Greensboro NC Real Estate

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What Can a 15 Year Fixed Mortgage Rate Do For You?

By Chris Cope
July
15
2010

Recently rates reached record lows that have not been seen since the 1950’s.  Many people may think that they either have taken advantage of refinancing or that it may not make sense for them at this time.  If you belong to the latter half of this group, consider this: if you have a 30 year fixed rate in the high 6 percent range now is a great time to refinance into a 15 year fixed.   Depending on your equity in the property and your credit score, you may find that you can refinance into a 15 year fixed with a payment that is not much more than what you are paying now.

The advantages to this are simple, paying a 15 year fixed rate mortgage builds your equity much more quickly and allows you to pay off your home much sooner…

For example, if you have a $200,000 mortgage at 6.75% your principal and interest (P & I) payment is $1,297.  A 15 year fixed rate at 3.875% would give you a P & I payment of $1466, a difference of only $169 a month.   What is important for homeowners to take note of is the difference in the paying down of the principal balance.

  • After the first year, the 30 year fixed rate has paid down its balance by $2,316, while the 15 year fixed rate has paid it down by $7,486.

Thos are powerful numbers, but what is even more compelling is what happens after 5 years:

  • After 5 years the 30 year fixed rate has paid down its balance by $15,491, while the 15 year fixed rate has paid down by $67,458.

Let that sink in for a moment.

Today, rates are at an all time low but that does not mean they will stay this low forever. Review your current mortgage rate and, if it makes sense to refinance into a 15 year fixed rate, consider talking to your Mortgage consultant about what options are available to you.

Summer Is Here – What’s Next For Residential Housing?

By Pat Riley
June
25
2010

As the historic residential “spring market” comes to a close and we enter the transition period following the expiration of the tax credits, I am often asked questions such as, “where does the real estate market stand?” and “what is next in the recovery plan?”

Let’s look at the first half of 2010 to understand what we can expect moving forward. 

Overall, the trends have been very favorable in 2010.  I can best illustrate what is happening by examining one of our regions. In May, 2,537 homes were sold and the average closing price was $212,454.  This was the largest number of closings and the second highest average sales price in the past 12 months.  This is indeed good news and is reflective of most of the Carolinas. 

In that same region however, 259 homes were placed under contract in May. This is 31 percent below April and 12 percent below May 2009.  It is very apparent that we saw many sales that would have occurred in May shift into April so that buyers could take advantage of the tax credits, which expired April 30.  This drop in sales reflects what has taken place in markets across the country.

So what else happened in May?  The stock market rocked, the overseas markets fell and the oil spill captured the news. These are all reasons to cause a decrease in confidence, especially on large consumer purchases.

The question everyone is asking now is, where is the market going from here?  June is already much stronger than May, and July and August will be a great indicator for the balance of 2010.  (If we can survive this heat!)

If the market is to sustain itself without the support of taxpayer money, we will see those results within the next 90 days.  I remain optimistic for continual improvement.

Right now, buyers have a great advantage with interest rates falling below five percent and inventory remaining strong. For the sellers out there, understanding the “new norm” when it comes to pricing will be one of the keys to success.  The market will continue its steady improvement the next few years and be less volatile. 

Real estate is indeed returning to that steady long-term investment it has been since 1950.

How Much Insurance Does Your Home Need?

By Robin Price
June
17
2010

 

 

If you’ve watched or read the news within the past year, you are aware that the home sales market has made headlines on numerous occasions. More often than not, these headlines are often accompanied by stories relating to the worst economic situation this country has seen in years.

Mixed in with these stories, we are also informed about tragic accounts of apartment buildings going up in flames or homes flooded with water – people’s lives forever altered in a matter of minutes.

What is the common link between all of these stories?

To someone who has not lost their home due to a natural disaster or owned a home before, the amount of insurance needed to protect their biggest asset may not be a primary concern.  But after 25 years in the insurance industry, the debate over the market value of a home versus replacement cost value of a home is one that I, as an insurance advisor, continue to face every single day.

In a down-turning home sales market, the buyer has the advantage.  More homes are available to someone who wants to buy at astronomically low prices.  But does that really change how much it would cost to rebuild that house if it suffered major damage?

As professional insurance agents, it’s our responsibility to identify and recommend how much insurance our clients should purchase to properly protect their assets.  And let me tell you—right now, in this economy, the market value of a home does NOT equal the replacement cost.

Here’s an example:

Let’s say there is a home for sale and based on the location and size, its replacement value is $200,000.  The list price, however, is $150,000.  The realtor negotiates a great deal and the final sales price ends up being $125,000.

Should the owner insure the home for $125,000 because that’s what he or she paid for it?  NO!  The home should be insured for what it would cost to rebuild that home if it suffered a total loss, i.e. the replacement value.

If the home was insured at $125,000 but it cost $200,000 to rebuild, that owner would owe $75,000 or more in the event of a total loss on his or her home.

These are the kinds of misunderstandings that insurance agents face almost everyday. The misconception is that most agents are trying to “over insure” their clients when, in essence, they simply want to protect them accurately. 

Remember, the best agents are the ones who will take the time to educate their customers!

 

Competitive vs. Compelling Pricing

Make sure your home is the “shiniest apple”

 

You’ve taken my advice about what to do when trying to sell your home: spruce up the landscaping, repaint the bathroom, remove extra furniture and make it available for showings.  And you’ve agreed to price it competitively with others in the area.

 

That may not be quite enough.

 

In today’s real estate market, competitive pricing is the expectation. Compelling pricing is the exception.

 

A competitive price is reasonable, viable and good. But it’s also in line with the price of many other properties with similar features, which makes it part of that sea of sameness. A compelling price has a powerful and irresistible effect; it commands attention, admiration and respect. Compelling is convincing; it grips you and doesn’t let go. It’s persuasive and undeniable. It’s the shiniest apple in the bowl, just begging for someone to grab it.

 

Is your listing price compelling or merely competitive? Are buyers grabbing your apple?

 

Find out what your home is worth!

 

How Mortgage Interest Rates Affect Your Payment

One positive outcome of a slow economy has been historically low interest rates. But as the economy begins to improve, industry experts predict that interest rates will creep up, perhaps even reaching 6 percent by the end of 2010.

While prices are likely to remain low, consider what even a small increase in interest rate can do to your monthly payment. On a $200,000 loan, an increase from 5 percent to 6 percent would result in $125 more per month, or $1,500 annually. He (or she) who hesitates pays more!

 

Think Outside for Spring 

 

Whether to refresh your home for spring or to get it ready to put on the market, there’s no better way to make eye-catching changes than sprucing up the exterior.

  • Thinking about replacing that exterior door or siding, or adding a deck? On a national level, these projects recouped more than 80 percent of costs at resale, according to the 2009 Remodeling Cost vs. Value Report published by Hanley Wood.
  • Paint, always an inexpensive pick-me-up, could be the answer for a tired home exterior. Pick a fairly neutral pale yellow, sage green or light taupe for a warm and friendly welcome.
  • Pressure-wash siding, exterior walkways, driveway and fences to knock off mold and mildew for a quick improvement and instant perk-up.
  • Consider landscape projects to boost curb appeal and lift your spirits. Add mulch for a finished, professional look.
  • Replace those old, drafty windows, for a 76 percent return of cost at resale and current rebates and tax incentives for certain types of energy-efficient windows.

Call us today for more home improvement ideas. We'd be happy to connect you with Allen Tate Home Services to get your projects started – and get your home ready for spring!