All posts by Tim McBrayer

Risk Rate Relationship

Regardless of what a lender quotes on mortgage rates, the actual rate a borrower pays is based on a number of variables. Lenders determine whether to loan money and at what rate based on the risk involved with the transaction.Sorry not available.png

Factors that increase the risk that the loan will be repaid will proportionately increase the interest rate charged to the borrower. If the risk becomes too high, the loan will not be approved.

  • Loan amounts – conventional mortgages above conforming limits as set by Fannie Mae and Freddie Mac are considered jumbo loans and generally have a higher interest rate.
  • FICO score – the lowest interest rate is reserved for the highest score; the lower the score, the higher the rate the borrower will pay.
  • Occupancy – borrowers occupying a home as their principal residence are considered a better loan risk than second homes and investment properties.
  • Loan purpose – purchase transactions generally have the lowest interest rate with refinancing for better rates and terms being priced slightly higher. An even higher rate might be charged for refinancing and taking cash out of the property.
  • Debt-to-Income Ratio – a borrower’s monthly liabilities divided by their gross monthly income develops a ratio that helps lenders to assess the borrower’s ability to repay the mortgage.
  • Property Type – some types of property are considered higher risk than others which could adversely affect the rate.
  • Loan-to-value – the lower the percentage of the loan to the appraised value of the property will generally lower the interest rate.

Any combination of these factors could limit a borrower’s ability to secure a mortgage at the rate initially quoted. Pre-approval by a trusted mortgage professional can be the best way to know what rate you can expect to pay. Please call for a recommendation of a trusted mortgage professional.

Pre-approval is Good for Everyone

Buyer’s mortgage pre-approval is good for everyone in the transaction. It saves time, money and removes the uncertainty of knowing whether the buyer will be qualified after negotiating a contract. The direct benefits include:

  • Looking at “Right” homes – price, size, amenities, locationPre-approval is good for everyone.png
  • Find the best loan – rate, term, type
  • Uncover credit issues early – time to cure possible problems
  • Negotiating power – price, terms, & timing
  • Close quicker – verifications have been made

There is a significant difference in having a trusted mortgage professional take a loan application and run all the necessary verifications compared to going through calculators on a lender’s website. Beside the peace of mind, the cost of being pre-approved is a bargain and generally, limited to the cost of the credit report.

Even if a person has been pre-approved, a second opinion from a different lender may be a good option. It can verify there is a good deal or you’ll discover that you can improve it. Either way, it works to your advantage. Contact me if you’d like a recommendation of a trusted mortgage officer.

Easier to Play the Game

It’s much easier to play a game when you know the rules so you can avoid mistakes that may keep you from winning. Homeownership isn’t a game but there are some rules that will protect your investment and increase your enjoyment.

Most people want a home of their own to raise their family, share with their friends and to feel safe and secure. In most cases, it is also their largest asset. These suggestions can help protect your investment and make homeownership more enjoyable.12519621-250.jpg

  • Don’t overpay for your home
  • Maintain your home to protect its value
  • Minimize your assessed value to lower property taxes
  • Make extra contributions to save interest and build equity
  • Validate the insured value of improvements and contents
  • Be aware of current surrounding property values
  • Make mortgage interest payments deductible
  • Invest in capital improvements that increase market value
  • Don’t over-improve the neighborhood comparables
  • Keep records of capital improvement & other maintenance

We’d like to be your personal source of real estate information and we’re committed to helping from purchase to sale and all the years in between. If you need assistance with any of the items mentioned in this article or need a recommendation for a service provider, it would be our pleasure to help.

Protecting Your Credit

One of the “big” three credit bureaus recently announced that a massive hack has exposed the personal information of up to 143 million people. To add perspective to that statement, that is about two-thirds of American credit card holders or close to half the population of the United States. Part of protecting your credit is being vigilant and making it difficult for thieves to steal your identity. 17405556-250.jpg

If you suspect you are a victim of identity theft, an initial step is to place a fraud alert on your account. Contact one credit reporting company (Equifax, Experian or TransUnion), tell them you are an identity theft victim and ask the company to put a fraud alert on your credit file. Confirm that the company will contact the other two companies.

The initial fraud alert will make it harder for an identity thief to open accounts in your name. The alert lasts for 90-days and it can be renewed.

A more severe precaution called a credit freeze restricts access to your credit report. A credit freeze makes it more difficult for thieves to use your identity to apply for loans or credit cards in your name.

By contacting each of the three credit reporting agencies separately, you can request a temporary freeze. This would prevent them from providing credit information without both your explicit permission and a PIN that temporarily lifts the freeze.

Unlike the fraud alerts, the agencies may charge you a fee for instituting the freeze in addition to another fee to lift the freeze each time.

A credit freeze will not affect your credit score. If you are in the process of buying a home, contact your loan officer and discuss the decision you are considering. If you will be making a mortgage application in the near future, you can temporarily lift the freeze for the lender you are using.

A trusted mortgage professional is a key team member in purchasing a home. Making an appointment with them is one of the first steps along with determining your real estate professional. Contact us to get a recommendation of a trusted mortgage professional.

To request a credit freeze, you can do it online or by phone:

Equifax – 800-349-9960 | Experian – 888-397-3742 | Trans Union – 888-909-8872

For more information, see Credit Freeze FAQs at the Federal Trade Commission.

It is important to personally monitor your credit reports through annual credit report.com to discover any unusual activity.

Investing on Your Side of the Fence

The grass tends to look greener on the other side of the fence. Maybe that’s why some people invest in things they don’t understand. It has been said that the grass is just as hard to mow on the other side of the fence so stay with what your most familiar.3283858-250.jpg

Single-family homes used for rental property give a person a chance to invest in something they understand: a home. They also have distinct advantages over other types of investments.

An investor can borrow up to 80% of the value at fixed interest rates 30 years. The financing creates leverage so that the investor can benefit from the increase in value of the home not just the down payment.

It is reasonable to expect that the home will appreciate while providing tax advantages and practical control that are not available with many other investments. Low housing inventory in many markets has caused rents to increase and low new home growth will make it difficult to keep up with demand.

Consider a $150,000 home purchased for cash that would rent for $1,500 per month. With $18,000 income and allowing for property taxes, insurance and maintenance, it is still reasonable to expect $10,000 net income. There would be an 8% return on investment without considering tax savings or future appreciation compared with 5-year CDs paying less than 2.35% and a 10-year Treasury yield at 2.13%.

An added bonus is the amortization that occurs on the loan as the principal is reduced with each payment. It becomes a forced savings account that increases the equity and isn’t taxable until the property is sold.

The reasonable control has a lot of appeal to many investors who find the volatility of the stock market unacceptable and don’t want the risk associated with alternative investments. Please contact me if you’d like to know more about available opportunities.

HPW Hurricane Relief Efforts

Just over a week ago, with heavy hearts for Houston and our Texas neighbors, we announced our HPW Hurricane Harvey Relief Drive.

With the generosity of our Coldwell Banker Howard Perry and Walston real estate team and the kind Triangle community, we were able to collect $3,600 and match it dollar-for-dollar through our HPW Foundation for an overall donation of $7,200 to benefit the:

“Our HPW real estate team showed up to the plate for Texas and all those affected by Harvey,” said Matt Horton, HPW Foundation President and Coldwell Banker Howard Perry and Walston Director of Marketing. “Their generous donations allowed us to raise more than $7,000 to help numerous nonprofit organizations continue their relief efforts.”

Hurricane Irma

Today, we watch with great trepidation as Hurricane Irma approaches Florida with a projected path leading up through Georgia, Alabama and into Tennessee. We know this powerful storm will cause major destruction and devastation as it moves along leaving even more of our nation’s neighbors in need.

Our HPW Foundation plans to meet those needs head on and will be announcing additional relief efforts after Irma departs. “We do our best to Help People Win in all ways, in all circumstances,” added Horton. “Once Irma’s winds settle, we will announce a plan to provide support to the communities and people who need it the most.”

HPW Open Houses | September 9 – 10

With Hurricane Irma making her way towards Florida this weekend, many of us will be checking our TVs and handheld devices watching the progressing storm with sincere trepidation for our Southern neighbors.

The greater Triangle region is currently outside the cone of concern and will hopefully fair well with a prediction of heavy rains and Tropical Storm strength wind gusts set to arrive on Monday and Tuesday.

Fortunately, a cooler, sunny weekend lies ahead allowing us to venture outside to run errands, work in the yard, meet up with friends and family, and continue our house hunting efforts.

If you plan to do the latter, you will be happy to know that our Coldwell Banker Howard Perry and Walston real estate agents will be ready for you. They will be hosting open houses this Saturday and Sunday in the neighborhoods you’d like to call home. Pay them a visit and see all that their listings have to offer.

Featured Open Houses

Scroll through the handful of open houses spotlighted below and then visit our Triangle area open houses website for a complete list of HPW real estate listings with home tours scheduled this weekend.

45 Bailey Farms Drive, Youngsville, NC 27596
$319,900
Sq Ft: 2,806 | Beds: 4 | Baths: 3 (full)
Open Houses: Saturday, September 9 from 11 a.m. to 6 p.m. and
Sunday, September 10 from 1 to 6 p.m.


109 Allen Ruffin Avenue, Hillsborough, NC 27278
$310,500
Sq Ft: 1,334 | Beds: 3 | Baths: 2 (full)
Open House: Sunday, September 10 from 1 to 3 p.m.


275 Hawfields Drive, Pittsboro, NC 27312
$575,000
Sq Ft: 3,187 | Beds: 3 | Baths: 2 (full) 1 (1/2)
Open House: Sunday, September 10 from 1 to 4 p.m.


322 North Wingate Street, Wake Forest, NC 27588
$399,900
Sq Ft: 2,542 | Beds: 4 | Baths: 3 (full)
Open House: Sunday, September 10 from 1 to 4 p.m.


111 Booth Meadow Lane, Durham, NC 27713
$949,900
Sq Ft: 5,050 | Beds: 4 | Baths: 3 (full) 1 (1/2)
Open House: Sunday, September 10 from 2 to 4 p.m.


313 Staples Drive, Rolesville, NC 27571
$319,900
Sq Ft: 2,553 | Beds: 3 | Baths: 2 (full) 1 (1/2)
Open House: Sunday, September 10 from 2 to 4 p.m.


112 Charlemagne Court, Cary, NC 27511
$565,000
Sq Ft: 3,660 | Beds: 4 | Baths: 2 (full) 1 (1/2)
Open House: Sunday, September 10 from 2 to 5 p.m.


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Cary, Durham and Raleigh are Among the Nation’s Top Real Estate Markets

What do you get when you combine a reasonable cost of living, a multitude of career opportunities and immense livability? Introducing the Triangle—the perfect place to live, work and play, and home to three of the five North Carolina metro areas ranked on WalletHub’s 2017 Best Real Estate Markets lists.

The personal finance website rated 300 cities and towns across the nation against 21 key indicators of housing-market attractiveness. Factors considered included affordability, economic development such as job growth and unemployment rates, and real estate market trends such as average days on the market for listings, number of rental properties, and home sales.

Consider Cary

After numerous accolades bestowed on the Western Wake County town throughout the year, Cary scored a single digit place on the top 100 list, ranking fourth with high marks for housing affordability, population and job growth rates and more. Compared to towns its own size, Cary ranked even higher taking second place in WalletHub’s mid-size cities category.

About Cary

Cary is a great place to call home. Named among the safest cities to raise a child by SafeWise, one of WalletHub’s top recommendations for first-time home buyers, and a popular choice for millennials as reported by SmartAsset, the Triangle suburb has a lot going for it.

Want a well-developed suburban community with commuter convenience? Seeking green space and parks? Want easy access to retail centers and restaurants? On the hunt for a home in a family-friendly neighborhood? You would be wise to add Cary to your list of places to live.

Decide on Durham

The bustling Bull City of Durham was also spotlighted on WalletHub’s city compilations ranking eight on the mid-size cities list and 23rd on the overall list of 100.

About Durham

Probably best known as the home of the Duke Blue Devils, Durham is known nationally for its leading medical, research and educational facilities including Duke Medicine and Duke University. You should know that the revitalized tobacco town offers much more.

Named the “Hippest City in North Carolina” by Vogue Magazine, Durham has a flourishing cultural scene accented by top-rated restaurants and bars. In its American Tobacco Historic District alone, you’ll find the acclaimed Durham Performing Arts Center, the Durham Bulls Minor League Baseball Team, a start-up incubator, and numerous tech businesses.

Relocate to Raleigh

Raleigh and its attractive real estate market also snagged a place on the “best of” list coming in ninth ahead of Charlotte among the large cities reviewed and 44th overall.

About Raleigh

There are only a few national “best of” lists that leave Raleigh off, and for good reason; the Capital City stacks up well against home buyers’ must-haves and wants.

The city’s ideal economic climate attracts companies, large and small, that bring high-paying jobs to town and the influx of professionals who follow.

Raleigh’s livability is another asset that adds appeal. From miles of greenway trails and public parks to performance centers and cultural events, people of all ages and interests are bound to find something they enjoy.

“Raleigh and the greater Triangle area are experiencing rapid population growth due to the multitude of offerings within in our cities and towns,” said Nancy Harner, senior vice president of the Relocation and Corporate Real Estate Services Division at Coldwell Banker Howard Perry and Walston. “We have the innovative jobs professionals want, the homes they seek for their families, and a desirable costing of living that makes relocating worth their while.”

Learn more about Coldwell Banker Howard Perry and Walston and the cities and towns our leading team of realtors and agents serve.

Source: WalletHub

Deductible Dilemma

The purpose of insurance is to shift the risk of loss to a company in exchange for a premium. Most policies have a deductible which reduces the amount of the claim that is paid by having the insured share in the first part of the loss.38973594-250.jpg

In the process of managing insurance premiums, policy holders often consider higher deductibles to lower the premium. Lower deductibles mean less money out of pocket if a loss occurs but also results in higher premiums. Higher deductibles result in lower premiums but require that the insured bear a larger part of the loss.

A small fire in a $300,000 home that resulted in $2,500 of damage might not be covered if the policy holder has a 1% deductible. If the homeowner can afford to handle the cost of repairs in exchange for cheaper premiums, it might be worth it. On the other hand, if that loss would be difficult for the homeowner, a change in the deductible could be considered.

Homes in high-risk flood areas with mortgages from federally regulated or insured lenders require additional flood insurance. However, each homeowner needs to assess the risk of being able to financially sustain a flood loss on their home when flood insurance is not required. The recent events in south Texas and Louisiana are evidence that the unexpected can happen.

It is important to review your deductible and discuss risks with your property insurance agent so that you’re familiar with the amount and make any changes that would be appropriate before a claim is made. The FEMA website has information and frequently asked questions about flood insurance.