Raleigh Real Estate blog

Understanding FHA adjustable rate mortgages

April 27th, 2011 • By: Jason • Buying a home, Tips

Interest rates on an ARM can change periodically. The initial interest rate of an ARM is usually lower than a fixed rate mortgage. An ARM may be a good option to consider if you plan to own your home for only a few years.

FHA loans require a minimum down payment and funds for closing may be a gift. In Raleigh, the loan limit for an FHA loan is $295,000 and there are no income restrictions (It doesn’t matter how much you make.)

An ARM has four components: (1) an index, (2) a margin, (3) an interest rate cap structure, and (4) an initial interest rate period. When the initial interest rate period has expired, the new interest rate is calculated by adding a margin to the index. Your lender will disclose the margin at time of loan application (margins may vary from lender to lender, so it’s is a good idea to shop around for a low margin). As the index figure moves up or down, your interest rate will be adjusted accordingly. Acceptable index options on FHA insured ARM loan transactions are 1) the Constant Maturity Treasury (CMT) index (weekly average yield of U.S. Treasury securities, adjusted to a constant maturity of one year); or 2) the 1-year London Interbank Offered Rate (LIBOR). Increases or decreases in the interest rate will be limited by the interest rate cap structure of your loan.

Click For more information on ARMs on the HUD website

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Community Development Loan Programs for Raleigh

April 20th, 2011 • By: Jason • Buying a home, Tips

If you want to buy a home in Raleigh but need help with a down payment or your closing costs, Raleigh has options to help with your mortgage.

If your income qualifies, you could be eligible for OWNER (Ownership Within Neighborhoods to Encourage Revitalization) Program for the city of Raleigh. Qualified home buyers may be eligible for up to $30,000 in the form of a low-interest loan to help you.

There is also a loan for rehabilitation of homes for lower income buyers as well.

There are programs for home buyers, home owners and for developers/ investors.

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Getting started with a Real Estate Buyer’s Agent

April 12th, 2011 • By: Jason • Buying a home, Tips

Ever call an agent about seeing a house? How was your experience? Before you start viewing home, meet with an agent and plan your move. Don’t hire an agent you don’t like and have issue with trusting.

A quality agent that know the area will plan your first house hunting trip carefully. Review your likes and dislikes and then set standards for what you expect in a home. Then ask your agent what’s available that meets your criteria. Sometimes it doesn’t exist and sometimes it does. After an hour or so you should have a defined list of home to view. If after 5 or 6 homes you are not hip to what you are seeing, consider a change in your criteria.

An average home buyer should see 6 to 12 homes before they are ready to purchase. If you are seeing 20+, then you might be heading in the wrong direction!

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The importance of home maintenance

April 7th, 2011 • By: Jason • Home Maintenance

Don’t take home maintenance for granted. If you don’t understand how something works, ask. If you are pretty handy but need help, get a home improvement manual (I have the Complete Do-It-Yourself Manual from Reader’s Digest that I love). A couple of on-line resources you might consider are YouTube and The Family Handyman.

Check out the guys from Mythbusters showing the importance of understanding the working parts of your water heater:

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Beazer gets into the rental business, should you?

April 5th, 2011 • By: Jason • Real Estate Investment

Beazer, a national home builder with a strong presence in the Triangle, is moving into the buy and rent business.

What does this mean?

Who knows the cost of building and selling a new home than a home builder? The lesson to take from this as a home buyer is that there’s more value to buying a new home than building a new home.

The Story

The company will purchase homes that were built after 2004 in certain markets, starting in Phoenix, where demand to rent recently built homes is strong.

The primary source of the homes will be foreclosures or short sales, so the company expects to buy the homes at a discount.

The company expects to have more than 100 homes in its pre-owned portfolio by the end of fiscal 2011.

Read UPDATE 2-Beazer gets into US used home rental business.

Are you investing in real estate?

This is an outstanding time to invest in real estate. Approximately 20% of the Raleigh real estate market is some sort of distressed sale putting a lot of downward pressure on pricing. If you have the money to invest, you can take advantage of these distressed prices. Fewer people are qualified to buy these days meaning there are more prospective tenants for you.

I am studying to get my CIAS designation so I can better teach you tactics and techniques to make real estate investing both profitable and manageable.

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