People looking to extract equity from their homes have increasingly been turning to cash-out refinancing, industry observers say. A big reason that people are tapping their equity through refinancing comes down to dollars and cents, according to Amy Crews Cutts, deputy chief economist with Freddie Mac. Because home-equity loans and lines of credit are most often tied to the prime rate, now at 8.25 percent, those options have gotten more expensive even as long-term mortgage rates have remained relatively low, with the 30-year loan averaging about 6.25 percent.

“It’s all about the prime rate,” said Michael Kodsi, chief executive of Choice Mortgage Bank in Boca Raton, Fla. A good number of his clients would rather take cash out through refinancing — whereby their mortgage rate will be fixed — than take out a loan tied to the prime rate, which has the potential to fluctuate and “could go higher down the road,” he said. Freddie Mac said 89 percent of the loans it owns that were refinanced in the third quarter of 2006 had loan amounts at least 5 percent higher than the original mortgage balances, the threshold for considering a loan to be a cash-out refinancing. It’s the highest share of cash-out refinance loans reported since 1990. (more…)

search for : cash-out refinancing, Freddie Mac

Lenoir is one of many North Carolina areas that have been devastated by the exportation of the furniture industry. Hope is on the horizon, however, now that Google, Inc., has decided to build its next “server farm” in the city. A server farm is a warehouse of sorts, housing thousands of computers running applications for the company (such as sorting and storing information). With Google joining Dell and several other large companies in the Tar Heel State, it is hoped that other corporations will see the benefits of expanding into the High Country.

Most leaders in the city believe the employment of these utilities and the increased value of real estate will be a major boost for the Lenoir economy. Google’s decision, however, has not been without controversy. The state of North Carolina waived 100 percent of Google’s business property taxes and 80 percent of its real estate taxes for the next three decades. “We have given away the farm and have gotten almost nothing in return,” T.J. Rohr, a Lenoir City Council member, said of the tax breaks. Many Lenoir residents are livid that their small businesses are not receiving the breaks that Google will enjoy. (more…)

search for : Google, Inc., Tar Heel State

Finding the right NC home mortgage loan provider is complicated enough, but when you buy a house from a builder who has an in-house lender, the complications multiply. The builder wants you to use his North Carolina lender, and will offer significant inducements to do so. This puts many buyers in a quandary as they realize that the inducements must be weighed against the likelihood that the builder’s lender will overcharge them. Offering inducements is legal if it is done properly. A builder cannot post a sale price of $290,000 and raise the price to $300,000 if a buyer insists on using his/her own lender.

In developing a strategy for dealing with a builder pushing an in-house loan provider, it is useful to know where the builder is coming from. He expects to make money on the lending operation, but the main reason for having a preferred lender is to provide assurance that home sales won’t fall through because of lack of financing. The builder wants to avoid investing significant marketing dollars in finding a buyer who then leaves him at the altar because his loan doesn’t come through. This won’t happen with his in-house lender because of some prior arrangement with the builder. While the arrangement can take many forms, the thrust of it is that in the event that a loan to a buyer can be closed only at a loss, the loan will nonetheless be made, since the profit margin on the house will more than cover it. (more…)

search for : NC home mortgage loan, North Carolina lender

For the American mortgage market, it could be the hottest buzzword of the year: suitability. That’s because Congress has a new top legislator for mortgage matters, Rep. Barney Frank, who believes that “you shouldn’t lend (home buyers or refinancers) more than they can afford to pay back, and you don’t lend them more than their house is worth.” Frank, a 14-term Massachusetts Democrat, is the new chairman of the House Financial Services Committee — the primary originator of banking and mortgage-related federal legislation. In an interview, he made it clear that a top priority this year will be enactment of a nationwide lending-standards law designed to protect consumers from deceptive, unfair and predatory mortgage practices.

With foreclosures rising and many credit-stressed homeowners facing imminent rate resets on controversial “payment-option” and other adjustable-rate loans, pressure is building on Capitol Hill for tougher rules for mortgage brokers and lenders. A recent study by the Center for Responsible Lending predicted that as many as 1 of every 5 subprime borrowers who took out reduced-payment, low-documentation mortgages between 1998 and mid-2006 could ultimately lose their homes because of steep payment increases and penalties they can’t handle. Proponents of a suitability standard would require loan officers — whether mortgage brokers or retail lenders — to make certain that applicants are financially capable of handling a particular loan before and after payment increases, and that they fully understand the cons as well as the pros of the mortgage type they select. (more…)

search for : Barney Frank, refinancers, House Financial Services Committee, nationwide lending-standards law, mortgage brokers

Do you have any ideas on how to clean my Cadet baseboard heaters? When I first turn them on for the winter, I get a black film on the wall above the heater. What should I do?

What’s probably happening is that during the time the heater is off, dust or other material is accumulating inside the unit. When the heater is turned on in winter, this material burns off and streaks the wall.

First of all, try to minimize the dust buildup. This might be done by rearranging furniture, increasing fresh air in the room, or increasing air flow in front of the heaters. Then, prior to starting the heater in the winter, make sure it’s clean. For their baseboard heaters, Cadet recommends that you remove the front cover, and use a vacuum to clean out the inside of the heater before starting it for the season. Be sure the power is off before removing the front cover, and be careful not to damage the aluminum fins inside the heater. (more…)

Research from Coldwell Banker Howard Perry and Walston shows the real estate market in North Carolina continues to perform well and is expected to stay strong. According to industry estimates, 2006 will be the third-best year on record for home sales, with an all-time high inventory of homes for sale on the market and interest rates comparable to 40-year lows, offering buyers a broad range of affordable choices at present. For those already owning homes, the national median price of houses purchased 10 years ago has increased 88 percent.

The number of U.S. households is expected to increase 15 percent during the next decade, creating a continued high demand for housing. In terms of its own business, Coldwell Banker Howard Perry and Walston found that of all the visitors in October to its Web site (http://www.hpw.com), 30 percent were out-of-state buyers. Included among those visitors were international as well as national customers, indicating worldwide interest from people to purchase a home in North Carolina. Coldwell Banker Howard Perry and Walston has the state’s number one real estate Web site. (more…)

search for : real estate market in North Carolina