Outer Banks Real Estate

Outer Banks Mortgage Tips - Checklist for items needed when applying for a mortgage

Be Prepared is the Boy Scout Motto.  With today's ever changing mortgage market - it is always good to be prepared when applying for a loan.  Putting this information together and getting pre-approved (not just pre-qualified) before you start looking at Outer Banks property can greatly reduce the stress involved in the buying process. 

Application Information (for all applicants)

• Home address(es) for the previous two years
• Your social security number(s)
• Employment information for the previous two years including employer name, address and phone number
• Income information including salary, overtime, bonuses, commissions, dividends, interest, retirement and any other source of ongoing income
• Liquid assets including bank name, account type, balance, and source of down payment
• Other assets including the value of bonds, stocks, life insurance and retirement funds.
• Liabilities including creditor names and outstanding balances for all debts including notes payable, 401(k) loans, life insurance loans, stock pledges, alimony, child support, co-sign loans, credit union loans, and other liabilities
• Real estate owned including property address, market value, outstanding liens, rental income, mortgage payments, taxes, insurance and maintenance dues

Property Information

• Purchase contract
• If it is a Planned Unit Development (PUD) or condominium

          Name of development or project
          Phone number of the homeowner's association (if available)

• New construction:

          Year land or lot was acquired
          Original cost of land/lot
          Amount of liens
          Estimated cost of construction

• Refinance loans:

          Year property was acquired
          Original cost of the home
          Cost of improvements
          Amount of liens
          Description of improvements

If you have any questions, please feel free to contact me at your convenience. 

Outer Banks Real Estate Market Update

I frequently speak with Realtors on the Outer Banks to get their take on the Real Estate Market Conditions.  Over the holidays, I had a chance to meet Holleay Parcker - the owner of Spinnaker Realty in Kitty Hawk.  Holleay has an interesting take on the market and I thought I would share it with my readers:

Waiting for the best moment to get on the boat, many buyers may find that their ship has sailed

I had an interesting conversation with an investor yesterday who owns scores of properties on the Outer Banks. As you might imagine, the topic of our conversation was the Outer Banks real estate market. 

We shared our thoughts and it was a lively discussion. Here are the high points:

The market is constantly running ahead of us all. At any given time, there are always properties that are under contract. It typically takes between 30 and 45 days to close on a property, although there are many instances where it is advantageous to the seller or the buyer (or both) to delay closing for an extended period, which can be several months.

These under contract properties represent the newest market data when these transactions close and these new closed sales establish market price. But since no one is privy to the price a property has sold for until it records (except of course the parties involved in each transaction), we all must wait for the sale to close before we have access to this information.

And by that time, more properties will have gone under contract…and so on, and so on…

Since the market is running ahead of us all, no one will know precisely when the market has hit bottom and is turning back to the seller’s favor. No one…

If you are waiting to buy until the market has hit the bottom, you won’t be buying at the bottom, because none of us will know until well after the fact when that has occurred. And by then, the market will be on the upswing, turning towards the seller’s favor once more, the best opportunities already a thing of the past.

Many buyers are waiting to buy thinking that they will ‘know when the time is right’. For most people, this means that they will need to see the market improving and they will need to hear from the media that conditions have changed. Many people are waiting for the media to make some kind of proclamation that ‘Now is the time! Go forth and buy real estate!’

But consider for a moment who has the most recent (and most reliable) information about the Outer Banks real estate market – it is the top-producing real estate agents. They are the ones who know how to analyze the information in the mls in meaningful ways. Of course, all Outer Banks real estate agents have access to this information, but not all of them possess the necessary skills to know how to interpret it.

The media does not have access to the relevant local market information that real estate agents do. They have to interview those closest to the market to get it. (Get it?) 

So, if you really want to know the state of the market on the Outer Banks, you won’t get that information by reading the paper or listening to the nightly news. By the time the media ‘gets it’ that the market has turned, guess what? 

The market will have turned.

I’ll leave you with the most valuable thought the conversation produced. It was this:

You don’t have to buy at the bottom to make money in real estate. You just have to get a good value.

If you just heard that, then you know all that you need to know about whether or not now is the right time to buy.

The boat is in the dock. Will you be getting on board?

If you have any questions for Holleay, you can reach her at 877-207-1617. 

 

OBX Bloggers

Saw this motivational poster on Ishkur.com and thought it was right on target.  For those already singing in the choir - you know the feeling.  For those just starting to blog - just wait.  You can blame it on writer's block, lack of time, lack of motivation or quiet crazy locals - we all go through periods of heavy posting and then long spells of procrastination. 

Happy Holidays to all of the Outer Banks Local Bloggers and I look forward to reading great posts in 2008. 

Outer Banks Mortgage Tips

Shopping for an Outer Banks Mortgage? If so, you're probably watching mortgage rates daily — wondering just how they may change when you're ready to close on your new loan.

Your monthly mortgage payment depends in part on your interest rate, and the rate on your loan isn't set just by making a mortgage application. Until you explicitly lock your loan pricing, the rate on your pending loan will float with financial market conditions. Your monthly payment may end up being higher or lower than it would have been under the conditions that prevailed when you applied for the loan.

Generally, you can lock your loan pricing any time after application but at least five days before your scheduled closing.

When should I lock?

If you believe that financial market fluctuations will lead to higher rates before you close on your house — or you simply want to avoid that risk — you should consider locking after you've made your application. The downside is that, if financial markets push rates lower, you may miss out on a getting a lower rate and a lower monthly payment.

When you lock:

• You have protection from financial market fluctuations in interest rates for the length of the lock period. You are not guaranteed that a specific rate will apply to your loan.
• Your final rate, which may not be determined until closing, will reflect the pricing that was available at the time you locked for loans with your specific transaction characteristics (points paid, loan-to-value, etc.) and your credit profile. For more information, please refer to the Loan Pricing Disclosure.
• You can select a specific length of time, usually 30 or 60 days — but sometimes as long as a year. 
• You can lock anytime you locate a property, or start your refinancing process, up until five business days before the closing. 
• Breaking a lock to take advantage of lower market rates typically involves an additional fee.

When should I float?

On the other hand, if you believe that financial markets will push rates lower between the time you apply and the time you close, you might consider floating. You may be rewarded with a lower mortgage rate and a lower monthly payment. Of course, you would be risking a higher rate and a higher monthly payment if market rates rise before you lock.

An important criterion when approving a loan application is the borrower's ability to make the mortgage payments. If rates rise, the resulting higher payment could negatively affect loan approval, and you could be asked to consider other financing alternatives to gain approval (a higher down payment, for example, to lower your monthly payment). So, if you're thinking about floating, you also should consider how much rates would have to rise before they affect your ability to qualify under your desired loan terms.

When you float:

• You can take advantage of falling rates before you close on your loan. Lower rates mean lower monthly payments.
• You are not tied to a specific rate.
• You can switch from floating your rate to locking it in anytime after applying and at least five business days before closing.

Only you can decide if locking in a rate is right for you. If you'd like to track rate trends, subscribe to our Wells Fargo Mortgage Rate Monitor^SM for regular mortgage rate updates via email. In addition to tracking trends, we can send an email notification to you when rates fall below a specific number.

Dogs on the Outer Banks

Many people say you resemble your pet.  I would hate to see the owner of this dog.

Joe Lamb Jr. posted guidelines for dogs on the beach in each town on the Outer Banks. 

Kitty Hawk has the craziest law

  -DOGS ARE ALLOWED ON BEACH MEMORIAL DAY TO LABOR DAY, 10AM TO 6PM, AS LONG AS THEY ARE ON A 6 FT LEASH. ANY OTHER TIME OF YEAR DOGS MUST BE RESTRAINED ON A 12 FT RETRACTABLE LEASH AND CAN BE LET OFF THE LEASH AS LONG AS THEY DO NOT DISTURB OTHERS AND ARE WITHIN 30 FEET OF THEIR OWNER.

Realtors using Video Technology to deliver a clear message

I work with a lot of Realtors on the Outer Banks.  One of the most common complaints I hear are that some sellers don't understand that prices are not what they were in the summer of 2005.  The Outer Banks is not alone in this challenge.  Today I found Real Estate Zebra and a video they published on YouTube to get the message across to those sellers still stuck in 2005.

What a cool way to deliver a simple message.  Not sure this would be a good way for me to deliver a mortgage update - my neck and head would take up the whole screen.  Customers would miss the message and wonder how my neck could possibly hold up a head that big.

There is good news.  There are sellers that are very motivated and pricing their property to sell.  This creates a great opportunity for those wanting to purchase their dream home on the Outer Banks.

Mortgage Bailout Program - The Good, The Bad and The Ugly

Could not resist borrowing this picture from Realonomics - a Real Estate Blog I subscribe to.  They published an article titled Bush throws the baby out with the murky mortgage bathwater.  Read for yourself what others think of the program:

408 Real Estate Blog

Calculated Risk Bailout Program

Michigan Foreclosure Report

The Real Estate Bloggers

As you can see from the articles above - there are not many people happy about the "bailout program".  From the information I have read - it is guaranteed to make almost everyone mad.  Those that took a risk with Adjustable Rate Mortgages and the rate has not adjusted and have not had one late payment and the loan is on your primary residence and you cannot afford the higher payments - you get a break.  If you don't meet all of the criteria above - tough luck.  For most on the Outer Banks with a Second / Vacation or Investment Property - No Deal.  I can only imagine the conversation with the borrower:

You mean to tell me that I decided to pay a higher interest rate 30 year fixed rate vs. the lower ARM rate and I don't get a break?  AAAUUUUGGGGGHHHH!

Good Fishing Today - look what I caught Ma!

Nice day for fishing on the Outer Banks.  These shots were taken this afternoon by the Avalon Pier.  Most were fishing for Trout but in the five minutes I was there, I saw shark, trout and puppy drum being pulled in.  Here are a couple of photos from earlier today:

The puppy drum on the left got lucky.  The limits according to my Rich Pearson (local Realtor and fisherman extraordinaire) are between 18 and 27 inches for a puppy drum - also known as "in the slot".  This one went back in the drink to be caught another day. 

This is a current shot from the pier - as you can see there is just a little bit of humidity in the air.

While driving south on the Beach Road, I stopped in to see if there was any activity on the Triangle Wrecks - on Second Street.  To my surprise, there were a couple of divers on their way out of the water.  Pretty smooth conditions but they said visibility was only 5'.  Water temps were around 59 degrees.  Not my cup of tea (the 59 degrees and 5' visibility part).  I have been snorkeling on the wrecks with 30+ feet visibility with 80 degree water.   I then noticed something else being washed up on the shore:

The Kill Devil Hills Police said there were two reports - one of a scooter in the surf and one of a stolen scooter.  Good news - scooter found.  Bad news - scooter ruined.  My guess is that someone decided (after many too many) to take a joy ride on a scooter that didn't belong to them and then decided to get rid of the evidence.  What a waste.  I hope Darwin's Law of Evolution keeps the folks responsible out of the gene pool.

Feds Drop Rates another 1/4%

The Federal Reserve cut both the Fed Rate and the Discount Rate by 1/4% today - a move that was anticipated by most in the market.  Some even felt a 1/2% cut was possible but not after the strong jobs reports last Friday.  So what does it mean and how will it affect the Outer Banks Real Estate Market?

Discount Rate (currently at 4.75%) is the rate banks borrow funds from the Fed.  It matters but not directly.

Fed Rate (currently at 4.25%) is the overnight rate for lending money.  This one matters to most of us - see Prime Rate.

Prime Rate (should be 7.25% tomorrow) is typically 3% above the Fed Rate.  This rate is what Home Equity Lines of Credit, some Credit Cards and Auto Loans are based on.  This matters to most.  If you have one of the accounts listed above and your rate is based on the prime rate, you should see a small reduction in your January bill.  That means you can buy your loved ones much nicer presents this year...

For those that own property on the Outer Banks that includes a Home Equity Line of Credit - your interest rate has now dropped 1% since September.  Not a huge savings but it sure doesn't hurt having smaller payments during the off season.  The reduction in rates also makes it easier to qualify for a loan. There are plenty of homes to choose from and motivated sellers. 

What it doesn't mean:

Interest Rates for traditional mortgages did not go down by 1/4% today.  In fact, first mortgage rates sometimes  bump up a little after a rate cut.  The bond market seems to like the reduction because bonds and rates are holding steady.

Funny Apple Commercial Spoof

Found this on a Mortgage Blog - The Mortgage Cicerone.  Like Tony, I am not trying to make a political statement - just thought it was a clever skit.

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