Jim Allen Group | Raleigh Real Estate Blog » Raleigh Home Buyer Tips

The Simple Facts About Getting Pre-Appoved for a Home Loan

Monique — Wed, 25 Apr 2012 19:14:25 +0000

If the last seven years haven’t shown us what over-spending can do to an economy, I don’t think anything will. The economy and the real estate market has seen better days but luckily, the real estate market has shown a steady growth that will hopefully continue. Think back to 2000 – 2003 when home prices started to rapidly increase and then over the next few years, they skyrocketed and buyers where offering far more than the asking price of a home. We can now look at this situation and conclude that many of these buyers where over-paying and over-spending. Today, many of those homeowners have experienced a painful realization that they cannot afford the home and sadly, many of them have lost those homes.

Don’t let yourself ignore the important lesson of knowing what you “can afford” when buying a new home. That is why getting pre-approved through a bank, credit union or mortgage broker is not only a good idea, but a great idea. Knowing what you can afford before you start looking at homes will allow you to search in your price range and not fall in love with a home that you can’t purchase. At The Jim Allen Group, we recommend pre-approval to our clients so that they not only learn what they can afford, but to also get a better idea of their credit score and if there are credit issues that need fixing prior to making a home purchase.

What is the Difference between Pre-approval and Pre-qualification?

You may hear the terms pre-approval and pre-qualification and think they are they same, however, they vastly differ. Pre-qualification is different from pre-approval because a lender typically will not review your credit report when pre-qualifying. Thus, pre-approval provides better bargaining power since it is a solid commitment from the lender on what they will loan you, rather than an estimate. One important fact is that there may be a fee associated with pre-approval so be sure to ask in advance. Also inquire as to whether you have to pay the fee in the event your application is denied.

The Pre-Approval Process

If you are considering purchasing a home, it is a wise decision to get pre-approved. Ask others whom have already gone through the home buying process for recommendations of a lender or if you are working with a real estate agent, they may have some great resources to consider. You don’t have to go with the first lender you talk with. Shop around as many lenders offer different loan terms and its important that you are comfortable with whomever you choose.

Each lender has specific requirements on what you need however, most likely they will ask for the following items to complete the process:

1. Proof of Income: pay stubs for the past 3 months and your most recent W-2 Tax form; if you are self-employed you may need your tax returns from the past 2 years, business-related receipts and invoices, financial statements and a copy of your business license (if applicable).

2. List of Assets: material possessions such as a home, car, boat or large ticket items and liquid assets such as cash, stocks and bonds. If you have loans associated with these items, its important to provide the details (lender, account #’s, amount).

3. Bank Statements: recent bank statements to verify that you have available money for a down payment, and to ensure the absence of large deposits from non-employment sources such as gifts or loans (from friends or family members). You will most likely be required to bring bank statements from up to the last six months showing deposits, withdrawals and consistent transactions of funds.

4. Credit Report: the lender will get approval from you to pull your credit report/s. These reports will include your FICO score which will provide the lender an idea of your credit history and your credit risk. Your credit score is important as higher numbers will deliver better loan terms (lower interests rate). Review these reports to determine if there are any inaccurate details and if necessary, get these fixed to improve your score.

Once all the appropriate information is submitted, the lender will be able to determine how much they are “willing” to lend you. The rule of thumb for determining what you can afford to borrow is based on your debt-to-income ration (what you owe and how much you make) and taking into account your credit history and also your down payment. Lenders will then give you a pre-approval letter based on how much they are willing to lend you and that provides a buyer the knowledge that you have the funds available to purchase their home. Also important to know is how long the pre-approval letter is good for. Typically they are good for 90 – 120 days which means, you can safely purchase a home within the determined time frame without having to go through the process again. Each lender may have a different scenario, so always get the facts.

What’s Next?

With pre-approval in hand, you can now enjoy your home search knowing exactly what you can afford without over-spending! With home prices more realistic and interest rates at historical lows, you should be comfortable with your decision for years to come!

Triangle Real Estate Recovery is Underway

Monique — Mon, 16 Apr 2012 13:24:01 +0000

Buyers thinking they can underbid may be running out of time as the housing market recovers in the Triangle, according to Jim Allen of The Jim Allen Group.

Allen says sales of new construction are returning to pre-recession paces. With the last several months showing impressive signs of a recovery, inventory levels lower than they have been in years and interest rates still historically low, the real estate market is more of a “Sellers-Market” than the “Buyers-Market” of the past several years.

Check out the interview with Jim Allen and Jeremy Salemson, CEO of Corporate Investors Mortgage Group on WRAL.com.

What Are Your Thoughts About the Direction of the Raleigh Real Estate Market?

Leave a comment below and tell us what you think.

What Does a Credit Score Mean to a New Home Buyer?

Monique — Thu, 29 Mar 2012 21:31:11 +0000

If you watch television, listen to the radio or read magazines, you have experienced the influx of communication that puts emphasis on your credit score. This number has been called your Financial “Cholesterol” Score as it has a direct effect on the “health” of your financial stability, including getting credit (loans). So what does all this mean? What is your Credit Score and how does it impact your ability to get credit? Here is some information that might help you understand your Good Score (HDL) and your Bad Score (LDL).

A Credit Score Summarizes Your Credit Risk

Your Credit Score helps lenders determine your risk as a potential client. This score influences the amount of money that is available to you and the terms (interest rate) that lenders will offer you. It’s an important part of your “credit health.” The higher the score, the better you are. High scores can mean lower interest rates.

How a Credit Score is Determined

Your credit score is a number that is calculated by a mathematical algorithm, or formula that is based on information from credit reports. Your credit report is compared to tens of millions of other people to determine your score. This score is a highly accurate forecasting of how likely you are to pay your bills on-time.

What a Credit Score or Number Means

As stated, the higher the number or score, the better you look to a lender. Lenders can use several different methods to determine your financial health and the FICO score is the most popular method. FICO uses advanced math and analytics, and works with the top credit reporting agencies: Equifax, Experian and TransUnion to determine your score. Scores can fluctuate based on changes in your “financial status” such as paying bills late, making a large ticket purchase or even applying for a loan or credit card.

The FICO Score is a scale that runs from 300 to 850 based on the mathematical calculations determined. Here is an approximate breakdown of how it is determined:

35 Percent is based on your payment history. Paying bills late has a negative impact.
30 Percent is based on outstanding dept. How much you owe (credit cards, loans) and how much available credit do you have available to you. Having lots of credit cards (even if the balance is zero) with high limits will result with a lower score.
15 Percent is based on the length of time you have had credit. Showing a longer credit history provides a better forecast of financial credibility.
10 Percent is based on new credit. Opening new credit accounts will effect negatively. This category also penalizes hard inquiries such as applying for a loan or credit card.
10 Percent is based on the types of credit you currently have. If you have several different kinds of credit such as an auto loan, school loan, credit cards and personal loan – you have a more favorable score (especially if you have a history of making payments on time or paying off the loan).

The vast majority of people fall in the range of a credit score between 600 to 800. A score of 720 or higher will get you the best interest rates. Having a credit score below 500 will have a major impact on your ability to secure a mortgage loan. Although your score has an impact on your ability to secure a loan, remember that there are other factors that will also influence the interest rate. These include things such as the type of property you are purchasing (rental, vacation, new home), how much of a down payment you have, and the value or worth of the home compared to the amount of the loan needed.

What Does this Mean to a Home Buyer?

Your credit score has a direct impact on your ability to secure a mortgage, what interest rate you will receive and how much money you can borrow, as well as, how much money will you need to put down. A good example of what this means to a home buyer, is the long-term savings in interest payments over the course of a $100,000 loan with a 30-year mortgage for someone with a 520 score compared to someone with a 720 credit score. The person with the 520 score will pay more than $110,325.00 in interest charges and the have a monthly mortgage payment that is $307.00 higher than the 720 credit score candidate.

Improving Your Credit Score

Thankfully, you have the ability to improve your credit score so that you have better opportunities for lower interest rates and long-term financial savings. First, it’s important to find out your credit score and you are entitled by law to a free credit report once every 12 months. It’s a good idea to take advantage of this opportunity, especially if you plan to apply for a mortgage soon. You can see it by going to AnnualCreditReport.com. If you are considering making a home purchase, the sooner you know your credit score, the sooner you will be able to start making improvements, if needed or getting pre-qualified.

Here are things you can do to try and improve your credit score:

Review your credit report and correct any errors found. Getting rid of errors that are mistakenly listed on your report can dramatically improve your score.
Keep old credit accounts that show good payment history. Creditors look at the limit ratio (debt to credit) and the average age of your accounts.
Reduce your balances on credit cards to 75% or less of your available credit (the lower the better).
Pay your bills on time. This may take time to raise your score but consistency will show and add value.
Don’t let anyone make an inquiry on your credit report unless you have to. Most inquiries will lower your score – if you are shopping for a loan, make sure you have multiple inquiries to that you can show your intention and it will count as one inquiry.
If you are planning on applying for a mortgage (large sum), don’t open new credit accounts to increase your available credit in hopes of raising your score. Opening new accounts will have a negative impact as it may show you are over-extending yourself.

If you are considering a new home purchase, The Jim Allen Group has over 300 years of combined real estate experience and can assist you in the entire transaction. We can help you with the pre-qualification process, finding the perfect home and if you have a home to sell, getting the best price for your home.

Fall in Love… With Ashton Meadows in Youngsville, NC

Monique — Tue, 14 Feb 2012 18:20:52 +0000

The Jim Allen Group hosted a luncheon event at Ashton Meadows to showcase this new Youngsville community developed and built by Award Winning Satterwhite Construction, Inc. The event was appropriately themed “Fall in Love… with Ashton Meadows” for Valentines. Over 60 Real Estate professionals attended the event and had the opportunity to tour 3 beautiful properties, enjoy a delicious lunch and enter for a chance to win a romantic dinner for two at Angus Barn and other cash prizes.

Ashton Meadows is nestled among mature landscapes, rolling hills and two community ponds which provide amazing water views. These craftsman style custom homes from the mid $200’s feature impressive details such as hardwoods in the main living areas, gourmet kitchens with custom cabinets, granite counter tops, SS appliances, open floor plans, screened porches, first-floor master options, 2 and 3-car garages and additional unfinished storage space that provides future expansion possibilities. The craftsmanship is evident throughout these homes with crown molding, coffered ceilings, trey ceilings, custom built-ins, unique tile work and fully landscaped yards. Ashton Meadows is only minutes to US-1/Capital Blvd., convenient to shopping, schools, and town services.

After touring the 3 homes, attendees submitted entries to a drawing for a romantic dinner for two at Angus Barn plus additional cash prizes; Marcella Ellis with Keller Williams Realty won the grand prize and cash prize winners included: Colleen O’Keefe – Coldwell Banker HPW, Luis Turner – Youngsville Realty, Phyllis Moy – Coldwell Banker HPW and Ann Marie Della Morte – Youngsville Realty.

The 3 new homes included:

You can visit Ashton Meadows by taking US-1 N/Capital Blvd. through Wake Forest, Cross Hwy 98; Turn Right on Holden Road (@ Sheetz); Drive through Youngsville town center; Left on Cedar Creek Road; Right on Hill Road; Left into community. You will be impressed by the large lot sizes, and the uniqueness of each of the homes. An on-site agent is available Saturday and Sunday from 1 – 5 PM.

Despite What You May Think, The Wake County Real Estate Market Is Growing

Monique — Wed, 11 Jan 2012 18:20:03 +0000

Every day we are inundated by troubling economic facts and figures from our friends, co-workers and the media. It’s no wonder that when we hear good news, we question its validity. Well, the good news is that there are numerous signs that the Wake County Real Estate market is growing and its not just a “Buyers” market, but a “Seller’s” market too. No matter what you’ve heard, what you’ve read or what you think, the real estate market in Wake county and surrounding communities is not only on the rise, but positioned for some double digit increases! 2011 delivered a 30% growth to our (The Jim Allen Group) business and much of that was due in part to new home construction in Wake County. As the market has evolved and experienced some saturation of inventory, decrease in market value and the unfortunate short-sales, foreclosures and drastic price reductions, The Jim Allen Group has been able to leverage our experience and understanding of a highly volatile market to stay abreast of these changes. Based on data taken directly from TMLS (Triangle Multiple Listing Services) over the last few years (since 2006), total closed home sales saw its largest decrease from 2007 to 2008 with a 28% decrease across the Triangle. Since then, the decrease has considerably lowered from 15% between 2008 & 2009; 7% between 2009 & 2010 and only a 3% decrease from 2010 to 2011. If the trend continues, we should be at an even pace or possibly an increase for 2012.

TLMS Data of Closed Home Sales by Month and Year from 2007 to 2011

The graph to the left reveals that June is historically the busiest month (with the exception of 2009 where July had 50 more sales) and January is the slowest, with a few exceptions. Even at the peak of home sales in 2006, it is the inventory levels that drive sales and home prices. An abundance of inventory provides for a buyers market and likewise for a sellers market with not enough inventory. We may not see the number of homes sales on a monthly or yearly basis of 2006 or 2007 however, based on current inventory levels and market activity, we will see that the decline of sales will level off and show much improvement. This will provide for a healthier market where home prices will remain steady. Note that in the last 6 months of 2011, there has been constant growth in home transactions as compared to 2010. All but December has produced double digit increases. This is the bright spot in a gloomy market. I believe this trend will continue and our activity in the first weeks of January are showing positive results.

The next graph shows just the closed transactions for Wake County. Similar to the pattern of all of Triangle transactions, the largest decline was between 2007 & 2008. Also important is that the same growth over the past 6 months shows double digit increases with the exception of December which posted an 8% gain.

As the growth of Wake County continues to prosper and the market begins to rebound, it is important to understand inventory levels. Inventory levels pertain to the number of available homes in the specific markets (new construction vs. re-sale) and price points. Any price point that has an inventory of under 5 months is an Extreme Seller’s Market. Any price point that has an inventory of 5+ to 8 months supply is a Good Seller’s Market. Any price point that has an inventory greater than 8 months is a Buyer’s Market. Currently, in Wake County much of the landscape is a Seller’s market with only the price range of $475,ooo to $500,000 of Re-Sales Listings showing a 10.5 month inventory. So, next time you hear that the real estate market in weak – look at the facts and figures and know that growth is happening. Get ready for a HOT spring market in Wake County and surrounding communities. Here at The Jim Allen Group, optimism is abundant and we are excited about the new year and selling some houses!

Wake County Transactions based on Monthly and Yearly Activity since 2006. Data from TMLS

Wake Forest, Area 14 - Inventory Levels by Price Point & Type

The Jim Allen Group is Proud to be a Partner with Foxwood Builders, Inc., one of the first Indoor airPLUS Builder in the NC Area

Monique — Thu, 27 Oct 2011 17:33:00 +0000

A Healthy Home is a Happy Home

What makes a neighborhood successful? Some will say its location and others may say it’s the price point, the amenities and the builder/developer reputation. Although all reasons are valid, the reputation of the builder/s and developer are an important aspect not only from the buyers’ perspective, but that of the Realtor. No Realtor wants to sell a home to a client when the builder or developer, do not meet their high standards.

At The Jim Allen Group, we represent over 30 neighborhoods and we believe our best asset is our builders. We work with some of the finest in the area and know that it’s the high quality and high standards that our building partners possess that make our communities so successful.

In two of our neighborhoods, Hawthorne located in Creedmoor and Majestic Oaks in Wake Forest, we have a great relationship with one such builder who exemplifies high standards. Not only do they build a great home, but they are one of the first in the area to be an Indoor airPLUS certified home builder.

Foxwood Builders, Inc. has committed to building and promoting Indoor airPLUS qualified homes that provide homeowners with improved indoor air quality. The Indoor airPLUS Program is a partnership between EPA, home builders and other industry allies, to improve indoor air quality in new homes.

Indoor airPlus qualified homes are healthier by design and independently verified to meet strict construction specifications, through more than 30 additional home design and construction features. These features help to protect homeowners by reducing contaminants that lead to poor indoor air quality.

Elizabeth Ruzzier, President of Foxwood Builders states: “We feel that building beautiful homes with great floor plans is not enough. We want our customers and their families to live in a healthier home as well”.

Indoor airPLUS qualified homes offer homebuyers the standard features of a new home, plus moisture control, radon control, pest barriers, improved heating, ventilation and air conditioning (HVAC) systems, combustion pollutant control, low emission materials and third party verification. All Indoor airPLUS qualified homes also meet guidelines for energy efficiency set by ENERGY STAR®, the nationally recognized symbol for energy efficiency.

After purchasing a home with the Indoor airPLUS label, owners receive a checklist of verified indoor air quality features, and instructions for operating and maintaining equipment to continue minimizing risks of indoor air quality problems.

What’s in Your Paint…That is NOT just Color?

Monique — Wed, 26 Oct 2011 19:38:36 +0000

You know how gas has a strong odor and you either hate it or like it? Well, think about the smell of paint. Do you know what those odors are or how harmful they are to you? These familiar odors originate from Volatile Organic Compounds, commonly known as VOCs. VOCs and other chemicals that are in paints, stains and finishes can cause short term health problems such as headaches, dizziness, nausea, allergic reactions and sore throats. They have even been linked to long term problems like cancer.

The good news is that there is an alternative to these harmful compounds in paints. You may have heard or seen Low or No VOC paints. Even among these variations,there is a large classification of each. Here is some helpful information on the types of Low- or No- VOC paints.

Low- and No-VOC

Low-VOC paints will have a reduced amount of VOCs in the paint base. The paint base is the tintable base that is regulated with these classifications. No-VOC paints will contain no regulated VOC in the tint base. All your major manufacturers carry Low- VOC paints and the majority of them also carry No-VOC paints.

This classification of Low or No, is a federal regulation that applies to VOCs in paint and only covers VOCs that contribute to the formation of smog. There are other VOCs in the paint base but this depends on the manufacturer. Also tinting the base can add VOCs to the paint because the pigments used to tint the base may be dissolved in solvents that contain VOCs. The deeper the tint the more VOCs that paint will contain. To avoid the tinting pigments from adding VOCs to your no-VOC paint, you can seek out companies that use zero-VOC colorants.

Zero VOC

Recently, there is an added classification with Zero-VOC paints. The zero-VOC paints contain none of these chemicals and are considered non-toxic. These paints are a great choice for individuals that have multiple chemical sensitivity (MCS) or facilities such as hospitals that may contain individuals that do. There are several companies that produce zero-VOC paints and you should be able to easily track them down online or at most paint stores.

Painting with these paints

These paints apply like any other paint and clean up with water and come in a wide variety of colors and finishes just like conventional paints. The only difference is that the dry times may be slightly longer, especially with deeper tints. You may want to allow a little longer drying time between coats for the darker tints to allow for a quicker overall dry time. Check the label or ask your sales associated for estimated times.

The major advantage is that these Lo, No and Zero-VOC paints don’t provide you with the harmful chemicals that are associated with conventional paints. In addition, you will notice that there is almost NO odor present.

If you are in the process of painting within your home, you may want to consider the health and sustainability of your paint choices. Do your homework, ask questions and if necessary, seek professional advise. Your health and the health of your family is worth the added time and expense.

Majestic Oaks ROCKS the House with 3 GOLD Winners!

Monique — Wed, 12 Oct 2011 17:14:48 +0000

Last night was the Wake County Parade of Homes Awards Banquet at the North Hills Country Club and it was a packed house! With 17 categories and over 200 entries, the evening was full of excitement! The Jim Allen Group and our builder team filled 4 tables and enjoyed the evenings festivities.

The neighborhood of Majestic Oaks located off Rogers Road in Wake Forest took 3 Gold Medals and had 1 Perfect Score! This fabulous community boast an award winning builder team and offers custom homes from the $300′s. There are 8 parade homes in Majestic Oaks and they are:

5637 Clearsprings Drive, Lot #25 - Built by Valenti Homes – GOLD WINNER with 1 Perfect Score
4105 Field Oak Drive, Lot #47 – Built by Cambridge Classic Homes, Inc – GOLD WINNER
4208 Field Oak Drive, Lot #28 – Built by Pinnacle Home Builders & Construction – GOLD WINNER
5700 Clearsprings Drive, Lot #3 – Built by Imperial Custom Homes
4209 Field Oak Drive, Lot #57 – Built by Sawyer Homes, Inc.
4128 Field Oak Drive, Lot #32 - Built by Valenti Homes
4108 Field Oak Drive, Lot #37 – Built by Foxwood Builders, Inc.
4112 Field Oak Drive, Lot #36 – Built by Stellar Blu Construction, Inc.

This next weekend (October 14-14-16) is the final weekend of both the Wake County and Tri-County Parades. If you haven’t had the opportunity to check out some of the amazing communities and homes available, I encourage you to do so. The weather is perfect to head out and tour these impressive properties that offer unique design trends, high-end technology and energy efficiencies, custom styles and floor plans that will all peak your interests.

Parade of Homes Basket Winner!

Monique — Tue, 04 Oct 2011 17:39:55 +0000

The Wake County Parade of Homes opened last weekend and in recognition of the event, we had a special giveaway at one of our parade homes. Our very own agent, Azuca Spicer put together a beautiful basket filled with $175 worth of Mary Kay products that was available for visitors to enter into a drawing.
Pictured here is Bonnie Mwanda – the lucky winner! She and her husband toured several of the parade homes in Majestic Oaks in Wake Forest looking for new homes and neighborhoods.
Next weekend, Azuca will be having a drawing for similar baskets at the neighborhood of Stowecroft in Raleigh. If your heading out to view homes, make sure you stop by Stowecroft and say hello to Azuca and enter your chance to win a gift basket full of Mary Kay products!

The Jim Allen Group and Our Builder Team Rock the Tri-County Parade of Homes

Monique — Fri, 30 Sep 2011 19:15:17 +0000

Tri-County Parade of Homes Builder Team

The Tri-County Parade of Homes encompasses Franklin, Granville and Vance counties and runs until the 15th of October. This year the parade had 35 entries and The Jim Allen Group represented 17 of those. The neighborhoods include: Ashton Meadows, Hawthorne, Rivers Edge, Stoneridge, Winston Ridge, Woodcroft and Woodford. The custom builders of these fine homes are partners with The Jim Allen Group and are among the finest in the area.

On Wednesday night, there was a banquet held at Green Hill Country Club in Louisburg where all winners were announced. There where 8 categories determined by price point and within each category, a Gold, Silver and Bronze Award was given. We are thrilled to announce that a majority of our of our 17 entries won an award!

We serve the finest group of new home builders and appreciate the opportunity to partner with such outstanding group! Here is a list of our building partners:
Lawrence Homes, McDuffie Custom Homes, Pinnacle Custom Homes, Foxwood Builders, Inc., Sumner Construction, Satterwhite Construction, NRV Homes, LLC, Grayson Homes, MBC Homes LLC, Brandywine Homes, Grant Construction, Inc., Sawyer Homes, Matt Baldwin Homes, LLC, Ross Construction and Imperial Custom Homes.

HAWTHORNE: 681 Juliette Court, Lot # 118 Built by Pinnacle Custom Homes

ASHTON MEADOWS: 80 Cranbrooke Drive, Lot #20 Built by Satterwhite Construction

STONERIDGE: 145 Siltstone Drive, Lot 62 Built by Grayson Homes

WOODFORD: 20 Banbury Road, Lot #17 Built by Ross Construction

HAWTHORNE: 3047 East Bay Court, Lot #128 Built by Sumner Construction

RIVERS EDGE: 220 Rivers Edge Drive, Lot #56 Built by NRV Homes, LLC

WINSTON RIDGE: 280 Plantation Drive, Lot #10 Built by MBC Homes, LLC

WINSTON RIDGE: 236 Plantation Drive, Lot #96 Built by Sumner Construction, Inc.

WOODFORD: 65 Middleton Drive, Lot #48 Built by Imperial Custom Homes

HAWTHORNE: 669 Albin Place, Lot # 26 Built by Lawrence Homes

HAWTHORNE: 3042 East Bay Court, Lot #116 Built by McDuffie Custom Homes

WOODCROFT: 20 Ardmore Court, Lot #242 Built by Sawyer Homes, Inc.