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Know Your Debt-to-Income Ratio When Buying a Home

by Masha Halpern

Knowing your debt-to-income ratio is important when you find your Chapel Hill dream home and are ready to apply for a mortgage.  Your lender will look at it and it will be a major contributing factor to whether you are approved or not.  If you are not familiar with your debt-to-income ratio, below you can learn more about it and how it affects your financing.

Debt-to-income ratio is simply a comparison of the money you earn to the money you owe. It includes credit card debt, existing mortgages, auto loans, and any other personal debt.

Your mortgage lender will look at your Debt-To-Income (DTI) to evaluate your ability to afford your new mortgage. You should have a good idea of what your DTI ratio is before you approach a lender or consider buying a new home.

You ultimately want to achieve a low DTI ratio. A high number obviously means that you have less disposable income and less ability to maintain the home once you purchase it. With foreclosures at an all time high, lenders are not willing to assume any additional risk in lending.

Most lenders seek DTI ratios in the 20-36% range or lower, with no more than 28% of debt dedicated to the mortgage itself. While some lenders will consider higher ratios, DTIs in the upper 30% range are considered high risk.

There are several different calculators home available online to help you determine your ratio, and you can always check with your financial institution for guidance on determining your DTI ratio.

Here’s a simple formula:

  • Add all your monthly payments (mortgage or rent, car, credit cards, any other debt payments)
  • Add your gross income (before taxes), bonuses, alimony, or any other outside income and divide by 12
  • Then divide the total number in (1) by the final number in (2)
  • The result is your DTI ratio

 

If you are either ready to buy a Durham home or are just interested in  your financial health, it is a great idea to know your DTI and understand the steps to lower it and become as close to debt-free as possible!

 

 

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Is Your Home Priced to Sell?

by Masha Halpern

Why is it that some homes sit on the market for a year while others sell like hot cakes? Frustrated sellers will blame a bad market, and it's definitely a challenging one we're navigating now, but a savvy real estate professional will tell you that many times, a slow sale is often attributed to the listing price.

If a home is overpriced, buyers will stay away. But, if the price is competitive with similar homes in the area and “shows” better than the competition, it will have a better chance of being sold quickly.

The secret is perfecting a technique that’s as American as apple pie: comparative shopping!

Although comparing houses with different styles, square-footages and locations is challenging, real estate professionals still feel it’s one of the best methods to use when determining a home’s market value.

A responsible real estate agent will effectively evaluate a home’s worth through a process known as Comparative Market Analysis (CMA). Taking a look at assets, such as a swimming pool, bigger than normal living spaces, a fantastic view, adjacent city parks and other attractions, the agent will begin to compare your home with similar properties, called “comparables,” that have sold in the area within the last six months. Typically, it is a realistic price range that will ensure you top dollar and a reasonably quick sale.

However, factors such as the amount of time needed to sell your home can affect the agent's price recommendation dramatically.

Assuming you have sufficient time to market the home, here are a few small steps you and your agent can take to finding the right price for your property.

The best comparisons can be made with similar homes that have been sold within the last 45 days as opposed to the standard six months. Any longer, and other factors, such as the economy, could cloud your view of how much your home is really worth.

Another good benchmark is to review the selling prices of homes that have just been sold and are pending closes. Most MLS services provide information on deals pending that most real estate agents should be able to share with you.

A good rule of thumb before setting a price is to make 20 comparisons of comparable properties within a one-mile radius of your house. Once completed you can feel comfortable that the price you’ve picked is a good gauge of the home’s worth and won’t discourage qualified buyers.

Being open and honest about what you see as the home’s greatest strengths and biggest weaknesses will also help your agent get a better feel for how to best evaluate (or assess) and market your home. Think of your home as if you were the buyer. If your home is listed at the right price, you’re well on your way to a speedy and fruitful sale with the right real estate professional.

 

 

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Top 10 Reasons Why Now Is The Time To Buy!

by Masha Halpern

You may be hesitant to buy because of all the talk of a poor economy, but now is actually the best time to buy! For many North Carolina residents, it can actually be more cost effective to own than to rent!

Here are ten great reasons that NOW is the time to buy!

10. You'll get a better home. In different parts of the country, it's hard to find a good rental.

9. The National Association of Realtors puts the current inventory at around 4 million homes. That's enough for a years worth of sales. That means a lot of choices as well as great prices.

8. Sooner of later, the market will improve. There will be more demand than supply. The population is supposed to grow by more than 100 million people over the next 40 years. That means a lot of people will be looking for new homes in the future.

7. Your home isn't the stock market and it shouldn't be viewed as a way to get rich. Real Estate prices will go up again. Equity in your home is another way of investing in your future.

6. If offers some inflation protection, especially if you are young and raising a family.

5. It will be yours. You can have the kitchen and bathrooms you want, you can move walls or build an extension. You can even paint your home bright red. Few landlords will allow you to do that.

4. It's a buyer's market. We all like a good deal, we feel a sense of satisfaction after negotiating.

3. It's forced savings.  If you rent an apartment for $2000/month instead of buying one for $2400/month, renting seems like a good idea but will you save the $400 for the future? Most people won't and since part of that monthly payment as an owner is tax deductible, you do the math.  You are just paying yourself by building equity in your home.

2. You'll save on taxes. You can deduct mortgage interest and real estate taxes from your income taxes.

1. Mortgages are cheap. Interest rates are at historic lows. Two years ago they were around 6.3%. Now they are around 4.3% for a 30 year fixed loan. That's a big difference in your monthly payment.  When inflation goes up, interest rates will go up.

Questions and not sure who to ask? Need help finding your dream home? This market we are facing poses challenges but also opportunities.  Contact us to help you find the best home in this buyers' market for your family!

 

 

 

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Chapel Hill Schools recognized for Highest Graduation rate

by Masha Halpern

Its really nice to get good  MONDAY MORNING news about our local public schools! I found this article on the Chapel Hill Carrboro main school system web site and think its worth posting! Its about Chapel Hill Schools recognized for highest graduation rate. That is GREAT news! Here is the link. click the highlighed word links if you would like more information on our local school system or our area. Im happy to answer any questions about our local housing market - if you are buying, or selling.

Tips For Moving With Pets

by Masha Halpern

If considering a move to North Carolina, there are many things that need to be planned. If you have pets, it is important to not forget about their needs and it is a good idea to formulate a plan to make the move a smooth transition. Below are some tips that can help you to get organized and make your move a calm transition for your furry members of your family.

  • As part of your plan, appoint one person in the family that will be in charge of the pet. This will eliminate any confusion as to who has responsibility and will help for a smoother move.
  • Schedule an appointment with your veterinarian a few weeks before your move for a check up. Be sure to attain your pet's veterinary records so that they can be forwarded to your new veterinarian. Certain localities may have stringent requirements or restrictions regarding pet ownership. You may need permits or registrations.
  • Prep your new home for pets. Pets may be frightened and confused in new surroundings. Choose a room that you can set up for them with all their familiar items such as toys, foods, bedding, etc. Pack these items in a handy spot so they can be unpacked right away.  
  • If you are moving your pets by car be sure to plan for several stops along the way. Pets may find car travel extremely distressing and stopping for fresh air and breaks can help. Don't forget any medications your pet might need as well as a leash.
  • If you are traveling long distance and plan on staying overnight at a hotel, be sure to call in advance to make sure that pets are accepted.
    If you are moving your fish, be sure to check with your local Aquarium or Pet Store ahead of time on the best way to safely transport your fish.
  • If your pets are not micro-chipped be sure to get a new pet ID tag with your new address and contact phone numbers and if they are micro-chipped be sure to update the info with your microchip company.  

Your pets are a part of your family, these tips will make it easier on them (and you!) when moving into your new home!

 

 

 

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Tips for Selling Your Home in the Fall

by Masha Halpern

It’s that wonderful time of year again! Fall is offically here and that means that home sellers need to go about selling their home a little differently than they would if it were still summer. Here are a few tips to sell your Chapel Hill home in the fall:

Be competitive-price your North Carolina home 5-15% below comparable homes on the market.  In this tough economic climate, you want your home to stand out in some way. 

Fall is a hard time of year to maintain your home but it's also a beautiful time of year. Make sure your yard is clear of leaves, clean out your gutters, and touch up paint.  A few simple maintenance tips can go a long way.

Buyers like a bargain, so don't be discouraged by low-ball offers. Look at it as an opportunity to negotiate. Live by the quote: "Don't take anything personally." If you don't want to come down on price, offer to pay for closing costs or repairs.

Most of all, be patient. Your house will sell, it just may take more time.

 

 

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Photo of Masha Halpern - Boutique Real Estate Real Estate
Masha Halpern - Boutique Real Estate
Keller Williams Realty
101 Cosgrove Avenue, Suite 200
Chapel Hill NC 27514
Direct 919-951-1780
Toll Free 877-478-4669
Fax: 919-928-9030




Masha Halpern of Keller Williams Realty provides real estate services in the Chapel Hill, Carrboro and Durham, North Carolina area including real estate services for buyer, sellers and those relocating to the surrounding areas of Apex, Bahama,Cary, Efland, Hillsborough, Holly Springs, Mebane, Raleigh, and Wake Forest. Search for homes in Chapel Hill, Carrboro, Durham or the surrounding communities.  Request a market analysis for your North Carolina property.  I list and sell residential real estate, investment property, vacant land, lots for sale in Chapel Hill, Carrboro and Durham, North Carolina area.

Chapel Hill, Carrboro and Durham, North Carolina real estate and homes for sale in North Carolina - Masha Halpern & The Smart Move Team

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