People looking to extract equity from their homes have increasingly been turning to cash-out refinancing, industry observers say. A big reason that people are tapping their equity through refinancing comes down to dollars and cents, according to Amy Crews Cutts, deputy chief economist with Freddie Mac. Because home-equity loans and lines of credit are most often tied to the prime rate, now at 8.25 percent, those options have gotten more expensive even as long-term mortgage rates have remained relatively low, with the 30-year loan averaging about 6.25 percent.

“It’s all about the prime rate,” said Michael Kodsi, chief executive of Choice Mortgage Bank in Boca Raton, Fla. A good number of his clients would rather take cash out through refinancing — whereby their mortgage rate will be fixed — than take out a loan tied to the prime rate, which has the potential to fluctuate and “could go higher down the road,” he said. Freddie Mac said 89 percent of the loans it owns that were refinanced in the third quarter of 2006 had loan amounts at least 5 percent higher than the original mortgage balances, the threshold for considering a loan to be a cash-out refinancing. It’s the highest share of cash-out refinance loans reported since 1990. (more…)

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We North Carolinians find ourselves in 2007 standing on the brink of a deep but narrow canyon. Across it lies a greener and happier future, secured by substantial new investments in land and water conservation. We’re tempted to borrow the money we need and leap across the gap — but looking over the edge we see far below the dangerous rocks of a bond rating decline. To the left of us there’s the sturdy bridge of dedicated conservation funding, spanning the canyon. But the bridge is guarded by twin giants Realtus and Developus. Behind us we hear the din of the steadily advancing armies of Overdevelopment, so we know there is no time to lose.

Last year the Governor’s Office opposed putting a conservation bond referendum on the ballot, citing fears of a costly decline in the state’s excellent bond rating. The obvious work-around is a dedicated funding source that could guarantee repayment of the bonds over time, but development interests have often managed to block the most reasonable funding mechanisms for conservation. For example, conservationists would love to simply raise the real estate transfer tax, currently set at a modest $1 for every $500 in property value. Real estate agents, however, oppose raising the transfer tax, which they argue is discriminatory in its focus on just one industry, given the fact that land conservation benefits us all. (more…)

search for : North Carolinian, conservation funding, conservation bond referendum

What key characteristics of a home’s location — not the features inside — push sales values up or down most dramatically? Just about anybody who’s bought real estate or is in the business knows the mantra “location, location, location,” and has opinions on what matters most. But new research by the National Association of Home Builders uses sophisticated statistical analysis techniques on a massive housing database to come up with a definitive list of the top locational characteristics that raise and depress property values the most.

The “standard” home for the purposes of the analysis is defined as being constructed after 2003, with 1,850 square feet of living space, two full baths, three bedrooms, dining room, kitchen and a “miscellaneous” room, a basement, garage, fireplace, and “no special (locational) amenity or disamenity.” The starting valuation of the “standard” or baseline new house ranged from $163,540 in a non-metropolitan area in the Midwest to $589,551 in a large southern California metro area. The study then examines what happens to that valuation when positive and negative locational characteristics are introduced into the equation. For example, in a Midwest suburb the baseline house with no special locational amenity would be valued for sale at $212,137. Put that same house in a location that has parkland or open spaces nearby and the value rises to $215,510. Put the house in a gated community and the value rises to $225,772. Put it in an area that is convenient to public transportation and the value jumps to $238,340. And locate it on waterfront and you get the biggest positive impact of all — its soars in value to $303,760. (more…)

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Most people think of a mortgage as a means to an end. After all, you buy a house, not a home loan. But a mortgage is much more than the path to home ownership. It is a financial implement that must be managed, just like any other financial investment. “Think of it as part of your financial tool kit,” suggests Susan Martin, a vice president and spokesperson for Countrywide Home Loans, one of the country’s largest lenders. “And it’s a dynamic financial tool, not a static one.” Years ago, people took out 30-year loans, threw their mortgage papers in the drawer and didn’t take them out again until 360 payments later. Then they held mortgage-burning parties.

If rates have risen, and it looks as if yours is going to reset higher, it also might be time to refinance into a loan that’s more stable, or maybe another ARM with a lower start rate. Another advantage of today’s multiple-choice mortgage market is that you can match your loan to significant life events, not just changes in interest rates. If your spouse decides to give up his or her job to stay home with the baby, maybe you can trade in your current mortgage for one with payments that more closely match your reduced income. If you just took a new job that pays significantly more, perhaps a new, shorter-term loan with larger payments is now in order. Maybe a loved one has had a major illness; it’s time for Junior to go to college; or an investment opportunity presents itself. All of these are personal events that have a significant effect on your bottom line, and a new mortgage might be something to consider. (more…)

search for : mortgage, home ownership, 30-year loan

Do you have any ideas on how to clean my Cadet baseboard heaters? When I first turn them on for the winter, I get a black film on the wall above the heater. What should I do?

What’s probably happening is that during the time the heater is off, dust or other material is accumulating inside the unit. When the heater is turned on in winter, this material burns off and streaks the wall.

First of all, try to minimize the dust buildup. This might be done by rearranging furniture, increasing fresh air in the room, or increasing air flow in front of the heaters. Then, prior to starting the heater in the winter, make sure it’s clean. For their baseboard heaters, Cadet recommends that you remove the front cover, and use a vacuum to clean out the inside of the heater before starting it for the season. Be sure the power is off before removing the front cover, and be careful not to damage the aluminum fins inside the heater. (more…)

It looks like 2007 is going to be a very hot year for foreclosure sales, according to RealtyTrac.com, creator of the largest U.S.-based foreclosure database. The latest numbers released this week show that while foreclosures filed in December 2006 were 9 percent less than November, it was still up 35 percent December year over year. “New foreclosure filings surpassed the 100,000 level for the fifth straight month, something we’ve not seen since we began issuing our foreclosure market report in January 2005,” said James J. Saccacio, chief executive officer of RealtyTrac, in an online press release.

For many an investor-wannabe, I can hear the sound of chops being licked in the background. The real estate business has been a great creator of wealth for many every-day people, but it’s also created the demise of many a millionaire. If you’re looking to move toward investing in the foreclosure world, it goes without saying that you have some homework in front of you before collecting your rental checks or flipping the property. When an investor is buying what I would call a retail investment property, the property is usually in good condition, the seller actually wants to sell the house and all parties will probably use traditional contracts from established sources, such as the local Realtor association. Such a situation creates a stable environment in which to buy a house that is going to continue increasing in value and where you may already have a tenant in the house. (more…)

search for : foreclosure sales, foreclosure filings, flipping the property

A second report, in as many days, about apartment market jitters says too many unsold condos could gum up the works my mid-year in what was considered a hot rental market. On January 18, RealFacts said the apartment market had been going great guns until landlords shot themselves in the foot by raising rents too quickly. RealFacts.com said renters’ backlash, rather than seasonal factors, in the last quarter of 2006 produced unexpectedly high occupancy rate dips in every one of the nearly three dozen metros it tracks in 15 states. The next day a National Association of Homebuilders Washington Hotline newsletter carried the headline “New Multifamily Data Forecasts A Bumpier 2007.”

The apartment market got a boost last year from the high-priced housing market which forced shelter seekers into more affordable apartments and rental rates took off with the demand. In NAHB’s preliminary forecast, due in full at the Multifamily Economic Forecast & State of the Industry session during the International Builders Show on Feb. 8, recounts how demand for rental apartments slowed even before RealFacts’ fourth quarter report. Ron Witten, industry analyst, who briefed NAHB s Multifamily Leadership Board, said demand for rental apartments slowed substantially in the third quarter of 2006, “in part, because a slowdown in job growth slowed the formation of new households.” Witten blamed sluggish job growth, accompanied by falling mortgage rates, for contributing to the lower demand for rentals. (more…)

search for : apartment market jitters, unsold condos, apartment market, high-priced housing market