There is proof yet again that now is the time to buy a home in the Greater Baton Rouge area.  "Housing Predictor" released their yearly ranking of the top 10 hottest real estate markets for buyers and Baton Rouge was #9. 

The ranking represents areas of the country where the housing market is expected to appreciate (bucking the national trend) based on factors such as; stronger employment,prospects of growth and promises of prosperity.  You may see the list in its entirety here.

Now is a great time to buy a home in the Baton Rouge area.  The interest rates are at historic lows, there are many financing options available and a large inventory of homes to chose from.  If you or anyone you know is in the market to buy a house in the Baton Rouge area please call Shannon Sims, The Exclusive Buyer's Agent in Baton Rouge at (225)767-1999, you may also email Shannon at shannon@Judyburkett.com.

Lately my phone has been ringing off the hook with some of my past clients wanting my expert opinion on whether or not they should refinance their homes.  While I am happy to speak with my clients and help them flesh out a plan that works best for them, it made me start thinking...should they be considering selling and moving up instead of refinancing?  The answer in quite a few instances was a resounding YES.

While each individual's circumstances are unique the factors that should be considered when making the refi vs. buy decision on the same:

1.  How much equity do you need to have in your current home to refinance? 

The rule (though not an exact number) is you need to have at least 15% equity in your home to do a rate and term refinance.  A rate and term refinance is applicable if you just want to change the terms on your existing balance - switch from an adjustable-rate mortgage to a fixed-rate, for instance, or go from a 30-year term to a 40-year.

1a.  How much equity do you need to have in your current home to buy?  T

That answer will depend a good bit on what price range you would be moving into.  If your new home would fall under the FHA limits than your down payment will 3.5% of sales price.  You must also take into consideration the cost associated with selling your current home, assuming that you are using the services of a REALTOR to market your current home you must factor in the commission and other seller fees.  All commissions are negotiable so it is not possible to give an exact figure here however, the seller's cost typically run between 6%-7% after all fees are added.  I am not factoring in the closing cost affiliated with buying the new home because given the current market conditions I have had much success with negotiating the seller paying the buyer's closing costs.

RECAP:  How much equity do you need in your currnet home to refinance? At least 15%

            How much equity do you need in your current home to buy?  At least 9.5%

2.  What is the cost affiliated with refinancing your home and how long will it take to recoup those cost? 

 Refinance loans have many of the same closing costs as your original home loan. The only break most borrowers may be eligible for is a reduction in the attorney's fee if you close your refinance with the same firm that closed your original loan.  While closing cost will vary from lender to lender the average closing costs/prepaids for a $200,000 loan without PMI is approximately $8,000. 

 If there is enough equity in your home above and beyond the 15%-20% that you must have to refinance you may be eligible to "roll" your closing cost back into your loan so you will not have to write a check at the closing.  BEWARE.. if you do this you need to figure out how long it will take you to recoup these cost. The average time to recoup the $8,000 closing cost with a new rate of 5% is 52 months. You need to look at you and your family's long term plan if you are not planning on staying in the home the amount of time necessary to recoup the cost, then the rate saving may not make sense.   This is a great calculator that will allow you to tailor the numbers to your individual situation and see how long it will take you to recoup the closing cost.

2a.  What is the cost affiliated with purchasing a home and how long will it take to recoup those cost? 

As stated above, the closing cost/prepaids will be approximately the same as a refinance.  One of the advantages of a somewhat slower market is I have been very successful in negotiating the seller to pay most if not all of the closing cost/prepaids.  It goes with out saying that in that instance the recoup time is 0 months.

RECAP:  What is the cost affillated with refinancing your home and how long will take to recoup those cost?  The cost if the same as a purchase and depending on your individual situation the average time to recoup is 52 months.

            What is the cost affiliated with purchasing a home and how long will it take to recoup those cost?The cost is the same as a refi and with negotiation your recoup time can be 0 months

Right now is a great time to buy a home the Greater Baton Rouge area.  Our market is strong, interest rates are great and there is a good inventory to chose from.  While every ones situation is unique and refinancing may be the best path for you at this time, it would behoove you to give Shannon Sims a call before you make that decision.  It may be the perfect time for you to buy that larger home with same or similar note that you are paying now.

For more information on homes in the Greater Baton Rouge area please call Shannon Sims at (225)767-1999 or email Shannon at shannon@judyburkett.com

LHFA (the agency that handles the bond loans) met this morning and below are the notes from a lender who attended:

Shannon,

According to the meeting I attended for LHFA Bond this morning, the 2008B Bond Issue will be available the last week of November or the 1st week of December. It is anticipated to go very quickly, probably less than 48 hrs.

We must have executed purchase agreements by all parties to send in reservations to LHFA as soon as it is released. So you need go shopping for houses ahead of time!! If you wait for the money to be released to shop, YOU WILL MISS OUT!!

I will be waiting at my computer each and every morning for that email to send in reservations for our clients !!

Also, it is anticipated to be similar to the last issue of 6.625% interest rate and w/4% asstiance. or at least 3% asstiance. What this means to your buyer's is 100% financing! Also, as always the seller's can pay closing cost so your buyer's could get in WITH NO MONEY INVESTED AT ALL!

They are HOPING to have another issue before the end of the year, but, no one knows for sure.

I have blocked out the entire day next Thursday, 20th to be in your office.

As you can see from the email above, the money will not last more than a couple of days. If you or anyone you know is interested in taking advantage of this oppurtuny please call me at (225)767-1999 or email me at shannon@Judyburkett.com 

Rachel, the lender, will be in my office all day next Thursday to meet with my buyers and get them qualified. Please let me know if you would like to set up an appointment.

Baton Rouge ranks near bottom for foreclosure activity
Baton Rouge was ranked 99th on a list of foreclosure increases for the nation's 100 largest housing markets. The Capital Region had foreclosure filings against .12% of all homes during the third quarter, according to RealtyTrac.com, only Syracuse, NY, had a lower rate at .10%. Baton Rouge remained low despite a nearly 175% jump in the number of foreclosures from third-quarter 2007. Foreclosures were filed against 373 homes in Baton Rouge during the quarter. Stockton, Calif., had the country's highest foreclosure rate, with 3.7% of homes facing seizure during the third quarter. New Orleans was tied for 76th, with .27% of all homes having a foreclosure filed against them. Nationwide, foreclosure filings were up 71% from third-quarter 2007. Foreclosure rates slowed in September, thanks to new laws in California and North Carolina aimed at reducing the pace at which lenders can move forward with defaults.

Wow!!! At the risk of sounding like a cheerleader; now is truly a great time to buy.  The local market is strong, interest rates are great and there is inventory available.  If you or anyone you know is in the market please give me a call at (225)767-1999 or drop me an email at shannon@judyburkett.com

The last issue of the year is now available.  This is a State Bond Issue which means it can be used in any of the 64 parishes.    The bond will allow you to buy a home at a reduced interest rate and will give you 4% of the sales price to use towards your closing cost/down payment.  Most of my bond buyers chose the FHA  (3% down payment) or the Rural Developement (no down payment)  and the 4% assistance covers most of the closing cost and prepaid items.  Typically my buyers do not bring any money to the closing table!

Below is a brief breakdown of the criteria for the State bond:

1. FIRST TIME HOMEBUYER RULE IS WAIVED!!!  YOU DO NOT HAVE TO BE A FIRST TIME HOMEBUYER!

2.  HOME MOST BE LOCATED IN THE STATE OF LOUISIANA

2. INCOME LIMITS:  FAMILY OF 2 OR LESS: $67,400 FAMILY OF 3 OR MORE:$78,680

3. MAXIMUM SALE PRICE: $289,704

4. THE COBORROWERS DO NOT HAVE TO BE RELATED, 2 UNMARRIED BUYERS ARE   ELIGABLE

5.  THERE IS NO ORIGINATION FEE

6. THE INTREST RATES ARE: 6.625% FOR 30 YEARS FOR THE ASSISTANCE PROGRAM, 6% FOR 30 YEARS FOR THE LOW RATE PROGRAM

7. FHA, VA, RD AND CONVENTIONAL LOANS ARE THE LOAN TYPES

If you, your friends or family members are interested in purchasing a home and would like to explore the bond money option please contact me ASAP. You can reach me at (225)296-7723or by email at shannon@Judyburkett.com.  Remember; if you call make sure to ask for Shannon Sims.

Also , the Conventional rates are GREAT!!!  The Conventional 30 year rate today is 5.875%!!!!  Now is the time to buy. If you or anyone you know is in the market to buy or sell please give me a call at (225)296-7723 or email me at shannon@judyburkett.com