A Lifestyle?

Are you looking to purchase a home or a lifestyle? That was the question I posed to a buyer this morning on a fact finding conversation. Are buyers today looking to purchase a home or a lifestyle or a combination of both? It seems we are in a shift of a paradox from what the generation I was/am in grew up with and our parents grew up with. One in where the American dream was to own a home with a garage, white picket fence and have 2.3 children and live in suburban America and commute to work. Now people are different and the needs of people differ. What I might find absolutely appealing and must have in terms of a place might not appeal to you and vice versa. As a Realtor today it is more imperative to find out more about what people are looking for in a lifestyle living area than it is in a house. Everyone wants the three to four bedroom homes in a good school district and a safe neighborhood. And truth is told that covers most of the neighborhoods we all sell in. Besides the fact, the Fair Housing Act prohibits us from steering clients toward or away from neighborhoods. Some people I talk to are looking for bungalow type living or rural life in a city where things are close by. Others are looking for golf courses, water, or other outdoor activities within walking distance or the home to be located on a lake or a golf course. Then you have the ones looking for commute distance, newer homes versus older homes, neighborhoods versus subdivisions....The list goes on and on and on. So, today I tend to talk to clients about lifestyle and what they like to do and where they like to go. I have found it extremely helpful in directing clients towards neighborhoods or areas that best meet the lifestyle needs they want. I had one the other day that wanted to be near a park. We looked at this gorgeous home she absolutely adored. But she said there is no park. I said actually there is around the corner less than a quarter mile from here...We walked over to the park and she was sold on the home. Knowing what was important to her in terms of lifestyle helped me find homes close to amenities she wanted and found desirable in addition to the home features....Are you asking your clients or is your Realtor asking you about lifestyle when you search for a home? You might be surprised if you go back and think of why you ultimately bought the home you are in. I realized the lifestyle was the deciding factor on why I chose the house I am in now and have no regrets because of it. You may not realize it but it may be the deciding factor between you finding the right house and not finding the right house... Dave diCecco Realtor/Broker Coldwell Banker United Cell: 704-519-7895 ddicecco@cbunited.com www.davedicecco.com

What Is A Buyer In Multiple offer Situation To Do In Charlotte, NC.?

What are buyers that are experiencing multiple offer situations in the Charlotte, NC. market to do today? First thing is you should not panic. Yes, we are seeing a multitude of homes in the Charlotte market going into multiple offer situations and I expect that to increase as we go farther into the selling season this spring. Just because a house has multiple offers on it does not mean you have to over pay for the house. A lot of first time buyers I am working with I have to calm down. The emotions are running high; they are aware that this is the nicest house they have seen and is the one they want. They sit with me and we go over the comparable for the neighborhood and the shift in pricing and come up with what i and they agree to be a fair value on the house and make an offer based on that. I submit the offer to receive a response form the listing agent stating that the house is now under multiple offers and I need your highest and best offer by X date and time. Now the buyers are devastated.... What if we lose the house? How much do we bid to ensure we get the house? A lot of questions are going through our minds. This is all normal. But do not panic and over pay for a house. In my last three transactions representing the buyer two of them went to multiple offers and the third we bid on the day it hit the market. I lost one of the multiple offers and won the other. I negotiated a slightly better than market deal for the other house based on the quick response time. Since January I have received offers and closed or under contract on seven of my listings. On six of the seven I either received an initial offer at full price or went into multiple offer situations and the seller received full price for the house (and in one case over value). So yes the market is changing and I tell buyers all the time; you need to think about it before you put an offer in. however; now you cannot think for a few days. It has to be within 24 hours or you may lose that property to someone else who was faster and ready or panicked. Based on my experiences (which talking to other Realtors seems to be a common theme) homes are moving faster and for more money than they were in 2012. Some realtors are pricing their homes over market value because of that and when multiple offers come in they are getting the price because a buyer over paid for a house. No home is that perfect that it warrants over paying for the house. As I explain to buyers all the time. If this house is the right one we will win the bid on it. If not I will find you another one. It may not look that way now but trust me there is another house out there for you. So far, I have not let anyone down. It may take longer than someone wants but I always find them another house and they are thankful for it. So, even though the market is shifting and prices are going up....do not over pay for a house. Have your Realtor do a comparable market analysis and tell you what the value should be and adjust for the price inflation going on right now and stay true to your number....A home purchase are the largest single purchase a person will make in their lifetime. Make sure you are making the best one. Just because you do not win that house does not mean you will not find the right house at the right price Dave diCecco Realtor/Broker Coldwell Banker United www.davedicecco.com