Renting Versus Buying in Jacksonville, North Carolina

Many renters are under the assumption that they are saving money by renting. You pay a flat fee every month, you don't have to worry about maintenance or taxes, and it doesn't matter anyway, because you're only going to be here for a couple years anyway.
In some cases that may be true. However, why not look at the big picture before your pay your landlord any more of your hard earned money.

The day you sign your lease (based on rent of $700 per month), typically you pay for a credit check ($30), the security deposit ($700), first month's rent ($700), and if you have a pet, the pet fee can be $100-$150 per pet. You've spent $1500 in the first month for a place that you don't own and you will never get that money back (except for the security deposit, if you play your cards right).


Whereas, if you were buying, most of your closing costs would be paid by the seller, which means that if you are using a VA loan, you will pay nothing down. Your first mortgage payment is usually not be due until two months after you close. (I.e. if you close on November 15, your first mortgage isn't due until January 1.) Your home will appreciate in value, slowly, but it will appreciate. Many homeowners can write off their mortgage interest on their taxes.  A person paying anywhere from $700-$900 a month in rent can afford a home with a price of $140,000-$160,000 depending on taxes, insurance, and mortgage interest rates.


There are a lot of factors to weigh when deciding whether to buy or rent. Jacksonville North Carolina is one of the few cities in the country where buying, even if you live in your home for under 5 years, can be cheaper and better for your financial future than renting. Ginnie Mae, which is a federal financial organization has put together resources for those considering to buy instead of rent. Check it out and use the comparison calculator to really weigh your options. The numbers don't lie.

Ginnie Mae: Your Path to Homeownership

If you have any questions, I would love to sit down and talk with you! I'm never too busy for your referrals!!

To Refinance or To Not Refinance. That is the Question!

Whenever the Fed cuts interest rates, you probably wonder whether it's time to swap your old mortgage and refinance. Generally, refinancing does save money. But don't rush into it - you need to make a few calculations first.
It's hard to come up with a calculation that fits everyone. Your savings depend on many factors, including your new interest rate, the length of the new loan, how much you've already paid down your current mortgage, your tax bracket, and a myriad of up-front charges.
Don't be fooled by claims of no-cost loans. There are always up-front costs, although they may be rolled into your mortgage payment.
So, talk to your financial adviser and make some calculations based on this list of fees that you can expect to pay if you refinance.

 Origination Fee. This is the service fee, usually expressed as a percentage of the total mortgage. It can run as high as 2.5 percent, although 1 percent is closer to the norm.
 Discount Points. You pay these for getting the loan. One point equals 1 percent of the total loan, so three points on a $100,000 mortgage loan adds $3,000 to your refinancing charges. Generally, the lower the rate, the higher the points. Some lenders finance the points or offer zero points, but both maneuvers boost your monthly payments.
 Prepaid Interest. You're likely to have interest from the date you settle. If you settle on November 10 and your first new monthly payment is January 1, you'll have to prepay interest from November 10 through the end of January. 
 Escrow Accounts. These are required if your lender pays your homeowners' insurance and property taxes. The lender sets up the account by adding the expenses to your monthly payments. They are kept in reserve until the bills are due.
 Miscellaneous. According to your situation, add in appraisal fees, credit report fees (the lender wants to be sure you're still a decent credit risk), attorneys' fees, application fees (which may not be refundable if you don't go ahead with the refinancing), title search fees, title insurance, survey costs, hazard insurance, termite inspection fees, mortgage insurance, fees for a VA loan guarantee, FHA mortgage insurance, or private mortgage insurance.

Now you're ready to consider the interest rate and tax implications - the final steps to determine if you're going to be saving any money.
 Recovery time. Estimate how long it will take to recover refinancing costs by dividing your closing costs by the difference between the new and old payments (your monthly savings).
 Dollar valuation. You want to take into account the future value of the dollar. (You'll be paying up-front costs in current dollars but taking your savings in the future when the dollar may be worth less.) Savings will also be affected by the time you plan to stay in the home.
 Income taxes. Lower interest payments mean lower deductions. So you may wind up paying more taxes that gnaw away at any total savings. IRS rules generally force you to deduct points over the life of the loan, not in the year you refinance, unless they were paid in connection with the improvement of your home.

There you have it. One last warning: Check your current mortgage to see if you'll be charged a prepayment penalty. That can dramatically affect your savings.
Even if you decide refinancing isn't worth it, you can ask your lender to alter some of the terms of your current loan. Again, you may want to talk to your financial adviser for suggestions on what might better serve your needs.

Call me for all of your real estate needs!  If you have a friend or family member that is thinking about buying or selling a home, I would love to talk with them!!

10 Tips for Budget-Friendly Entertaining this Holiday Season

Entertaining during the holidays is as much part of our culture as hanging stockings by the fireplace.  Just because times are tough and entertaining can be costly and a headache, doesn't mean we shouldn't take on the challenge of planning a gathering that fits comfortably into the budget.

1.  Create a budget before writing a list of who will be invited.  Once a budget is established, you can then see how many people can comfortably be invited.

2.  Share the duties of hosting with someone else.  Combine two events into one cuts costs as well as preparation time.  Perhaps everyone could bring a dish, for example.

3.  Opt for casual rather than formal entertaining.

4.  Scan the ads of local stores to find the best deals.  Buying sale items or bulk quantities (such as wine by the case) can help save a lot of money, provided the store is not too far away.

5.  Open the cupboard to see whay you already have on hand.  Maybe there's something there you can use and won't need to make so many additional purchases.

6.  Think seasonal when deciding what to include on the menu.  Items that are in season (e.g. apples and grapes during the fall) tend to be more cost efficient.

7.  Skip the meat and opt for entertainging vegetarian-style.  Vegetarian meals are usually cheaper and, as a bonus, generally healthier, too.

8.  Borrow supplies from family and friends.  This beats renting tables, linens and serving implements.

9.  Integrate food items and natural materials from the garden into centerpieces and decorations.  And if you have young ones around, think about decorating with children's artwork as part of the total design so they are involved in the project.

10.  If a plated meal is not possible, serve the buffet yourself (as opposed to a self-serve format).  This provides you with more control over portions.

Holiday entertaining doesn't need to break the budget in order to be fun and memorable.  Times like these just require one to be creative and motivated.  When your company arrives, everything will fall into place and you'll be able to enjoy your friends and family together.

Oh, by the way, if you have a friend or family member that is looking to buy or sell a home, I would be happy to talk with them!!  I'm never too busy for your referrals!!

The 10 most Valuable Home Improvements

Maybe you've been feeling the need for more space, less space or just different space.  You've been wondering- which solution will give me what I want with the least financial hit?  You need to plan with an eye on the potential resale value.  Ideally in resale you'll be able to regain the money you put into a remodel.  Some projects, moreso than others.

A survey by Remodeling Magazine and National Association of Realtors pulled data together from 60 cities to complete an annual cost-versus-value home improvement survey.  This list comes from that information and is based strictly on the percentage of the cost recouped at resale.  A minor facelift would include things such as replacing faucets, adding new flooring, new wallpaper or tile, new towel bar and toilet paper holder, maybe new doors for the shower.  Midrange remodeling adds new vanities and countertops, mirrors, medicine chest and maybe pulling the toilet and doing a new tub surround.  A midrange addition involves building a new bathroom with moderately priced fixtures, such as solid-surface countertop with built-in sink as opposed to a custom ordered sink.

Improvement #1:  Upscale Siding Replacement.  cost- $13,1777  adds $11,424 to your home's value, or 86.7% of the cost
Improvement #2:  Adding a Wooden Deck.  cost- $10,601  adds $8,676 to your home's value, or 81.8% of the cost
Improvement #3:  Minor Kitchen Remodeling.  cost- $21,246  adds $16,881 to your home's value, or 79.5% of the cost.
Improvement #4:  Replacing Windows.  cost- $11,512 and adds $8,946 in value, 77.7% of the cost.
Improvement #5:  Midrange Bathroom Remodeling.   cost- $15,899 and adds $11,857 in value, 74.6% of the cost. 
Improvement #6:  Renovating an Attic into a Bedroom.  cost- $48,398 and adds $35,694 in value, 73.8% of the cost.
Improvement #7:  Finishing a Basement.  cost- $61,011 and adds $44,467 in value, 72.9% of the cost.
Improvement #8:  Adding a Second Story.  cost- $146,538 and adds $103,553 in value, 70.7% of the cost.
Improvement #9:  Adding a Garage.  cost- $57,272 and adds $38,161 in value, 66.6% of the cost.
Improvement #10:  Adding an Upscale Bathroom.  cost- $74,345 and adds $49,100 in value, 66.1% of the cost.

If the prices seem a little more than you expected, there are several reasons:
Averaging can skew costs higher than taking the mean of all costs.  These prices include professional labor (which is usually about 30% of the cost), and there are significant regional variations in home values, materials and labor costs.  The best thing to do is to create a budget, compare prices, get estimates and do your homework well in advance of starting the project!

The average return on home improvements slumped to 67.3% last year.  That means every dollar spent improving a home boosted its value by 67.3 cents.  That's down from 76.1% in 2006 and 70% in 2007.  So if the goal of your project is to increase the value of your home for resale, your project needs to reflect the neighborhood.  It's completely within the realm of possibility to spend six figures on a kitchen renovation, but unless you live in a neighborhood of million-dollar houses, you'll want to scale things down.  The same goes with bedroom and bathroom counts.  If your neighborhood is mostly three-bedroom, two-bath houses and your house has only one bathroom, you're at a serious disadvantage on the resale market.  Adding a bathroom would make a big difference. 
However, if you have every intention of living in this home for the rest of your life, then put in the theatre room and the multi level deck with hot tub and pool.  Some decisions are made with the heart as much as the head.  It's your home, your money and your life.  So enjoy it!

If you have a friend or family member that is interested in buying or selling a home, I would love to speak with them!  I'm never too busy for your referrals!!

A thought on buying new construction versus existing homes

Many first-time home buyers buy townhouses with the intention of moving up to single-family homes later. Given the choice of buying a newly built townhouse vs. a resale, many prefer to buy new — where they get to choose floor plans, options, and even colors for carpeting, paint, and bathroom tile. But make sure you fully understand the economic implications of buying a new home vs. a resale.


First, the future value of your house will be determined by your builder. If you buy a brand-new townhouse in a new development, the builder likely will continue to build homes in your neighborhood for several years. That means your future selling price will be based on whatever he is then selling his homes for — and in fact, yours probably would sell for less than his. After all, why should prospective buyers choose your “old” townhouse when they can get a new one — giving themselves the same opportunity to buy state-of-the-art construction and appliances along with the same choice of designs and colors as you enjoyed?

Of course, if the builder raises his prices, your home’s value will rise, too. But either way, you will compete against the builder for as long as he’s building in your neighborhood.

Another concern is that since the homes are all being completed in roughly the same period of time, most buyers move in during the same period and many move out at the same time, too. The result is often a saturated market which keeps resale prices down.

Remember: When buying your home, think like a seller, for you will be one someday. To that end, don’t wallpaper a newly built house for at least one year. The house will settle and the wallpaper will tear. (It’s okay to paint.) Design and decorate your home so it will be appealing to potential buyers. If you paint your dining room purple, be prepared to repaint it before you sell, because just as you don’t always like the decorating you find in other people’s homes, buyers will not share your taste, either.

I would love to help you with all of your real estate needs.  Just give me a call!  Oh, by the way, I'm never too busy for your referrals!! 

10 Deadly Mistakes a Homebuyer Can Make

The most important aspect of purchasing a home is having an expert on your side. The average home owner may purchase two or three homes in their lifetime. Real estate professionals know how to navigate through the potential pitfalls of purchasing a home. They can help you avoid costly mistakes such as: choosing the wrong lender, the wrong type of home, failing to get a thorough home inspection and problems with the title. Any of these problems can cause you a lot of money and grief.
Do not buy a home without a real estate agent to represent your best interests. The seller pays your real estate agent's fees and will be using a professional real estate agent to look after their best interests. Buying a home through an agent that represents your best interests costs you nothing and can save you thousands. 

Here are some of the most common mistakes buyers make, which often costs thousands of dollars, large investments of time and loads of grief:

1. Plan Before You Purchase.
Purchasing a home is an emotional experience. Make sure to sit down with your real estate agent and map out a strategy. Don't let just one aspect of the home drive your decision. Try to answer the following questions.

• Where would you like to live? How far do I want to commute?

• How much home can I afford? Get pre-approved!

• What type of home do you want?

Come out of this exercise comfortable with your area and your mortgage.
2. Get The Right Lender.
There are many types of loans available and getting the right one for your situation is crucial. There are also many lenders vying for your business. Some are online and some local. Getting a good local lender is crucial. Your real estate agent should be able to make recommendations from lenders they have experience with. A good lender will make sure you get the right loan and rate.
3. Identify Your Opportunities.
If you're looking for a deal, you need to know where they are. You real estate agent is a excellent resource for finding deals. They work in your market and probably know of several sellers that may have special circumstances. These circumstances could be divorce, relocation or loss of job. Work with your agent on this and you may be able to save yourself thousands.
4. Get A Good Home Inspector.
Just like any profession, there are both good and bad inspectors. Bad inspectors tend to overlook a lot of problems. You want an inspector that will scrutinize every aspect of your home. Your real estate agent knows the industry and can recommend good inspectors. You do not want to purchase a home that has structural or other serious defects because the home inspector overlooked them. This could cost you big!
5. Not Getting Clear Title.
Purchasing a home with a "clouded" title can be both financially and emotionally draining. Learning after the fact the previous owner still owed contractors money for the finished basement on your property which is now a lien against your property causes a lot of grief. Your real estate agent will help you purchase title insurance and make sure the title to the property is free and clear.
6. Don't Waste Time.
Home buyers can waste valuable hours in front of computers searching for homes online. Most times the homes you find are not the best deals. Let your real estate agent save you that time to spend on what is important to you like your friends, family and work. Let your agent find the right home and notify you when it's available.
7. Don't Forget About Resale.
It is very easy to forget about resale when you are house hunting. As you tour homes, try to put yourself into the perspective of a seller. There may be some quirky characteristics that draw you, but homes with only one closet may be hard to resell when the time comes. When you buy you should also be thinking about the time it comes to sell.
8. Do Go Back and Check the Neighborhood.
Most home buyers do their shopping on the weekends. But what happens there on the weekdays or after dark? Does the passing street fill up with cars during commute times? Do the neighbors have their stereos blaring? The only way to answer these questions is by checking the neighborhood at various times.
9. Do the Final Walkthrough.
Not completing the final walkthrough can be a crucial mistake. Before closing, make sure you check to see any requested repairs have been completed. Make sure there is no damage you were unaware of and that nothing else has changed. Any problems after the purchase are yours.
10. Not Buying at All.
If you can afford to purchase a home and don't actually purchase a home, you will lose out on tax deductions, appreciation in the value of the home and the generation of home equity. Not buying, when you can is perhaps the worst mistake of all.

Call me for all of your real estate needs!!  I'm never too busy for your referrals!!!!