Should you refinance your home?

Below is an excerpt from a recent article focusing on refinancing options. In today's economy, it's important to be aware of your options. We are committed to doing everything we can to help you with questions regarding the real estate market.

"Refinancing into a long-term loan can extend the years in which you make payments and that can increase the amount you ultimately pay for the loan, even if the rate is lower. Even if you decide to refinance, you may not be sure of whether to go fixed or variable, long or short. Should you roll your other debts into your home mortgage?


Here's how to decide whether to refinance, and how to go about it to get the best possible loan for your situation:

• Use an online calculator. It will give you a good idea of how much you'll spend over the life of the loan, and whether the refi makes sense in a strictly dollars and cents way. Check out the calculators at bankrate.com and hsh.com.
• Get several quotes, and beware of extra costs and traps. The points you may be asked to pay to secure your loan are just one cost of a refinancing. You'll also be tapped for a home appraisal and miscellaneous other lender fees. Ask your lender for a good faith estimate of all closing costs. Avoid getting any loan that carries prepayment penalties: these are illegal in some, but not all states and situations. Compare web-based lenders and a local lender or two.Get recommendations from friends for mortgage professionals they have dealt with before.
• Skip the ARM. Rates now are within spitting distance of their historic lows, so why wouldn't you want to lock them in? Some lenders, such as Countrywide, aren't charging any less for adjustable rate loans than they are for fixed rate loans.
• Make your own interest rate prediction about floating rate debt. Home equity lines of credit (HELOC) currently are charging rates as low as 3.5 percent; they are cheaper than regular mortgages now. But that may not last. Borrowers will have to make their best guess in predicting whether they will be able to pay off their HELOCs before rates rise to mortgage-topping levels. If you're looking at a very large balance on a HELOC and are uncertain about when -- if ever -- you will be able to pay it off, consider rolling it into a new mortgage along with your existing loan.
• If you're worried about cash flow, go long. If you're having trouble making your mortgage payment, and are worried about your job and future earnings prospects, consider refinancing into a long-term 30-year fixed-rate loan. That can be a home-saver, as it may lower your monthly payments enough so that you can keep up with them.
  If your finances strengthen, you can make extra payments and burn the loan early.
• If you are nearing retirement, resist the urge to refinance, especially if you'll have to use tax-deferred money to make your monthly payments. For every IRA or 401(k) withdrawal you'll take to make a mortgage payment, you'll also have to withdraw enough extra to cover the income taxes on that withdrawal. That can make your mortgage even more expensive. Use a pre-retirement refinancing only if it will save you significantly in interest over the long term, or if selling your home is part of your retirement plan, and you simply need to lower your payments for a few years.
• Don't use your new mortgage to pay off credit card and car loans. That puts you in the position of paying for that meal or handbag for 30 years. And it puts your house on the line for debt that is now unsecured; or secured only by a car. That's too risky."

For the full article, click here.

Source: Reuters.com

First Snow of 2009!

Today, January 20th, 2009, we received our first snow fall in the Raleigh/Durham area with total accumulation ranging from 2"-7", depending on location.

These photos of Creekside Commons capture the beauty of the snow.

For more information on Creekside Commons, visit the community website:

http://www.creeksidecommonsonline.com/

Relocating in the near future?

For years we have been referring our clients to All American Relocation and have also used their services personally. If you, or someone you know, is looking for a relocation company to help with an upcoming move, be sure to call All American first.

All American is an award winning service provider of both domestic and international household and commercial relocation services. They specialize in providing residential moving services, employee relocations, industrial and office relocations, office furnishing and furniture installation, storage, warehousing, asset management and specialized transportation services. Their dedication to customer satisfaction and resources including the latest technology and tools is what sets them apart from competitors.


Be sure to check out their website:
http://www.aacorp-usa.com/

You're not alone: What to do if you're behind on your mortgage payments

The below is from an article posted on MarketWatch.com, a resourceful guide to what's happening in today's economy. With mortgage issues growing, this is encouraging.

Whether it's from a job loss, medical emergency, mortgage-payment hike or simply personal-finance mismanagement, a small but growing number of homeowners is falling into foreclosure every year. For most people who fall behind on their mortgage, their first instinct is to avoid all contact with the lender. But that's a mistake, consumer counselors and others say, because it's likely those financial problems will only get worse, making it harder to work out the best repayment terms.

Many borrowers don't realize that lenders are as eager as homeowners to avoid foreclosures, which cost lenders $40,000 to $60,000 per house, according to industry estimates. Most lenders offer "workout" programs where they work with the borrower on repayment plans that meet the borrower's financial circumstances. "Going to the lender is ideal. The sooner, the better," said Erica Sandberg, a spokeswoman with the Consumer Credit Counseling Service of San Francisco, certified by the U.S. Housing and Urban Development Department to provide housing counseling. Lenders agree. "It's never too early and never too late to call your lender," said Loretta Abrams, vice president of consumer affairs for HSBC North America. And, "any of our borrowers can approach our workout staff," said Tim McGarry, spokesman at Washington Mutual. "It's always our goal to keep people in homes. Foreclosure is a bad outcome for us as a lender."

But plenty of borrowers -- about half, according to some focus-group research -- are afraid that divulging their money woes to their lender will prompt the lender to accelerate the foreclosure process. That fear is not surprising: Often, when borrowers fall into financial difficulty, their first contact with the lender may encourage them to run in the other direction the next time the phone rings. That's because many lenders, if a borrower is 30 to 60 days' late, initially have the collections department call.

"A collection agent's job is really to get you to pay. They want to know when you're going to pay, how much you're going to pay, how you're going to pay," said J. Michael Collins, a principal at PolicyLab Consulting Group, LLC, a market-research firm focusing on consumers' financial decisions, in Ithaca, N.Y. "It's a very ... aggressive approach." It's not until the borrower is close to defaulting on the loan that lenders move the account to the "loss mitigation" department, staffed not by collection agents but by people trained to work with the borrower to prevent foreclosure, Collins said.

Some lenders already understand this issue. "Lenders who are working with borrowers who have a history of credit problems, they understand that the first time you make contact with that borrower when they're in trouble, you've got to facilitate a cooperative relationship," Collins said. "But what a lot of lenders are used to is more of a market where people have more income. There's no real good reason for somebody not to pay" is the standard thinking. Still, Collins says he sees a shift happening, with more prime-market lenders realizing the importance of making that initial contact with the borrower a cooperative one. Maybe that's because some see delinquency and foreclosure rates getting worse before they get better, thanks to more people holding loans with adjustable rates set to move higher. In some cases those adjustments will push up monthly mortgage bill 30% or more. More foreclosures coming?

Adjustable-rate mortgages are a growing portion of the mortgage-loan market, accounting for about one-fourth of all home loans nationwide, and three-fourths of subprime home loans in 2005, according to a recent report by ACORN, an advocate for low- and moderate-income families. See related story. "While foreclosure activity continues to remain slightly below historical averages, the number of properties in some stage of foreclosure from January to July has increased by 39% compared to the same period of 2005," said James Saccacio, chief executive officer of RealtyTrac, a foreclosure-tracking company, in a recent press release.

First-quarter data from the Mortgage Bankers Association shows delinquency and foreclosure rates essentially flat, and still a small portion of the overall loan market. But there's been an up-tick in late payments among borrowers with subprime credit. About 4.41% of all loans were late 30 days or more in the first quarter compared with 4.31% for the first quarter in 2005, according to MBA. That delinquency rate includes homes in the foreclosure process.

For loans held by borrowers with subprime credit, 12.02% of adjustable-rate loans were delinquent, up from 10.25% a year earlier, according to the MBA, which says its survey covers about 80% of residential mortgage loans in the U.S.

"When these people get faced with their first increased payment and their payment goes from $600 to $1,200, that's very difficult for folks to deal with," Collins said. Some borrowers "had no idea their payment was going to go up this much," he said, citing his research with focus groups of borrowers in default on their adjustable-rate mortgages.

Source: MarketWatch.com


www.ChuckandCindy.com

The Top 5 Housing Market Hopes for 2009!

With 2008 behind us, it is time to turn our direction to the year ahead. 2008 was undoubtedly a tough year for most in the real estate market, but 2009 is a new year!

The 5 Most Promising Reasons For a Prosperous 2009!

1. Cheap mortgage rates: With inflationary pressures easing and economic concerns mounting, shell-shocked investors are seeking the protection of government securities, such as 10-year treasury notes, driving down yields. The lower yields, coupled with the Fed's recently announced plans to buy up debt and mortgage-backed securities from Fannie Mae and Freddie Mac have brought mortgage rates to multi-year lows. Thirty-year, fixed mortgage rates hit an average of 5.47 percent last week, the lowest they've been since 2004, according to Freddie Mac. Tougher lending standards will assist in ensuring the capable people get loans.

The rates present a welcome incentive for qualified borrowers to step up to the plate. "Lower mortgage rates mean more people with those credentials will be able to qualify," says Patrick Newport, a U.S. economist at IHS Global Insight. While that might not make a dramatic impact on the market, it could be enough to keep home sales from declining as much as they otherwise would, Newport says.


2. Lower prices: Home prices at the national level have already fallen 21 percent from their 2006 peaks. While home prices are expected to drop further in 2009, values in certain markets are already at levels low enough to tempt bargain hunters. "Falling home prices aren't part of the problem, they are part of the solution," says Mike Larson, a real estate analyst at Weiss Research.


3. Fewer housing starts: In the face of dwindling demand, home builders have been forced to sharply pull back on new construction. The government reported Tuesday that November housing starts dropped to their lowest level since 1959, when officials started keeping the statistics. While that's bad news for the economy-because it means fewer jobs for builders and others-it's an important step in bringing housing supply back in line with demand. The cutback will limit the supply of new homes coming into the market, which helps to reduce the surplus of unsold homes that is putting such downward pressure on housing prices.


4. Obama stimulus: In an attempt to hoist the economy out of its rut, President-elect Barack Obama has announced plans for a massive federal spending program. The initiative is expected to put between $500 billion and $1 trillion into infrastructure repair and other projects in an effort to keep Americans working. Should this program succeed in preventing unemployment from climbing and keeping the economic contraction from strengthening, certain housing markets may firm up quicker than expected, says Susan Wachter, a professor of real estate at the University of Pennsylvania's Wharton School of Business.


5. Credit programs: It will be tough for the housing market to come back to life until the credit markets-which have been log-jammed by fear for more than a year-begin to unlock. Like the fight to limit unemployment, reviving the credit markets is a daunting challenge. But remember, the federal government has already taken a number of steps designed to do just that. The Federal Reserve has slashed its benchmark interest rate to between 0 and 0.25 percent and committed nearly $2 trillion to new lending programs, bailouts, and additional measures designed to bolster the financial markets. Meanwhile, Congress passed a $700 billion bailout and the Treasury has already injected a chunk of that money into banks of all sorts. While these efforts haven't been enough to restore the credit markets to health, they have produced results. Interbank lending, for example, has eased. And should this modest victory lead to a broader recovery in the credit markets, the economy-and the housing demand that comes with growth-could turn around quicker than expected. "Right now, panic is driving the credit markets," says Moody of Mission Residential. "If, for whatever reason, confidence were to resume and people's appetite for risk was starting to increase, then you could start all of a sudden seeing credit flowing much more freely, which obviously supports spending in both business and households."

Source: Yahoo! Real Estate, USNews.com

For all of your real estate needs, put your trust in our experience.
www.ChuckandCindy.com

Happy New Year from Chuck & Cindy!

As 2008 comes to a close and a new year begins, we would like to wish you all the best in 2009!

"Here's to the bright New Year, and a fond farewell to the old; here's to the things that are yet to come, and to the memories that we hold."-- Anonymous

RE/MAX Ranks #1 Amongst Competitors!

We recently came across an article focusing on ranking business franchises. This annual study ranks RE/MAX as the No. 1 Real Estate Franchise.

"RE/MAX is the United State's No. 1 real estate franchise - and the nation's No. 44 franchise overall - according to Entrepreneur magazine's 30th Annual Franchise 500 survey.
The survey appears on the magazine's Web site and in its January 2009 issue. Subway bested McDonald's to capture the top position overall. Behind No. 2 McDonald's came Liberty Tax Service at No. 3.

Among real estate franchises, RE/MAX ranks No. 1 for the ninth time in the past nine years. The closest competitor - Keller Williams - came in at a distant No. 71. RE/MAX ranks No. 10 overall in the Low-Cost Franchises category. It finished No. 1 last year. Additionally, RE/MAX tops all real estate competitors at No. 38 on the Global Franchises list. RE/MAX has a long, successful history in the survey. It ranked No. 10 overall a year ago, No. 11 in 2007, No. 8 in 2006, and No. 10 in 2005.

All companies in the rankings are judged by the same criteria, the most important being financial strength and stability, size and growth rate. Also considered: number of years in business, length of time franchising, start-up costs, litigation, percentage of terminations and financing options.
The factors are plugged into a Franchise 500 formula, with each eligible company receiving a cumulative score."

For all of your real estate needs, feel free to contact us.
REAL people. REAL experience. REAL difference.

Chuck Hinton (919)469-6504 -o (919)422-4841 -m
Cindy Leonard (919)469-6505 -o (919)868-4661 -m

www.ChuckandCindy.com

Source: RE/MAX Times Online