Unbelievable interest rates are about 4.35%, never have they been this low! As a home buyer you have an unprecedented opportunity, but only for a limited time!

With interest rates around 4.35% you can now purchase 20% more home than you could last year, but this offer will expire soon!  
If last year you could only afford a townhouse at $180,000 you can get a single family detached home for the same monthly payment, priced around $220,000! That 20% increase in buying power just gave you 500 sq ft of additional living space, a large fenced in backyard, a garage, larger bedrooms and more closet space.  But if you wait you'll miss out on this opportunity.

 You can almost consider this another HOME BUYERS CREDIT in away.  The Government is
 keeping interest rates artificially low.  As a result instead of receiving up to $8,000 back you get
the full 20% to purchase the house! - but again it won't last long!

Eventually interest rates are going to increase, it will not be subtle, it will be quick, fast and dramatic, when this happens you'll know you have missed your opportunity.  Interest rates are likely to go beyond 6%, they will land somewhere around 8%.  And with every 1% of interest rate increase you lose 10% in buying power.  Should interest rates jump to 8% a 2% change from when you could purchase a $180,000 townhouse now you can afford a $145,000 one floor apartment with no garage, smaller rooms, no backyard of your own, limited parking. 

If you are looking to purchase a home in South Hampton roads you have time, but you need to call me today, this offer could be over tomorrow!

The General Rule of thumb:  For every 1% increase in the interest rate, you lose 10% in buying power!

Regardless of where I go, I talk to many people, while standing in the line at the local 7-11 to sitting at Starbucks.  If there is a person near me I strike up a conversation.  Generally we talk about real estate,  I am asked the same question over and over again "I can't buy because the banks aren't lending". 

The truth is simple, the banks have to lend, the only real product that the banks have to sell is cash, and they do it by making loans for houses and cars.  As we all know the rules have tightened up, buyers have to prove that they can make the payments, hold a job and put some of their own "skin" in the game, in the form of a a down payment.  But the banks are indeed lending. 

Allow me to show you an example of these loans 

In South Hampton roads there are 1,636 as of 9/14/2010 at 11:45am, that are under contract.  This means 1,636 home buyers found a loan to purchase their new home.  Just to illustrate this a little further year to date home sales in South Hampton Roads is just under 8,000! Here are an additional 8,000 home buyers who managed to borrow money from BANKS!  In 9 months and 14 days almost 9,636 home buyers have borrowed money from BANKS.

Here are 9,000 plus home owners who will be very happy in several years when their home values increase, and while they are living in the home they can change what ever they want without permission from their land lord.   Now if you decide to rent, instead of taking advantage of the opportunity that is presenting itself to you, you are going to pay more in the long run with higher interest rates, and higher home prices.  Remember:  those who buy today will sell to you tomorrow!

Last week the our local news paper, The Virginian-pilot, ran their lead story:  "Home Sales In Record Tumble"  So here I am again with information from our MLS ( Rein )

In January there were only 532 home sales, with an average sales price of $259K At the end of August we have had 687 home sales. With the slight but positive increase of 29% in our year to date sales, sales prices have increased by 8%.  The average 3 bedroom, 2 bath 2000 sq ft home in Virginia beach is selling for $280K up from $259K at the beginning of the year. 

So allow me to present a couple reasons you should be looking for a home YESTERDAY:

1. Interest rates are at the lowest we have ever seen them
2. Home prices appear appear to be trending up, giving you the ability to earn equity sooner than latter.
   

    

With the low interest rates and low prices you have a limited period of time to purchase your dream home now!  Consider this scenario:

In January you could have purchased your dream home for $259,000 at 6% with a monthly payment of $1552.  Spring ahead to September 2010, the same home is now available and will cost you $280,000 at only 4.35% your monthly payment is now only 1,390 a huge savings!
Now lets jump forward to January 2011, using our crystal ball.   Your dream home is now valued at $291,000, had you purchased it one year earlier you would have earned $32,000 in equity, or had you purchased in in September $11,000 in equity.  However, you waited and now you are paying $1,744 or $414 more per month even at the 4.35% interest rate!

 Get off the fence, what could you do with $414 extra in your pocket everymonth? 

The American dream, and the foundation of America is the ownership of real estate for over 200 years.  Originally property ownership was considered so important that only property owners could vote.  Even today, I meet people from other parts of the world who's goal it is to purchase a home in America. 

Even though real estate has suffered, so has the stock and bond market.  Real Estate offers what these other investment can not.   Real Estate is finite, the government can't make more of it!  Each parcel of real estate is unique, and as such it has real value.  This is evident 

According to research by MSN.com and Case Shiller between January 2000 and  May 31, 2010

• Down Jones down by 11.8 %
• S&P 500       down by 17.7%
• NasDaq down by 44.8%
• Real Estate UP BY 43.4%

Looking for a great start home?  Recently married, just starting off?  There a 78 homes for sale in Virginia Beach between 60K  to  $100K.  Imagine owning a home for less than renting one, and having the ability in a couple of years to turn it into a rental property, that is income producing!   It is time to take advantage of the low rates and the great deals that are out here.

First time home buyers, using an FHA loan need to have only a 3% down payment, a credit score of 620!

Take a look at some of the homes for sale in Virginia Beach:

 If you are moving to Virginia Beach, or looking for a reason to call Virginia beach home cosider these facts:

The median household income is $65,000 higher than the US Median household income of $55,000.  Homeowners enjoy a low real estate tax rate of .89 per $100 of assessed value, our real estate taxes do not weigh as heavily in acquiring a mortgage as they do in cities in New York.  

It is estimated that over 1 million people call Virginia Beach home, and almost 450,000 are permanent residents.   These residents enjoy the Virginia Beach boardwalk, exceptional jobs consider these distinctions:

- America's 29th Fastest Recovering City from the Recession - Forbes.com 

- Virginia Beach ranks among top 20 MSA's for economic performace during the recession - Brookings Institute

- Virginia Beach named by Fores as the 6th best place to "Ride out the Recession" - 2008

- Virginia Beach Boardwalk is listed in the top 10 great public spaces in America, By American Planning Associat.

- Virginia Beach named as one of the 10 BEST Places to grow up, U.S. News and world report

- The Best City to Buy a Home - reported by Good morning America with research from Zillow

- 6th Best place for the Outdoors  Forbes Magazine

- Virginia Beach MSA Ranked #1 in U.S. for jobs and growth in high impact firms.

This home has been rebuilt from some of the original foundation.  The owner tour down the original home, and almost all of the foundation and rebuilt a modern open home.

Details Address: 5120 Shenstone drive Type: Residential Style:  Bedrooms: 3 Bathrooms: 2 Garage: SingleSize: 1,616 sq. ft. Lot Type: Rectangular Lot Size:  0.86 acres  Year Built: 1941 "totally rebuilt from the ground up"Taxes: $1,815.00 USD   Description Newly remodeled from the ground up! Stainless steel appliances, upgraded fixtures, recessed lighting, panned ceiling and skylights in great room. Master bedroom with large walk-in closet, master bathroom with jetted tube, oversized glass enclosed shower.  This home offers seclusion on a large wooded lot - country living in the city. Oversized parking, and detatched garage.   Features Interior Features ▪ Carpeted Floors ▪ Ceiling Fan ▪ Skylights ▪ Window Covers Cooling ▪ Central Air Exterior Finish ▪ Vinyl Heating ▪ Heat Pump View ▪ Forest ▪ Woods Sewer/Water Systems ▪ Water District Appliances ▪ Dishwasher ▪ Garbage Disposal ▪ Oven Range ▪ Refrigerator ▪ Washer/Dryer Hookup

View the Virtual tour 

Details Address: 1949 ABORFIELD CT Type: Residential Style:  Bedrooms: 3 Bathrooms: 2 Garage: Single, AttachedSize: 1,226 sq. ft. Lot Type: Rectangular Year Built: 1986 Available Date: 8/4/2010   Description Wonderfully maintained 3 bedroom home, updated & conveniently located in Kempsville on a cul-de-sac. Only minutes from Lynnhaven & NAS Oceana. Enjoy the large fenced in backyard with its 500 sqft. wood deck. No pets.

After the proverbial real estate bubble popped, the fed and the banks restricted loans to such a degree only those with high credit scores could hope to purchase a home.  Things have changed, but it seems that most people are unaware of the changes.  

Currently one of the easiest loans to qualify for are FHA loans require a minimum of a 620 score, less than 5% down ( currently at 3.5% ), steady employment for the last 2 years with equal or increasing pay and the new payment shouldn't exceed 30% of your gross income. 

The FHA has increased two key features of an FHA loan the Private Mortgage Insurance went from 1.75% to 2.25% and the down payment may increase from 3% to 5%.   They have also decreased maximum closing cost assistance to the buyer from 7% to 3%

So, how do these changes compare?

Lets take a home selling at $200,000 - Remember I am not a loan officer, this is only intended to serve as an example, and to help dispel some of the misconceptions about buying homes.

                                   OLD FHA Loan                New FHA Loan
                                   Guidelines                      Guidelines

Max Closing Cost              $14,000 (7%)                 $6,000  (3%)
PMI                                $3,500 (1.75%)              $4,500 (2.25%)
Down Payment                 $6,000 (3%)                  $10,000 (5%)
Interest rate                     6%                              4.25%

Estimated payment:          $1,431+pmi                    1,277 +pmi

As is evident even with the change in interest rates are helping to keep the home buyers monthly payments lower than in the past.  However, these interest rates will not last!  To take advantage of them call me today.  Not let mis-information sway you, let me put you in contact with a loan officer who can give you the facts and figures based on your current situation.  Even if you think your credit score is low!  

After you are done reading this call me

In the last few weeks I have been bombarded by loan officers, telling me about the "LOWEST INTEREST RATES IN HISTORY".  But I remain amazed that not more people are taking advantage of these low rates, they won't stay there for long, and before you know it they'll be approaching double digits.

But how do interest rates actually affect your buying power?  It should come to no surprise that your monthly payment is directly related to the loan amount and the interest rate.  Change either of these and your monthly payment changes, and thus so does your buying.

Using an online mortgage calculator I ran 3 scenarios, all assuming the the home buyers had a house hold income of $75,000, I used the default ratios - I am not a loan office, I am a real estate agent :)

So, based on a $75,000 house hold income and a desired monthly payment of:  $1,400 

 Interest rate:  6%
 loan amount:  $233,508

 Interest rate:  5%
 loan amount;  $260,794

 Interest rate:  4.25%
 loan amount:  $284,588

As you can see that with only a 2.25% drop in interest rates your buying has increased significantly to more than $50,000!  Now with this low interest rate, a fixed 30 year loan you can have the home of your dreams right from the start!   Why?  Imagine this same home buyer facing interest rates of 8%, as some experts predict by 2011, his buying power changes dramatically, but in an entirely different direction:

Interest rate:  8%
Loan amount:  $190,797

Now our buyer has to settle for something other than his dream house.  If you are considering making the move to purchase a home in South Hampton roads time is of the essence!  Interest rates will not stay low and the median home price has gone up since this time last year.