Buy Your First Home Before December 1, 2009 $8,000 Tax Credit
Check Your Credit Score
If you are planning on buying or refinancing a home, be aware that new credit-report inquiries from lenders and credit providers (other than on your existing accounts) can lower your credit score. By checking your credit score before applying for a mortgage, you can find out whether you are close to the cut-off point for a better rate. If so, be particularly careful to minimize the number of new inquiries.
Inquiries from lenders/creditors make up 10% of your total score, and while one new inquiry from a lender is not likely to make a big difference, it could lower your score by up to five points and will affect your credit score for a full year. Since multiple inquiries will further lower your score, be sure to avoid applying for credit cards, auto loans or other credit while you're getting ready to purchase or refinance a home.
As a first-time home buyer you can take advantage of the 2009 Tax Credit. Don't let time slip by. This Tax Credit ends December 1, 2009.
Did you know that in 1981 interest rates on 30-year fixed-rate mortgages averaged 16.63%? If you were trying to buy or refinance a home back then, anything under 10% would have seemed like a slice of heaven. Today's rates would have seemed positively mythical.
Rates change daily, so the first step in deciding whether refinancing could benefit you is to get a current rate quote and an estimate of closing costs and fees. (We'll be happy to provide a list of lenders we've worked with who can help.)
Of course, homeowners with the best credit get the best rates, so be sure to check out your credit report -- whether you are buying or refinancing -- before contacting a lender. You can obtain a free credit report once every year from each of the three major credit reporting agencies -- Equifax, Experian, TransUnion. You can even see your credit reports today by making your request online at www.AnnualCreditReport.com. Allow 15 days for processing time if you request your report by phone -- (877) 322-8228 -- or by writing to Annual Credit Report Request Service, P.O. Box 105281, Atlanta, GA 30348-5281.
If you are refinancing, a major decision factor will be whether the difference between today's rate and your current mortgage rate is enough to justify the costs of refinancing. You are likely to see the biggest difference in interest rates if you:
Have improved your credit score since purchasing.
Took out a jumbo loan (at a higher rate) and your loan balance is now below the conforming loan limit (which varies by area nationwide).
You made less than a 20% down payment (and paid a higher rate) but now own 20% equity in your home. Cancelling private mortgage insurance (PMI) is another possible savings opportunity in this situation.
You'll want to make sure you will own the home long enough for the money you save by refinancing to recoup the costs. For example, if you pay $5,000 in refinancing costs to lower your monthly payment by, say, $100 ($1,200 per year), you would need to keep the home just over four years in order for your savings to recoup the costs ($5,000 ÷ $1,200 = 4.17).
Refinancing can benefit homeowners in a variety of ways:
Lowering your monthly mortgage payment.
Shortening the term of your loan to save interest expense.
Shifting from an adjustable-rate mortgage to a fixed-rate mortgage.
Consolidating loans.
Tapping your home's equity, perhaps to pay for a major expense, such as college, or to pay off higher-rate debt, such as credit-card accounts.
How To Calculate Square Footage
If you've ever taken a tape measure to your home or one you were considering buying, you may have found some variance between your measurements and the ones noted on an appraisal or listing. Here's how homes are supposed to be measured according to American National Standards Institute (ANSI) standards.
Finished square footage is the finished area at floor level measured to the exterior surface of outside walls.
Above grade finished square footage counts finished space entirely above grade, whereas below grade includes areas wholly or partly below grade.
To include a finished area in finished square footage, it must have a clearance of at least 5 feet (e.g., under sloping ceilings, stairwells) and at least half the area in the room must have ceilings of at least 7 feet or higher.
Finished areas that protrude beyond the finished surface of the exterior walls (e.g., chimneys, bay windows) and do not have a floor on the same level cannot be included in the calculation of square footage.
Despite the above, ANSI says, "Calculations for square footage may vary due to current area tradition of specific guidelines (ERC Guidelines)." So, it is important to find out which guidelines the stated size was based on.
For the uninformed, blogging is hitting the Internet today and making a real impact! What is a blog? An easy explanation of this is a WEB LOG or a journal on the web … it’s a place where folks can “voice” their thoughts, share ideas, or comment on those of others. The Chapel Hill, Carrboro and Durham area now has such a blog where new items of interest will be posted and where comments can be made. Topics can range from those related to real estate and community highlights to local events of interest or anything personal or business related that might be perceived as worthwhile information for public knowledge, discussion and/or use. It’s even possible to subscribe to a blog of interest and receive textual updates on your iPod! Check out the latest updates for the Chapel Hill, Carrboro and Durham at:
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If you've ever taken a tape measure to your home or one you were considering buying, you may have found some variance between your measurements and the ones noted on an appraisal or listing. Here's how homes are supposed to be measured according to American National Standards Institute (ANSI) standards.
