What Can You Buy for $200,000 near Wilmington NC? Part 1: Carolina Beach

What's for Sale for $200,000 in Carolina Beach?

                                                                                       Carolina Beach Harbor

       I recently saw a blog showing what kind of home you can buy for $200,000 in each of the 50 states. There was one home featured for each state. I thought that was kind of silly since there would be vast differences between what $200,000 might get you in, say, an economically depressed rural area compared to an affluent urban neighborhood in any particular state.  Silly... but I still looked at all 50 photos!
       It did get me thinking. As a real estate agent operating in the Wilmington NC area, I know there are areas here where you can buy a nice home for $200,000 (although the inventory is tight for homes in that range and under).  In some other locations (like Landfall or Wrightsville Beach) you aren't likely to find anything at all at that price.  I decided I would do a series of posts examining different neighborhoods in and around Wilmington and show you what you can buy for $200,000 here.  I'd love some feedback.  Are you pleasantly surprised? or disappointed with what's available at that price?
        Since so many people who consider moving to the SE Coast of North Carolina are thinking about the beach lifestyle, I'm starting with the Carolina Beach/Kure Beach/Ft Fisher area -- aka Pleasure Island.  This is a vibrant, family-friendly beach community south of Wilmington that combines small, traditional beach cottages, new-construction luxury homes and ocean-front condos.  There is a significant population of full-time residents as well as an abundance of vacation rentals. The town of Carolina Beach has a bustling boardwalk, downtown and harbor area, as well as quieter communities a few blocks from the water.   Lovely Kure Beach, just south of Carolina Beach, boasts the oldest fishing pier on the Atlantic Coast.  This is considered a quieter, more sedate community than Carolina Beach -- but the residents still sure know how to have fun.  (Just ask me about the annual neighborhood shaving cream fight!) An added bonus for homeowners is that much of the town of Kure Beach is above the flood zone.  A little further south is the Ft Fisher State Recreation Area, where you can enjoy a beautiful undeveloped beach, the Ft Fisher History Museum, or the NC Aquarium.  From the southern tip of Ft Fisher, you can take the ferry to the historic town of Southport.
        There are lots of great reasons to live or vacation on Pleasure Island.  Now, here's a sampling of what you can buy for $200,000.  Although occasionally an older, small cottage may become available, most properties at this price point will be condominiums.  Click on the links below for all the details.    And give me a call if you'd like to see these or other properties for sale on Pleasure Island!

Condo overlooking Otter Creek Yacht Club

2-bedroom Condo across the street from beach access

3-bedroom mid-town Condo

Condo with views of Carolina Beach Yacht Basin

Written by Mary Lynn Blake, Realtor, Coldwell Banker Sea Coast Advantage
Wilmington and Carolina Beach, North Carolina

Financing a Multifamily Home -- Yes, You Can!

Lisa Prevost, writing for The New York Times, said this all so well I just wanted to share her article.  This is great info -- and it may just tip you toward buying this charming duplex in the Historic District of Wilmington NC.  

 413 Church St., Wilmington NC$249,000MLS# 529904






Video - 413 Church









REAL ESTATE

Financing a Multifamily  Home 

Mortgages

By  LISA PREVOST DEC. 11, 2015

Photo

CreditThe New York Times 

For buyers willing to take on the role of landlord, multifamily properties can be one of the more affordable ways into pricey housing markets.

On both conventional Fannie May loans and loans backed by the Federal Housing Administration, a portion of the anticipated rental income can be added onto the borrower’s income at application, “which helps people qualify for more house than they normally would,” said John Prom, a branch manager for HomeBridge Financial Services in Manhattan, which does a high volume of multifamily loans in the other boroughs.

The loans are available for owner-occupied properties with two, three or four units. Properties larger than that would require a commercial loan.

Seventy-five percent of the estimated market rent to be generated from the property, as determined by an appraiser, is added to the borrower’s income, Mr. Prom said. His typical clients for these loans are first-time buyers and midlevel earners, like police officers and teachers.

“They live in one unit for a while, and when the property goes up in value down the road, they sell and move, or rent out their unit and buy something else,” he said.

On F.H.A. loans, borrowers can put as little as 3.5 percent down, but on three- and four-families, the loan must be “self-sufficient.” This means that the adjusted rent total must be enough on its own to cover the monthly mortgage, including principal, interest, taxes and insurance, said John Walsh, the president of Total Mortgage Services of Milford, Conn.

The minimum down payment on conventional loans is usually 15 percent for two-unit properties, and 25 percent for those with three or four units, he said.

Freddie Mac’s "Home Possible"program does allow lower down payments of 5 percent on a duplex and 10 percent on three- and four-families for income-qualified borrowers, Mr. Walsh said. Borrowers’ income may not exceed 100 percent of the area median income.

Mr. Walsh emphasized that many lenders place overlays, or additional restrictions, on multifamily loans that make it harder for first-time buyers to qualify. Some won’t add rental income onto the borrower’s qualifying income if the rental units are vacant or the buyer has no experience as a landlord, he said.

“It has lightened up a lot as the market has improved, but there are still a lot of lenders who have these overlays,” he said. He suggested that buyers who are turned down by one lender try again with ones that specialize in these loans.

The reserve requirements are higher on multifamily loans, said Michael McHugh, the senior vice president for retail lending at Freedom Mortgage in Melville, N.Y. Lenders may require that the borrower have as much as six months’ worth of mortgage payments in the bank, depending on how much money the buyer is putting down and other factors affecting the riskiness of the loan.

Interest rates are fairly consistent with single-family loans, typically around an eighth of a point higher on a three- or four-family, he said. The conventional loan limits on multifamily properties vary by geographical region. In the metropolitan New York area, the limits are $800,775 for a duplex; $967,950 for a three-family; and $1,202,925 for a four-family.

While multifamilies can be a good entry point for first-time buyers, Mr. McHugh cautioned that buyers without landlord experience should think twice before taking on a property with three or four units.

“The rental market is not that easy,” he said. “Sometimes being a landlord is not all that it’s cracked up to be, speaking from personal experience.”

Wilmington's Best Holiday Lights

Want to know where to find fun, fanciful and festive holiday lights in the Wilmington area?

If you're anything like my family, some time between now and Christmas you'll be driving through the neighborhoods to look for the best Christmas light decorations.  Here's a great website that will help you find those enterprising homeowners who love to light up their homes.

Wilmington Christmas Lights website

Question and Answer Time! Down Payments

"How much down payment will I need?" I heard this question again yesterday.  I get it a lot.

The short answer is, it depends. Of course, if you're asking, then you probably prefer the long answer.

It depends on the type of property you're trying to buy, the value of the home, your credit scores, and the type of loan you want and for which you can qualify.  Are you buying an investment property?  A lender will probably require 20-30% down.  A primary residence you'll live in?  Typically you'll need 5 to 20% for a conventional loan.  In 2014, one in five borrowers paid less than 10% down for a conventional loan.  There are, however, some popular lower-down-payment, non-conventional alternatives.  A common alternative is a loan backed by the Federal Housing Administration (FHA), which requires only 3.5% down.  If you meet their eligibility requirements, a Veteran's Administration (VA) loan requires NO money down.  If you are purchasing a home in a rural area, and meet other US Department of Agriculture (USDA) requirements, USDA also offers a no-money-down loan.

Home buyers can also check out down payment assistance programs, such as that offered by the North Carolina Home Finance Agency.  If you qualify, you my be able to obtain an interest-free, potentially forgivable second mortgage up to 5% of the first mortgage loan amount.  Check out the NCHFA website at www.nchfa.com.  (I highly recommend first-time home buyers also look at the NCHFA Mortgage Credit Certificate as another source of potential savings!)

Keep in mind that with most loans, if you want to avoid paying for Private Mortgage Insurance (PMI), you may need to pay 20% down. PMI protects the lender in case a borrower defaults.  Depending on credit scores and interest rates, the PMI typically runs $30-$70 per month for every $100,000.  On a conventional loan, this monthly PMI payment goes away when the loan-to-value (LTV) ratio hits 80%.  (In other words, if you bought a home worth $100,000, paid $10,000 down, and took out a loan for $90,000, the LTV ratio would be 90%.  When your loan principal has been paid down to $80,000, the LTV would be 80%.)   VA and FHA also have mortgage insurance payments for their loans, but these payments last for the life of the loan; they never go away.

Bottom line:  As soon as you become interested in buying a home, your first step should be to sit down with a mortgage broker.  (Let me know if you need a recommendation.  I know some good ones!)  A good mortgage broker will help you understand what your best options are, and what you need to know before you even start looking for your dream home -- like how much you can realistically afford and what to save for a down payment.


The Cost of Paying PMI vs the Cost of Waiting to Buy

  

Understanding TRID - what you need to know

Are you familiar with the change that occurred in the world of real estate and mortgage lending starting October 3, 2015? If you apply for a mortgage loan after October 3, this change -- the implementation of TRID -- will apply to you. For both buyers and sellers, it's important to understand not just the new documents introduced by TRID, but how new timelines set by TRID could impact your closings.  

TRID is an acronym for Truth-in-Lending Act/RESPA Integrated Disclosures. It has a worthy purpose -- to make loan documentation easier to understand for the consumer, less cumbersome and more transparent. There may be a few potential hiccups, however.

TRID replaces the “Good Faith” and “Truth In Lending” documents previously issued by lenders with a new document called a “Loan Estimate.” The Loan Estimate is easier to read and is probably an improvement over the old documents. Under the new guidelines, lenders must provide a potential borrower with the Loan Estimate no later than three days after he/she submits a loan application.

The other document TRID requires, and that is the cause for some concern, is the Closing Disclosure. This document replaces and combines the HUD-1 and other closing statements in a format intended to be easier to understand. Borrowers must receive this Closing Disclosure three business days (Saturdays and Sundays not included) before they can sign loan documents at the closing. This gives the borrow a chance to thoroughly review this document before the closing. Previously, the HUD-1 only needed to be in the hands of he borrower the day before the closing.

Because every number on the Closing Disclosure must be accurate, lenders will need to have loan documents in title three business days sooner than they do now. This also puts pressure on title companies/real estate attorneys to get the title work done earlier. If there is any error discovered in the numbers in the Closing Disclosure, the Closing Disclosure must be re-drawn and the three-day waiting period starts all over. Under TRID guidelines, any delay in closing becomes at least a three-day delay. A buyer who had hoped to move in immediately after the initially planned closing will need to have an alternative plan to accommodate a delay.

It's also worth noting that it is unlikely a client hoping to do same day closings on their home for sale and a new home purchase will be able to do this under these new guidelines.  It may be possible, but is not likely.  As a real estate agent, I'm preparing my clients for the fact they need to plan about a week contingency in between closings.

Below is the link to an article from one of my favorite real estate investment website, BiggerPockets.com, with useful additional information about TRID.

http://www.biggerpock...­

If you have additional questions about TRID, call or drop me a note.

Cheers

Mary Lynn Blake