Sales, Digital Marketing, and Business Development expert with a love for all things real estate. Real Estate has been a passion of mine for many many years, and no matter what type of business venture or career I am involved in, locally I will always be engaged in the real estate industry as an agent, investor or developer.
Luckily for us Senator Tim Scott has been on our side pushing for FEMA to look at our flood plains and rezone Charleston SC’s over 20 yr old flood levels. After 2015’s historic devastating flooding that wreaked havoc over almost the entire state not just the low-country, but including the midlands it is about time the FEMA flood maps be reconfigured.
The Senate and House have passed (March 2014) a bill to delay premium hikes for years on hundreds of thousands of homeowners who buy flood insurance from the federal government. Important points are:
The House bill caps annual price increases in order to prevent sticker shock, a move that will slow the pace of the authorized transition to actuarially sound policies. It also reinstates grandfathering of buildings built to a previous code standard. The new legislation would delay for up to four years huge premium increases that are supposed to phase in next year and beyond under new and updated government flood maps. It also would allow homeowners to pass below-cost policies on to people who buy their homes. The 67-32 vote reflects widespread concern about changes enacted two years ago to shore up the program’s finances. The changes are producing sky-high insurance rates that are un-affordable for many homeowners in flood-prone areas like Charleston whose insurance has historically been subsidized by the government and other policyholders.
NEW FLOOD PRELIMINARY MAP CHARLESTON SC 2017
Homeowners who upgrade to a new policy will be allowed to do so without being assigned to a new risk category. Homeowners who overpaid under the new rules will be reimbursed.
One proposal, by Sen. Pat Toomey, R-Pa., would proceed with the premium increases but cap them on most properties – including homes being sold – at 25 percent per year until the premium reflects the true flood risk. It faces almost certain rejection, though Toomey said it lines up with what the Obama administration wants. The administration said in a statement it “strongly supports a phased transition to actuarially sound flood insurance rates.”
The legislation is a win for coastal state Democrats like Sens. Mary Landrieu of Louisiana, Bill Nelson of Florida and Bob Menendez of New Jersey, who have formed an unstoppable coalition with Republicans representing coastal areas and the Mississippi basin like Sen. John Hoeven of North Dakota.
The bill, however, contains no relief in the offing for 1.7 million owners of second homes, who are not covered by the Senate bill and who face annual 25 percent increases – provided they owned their home before Congress overhauled the program in 2012. They say the premium hikes threaten the viability of older beachfront towns.
As of March 20th 2015 the latest changes in flood insurance rates:
We all know the chances of a flood are usually slim, but if it does happen the effects can be devastating. So making sure you are covered correctly will help ease this possibility. As much as 75% or more of the low-country is considered in a flood zone or possibility of flooding. More than 14,000 homes in the Charleston area will be affected by recent changes to the new FEMA flood program. FEMA is changing the flood lines, and expect that the new changes will cost you money if you are buying a home in Charleston. The biggest thing to consider is to avoid buying a home built prior to 1974 and to be even MORE careful don’t consider buying a home built before 1995. As there were building codes that were implemented in the 90’s to combat the threat of floods and insurance providers consider this. In most cases the new rules for flood insurance will require almost every house being purchased or insured to have a current up to date elevation certificate done.
Depending on what is on the elevation certificate about where or how your home is situated as it pertains to the flood plain will determine your cost for flood insurance. Some other factors that will dictate your cost for flood insurance are the way the foundation was built, age of home, height of home, and number of foundation vents and their size (sq inches). There are a lot of factors that go into calculating your insurance costs so the best thing to do is to contact a licensed local agent to answer your questions. Increases in flood insurance premiums having negative effects on listing your home for sale. MORE HERE –>
UPDATE: 1/16/14: You may hear about a flood insurance premium delay in the Omnibus Appropriations Bill that passed Congress this week – this delay is for implementing future premium increases on grandfathered (post-FIRM) properties only for the next 9 months. This does not address the devastating subsidized (pre-FIRM) point of sale premium increases hurting our real estate market. The Omnibus Appropriations Bill prohibits funding for implementing future premium increases on “grandfathered properties” only. It does not include a delay for the home buyers who have already seen rate increases over the past year.
*The good news – the U.S. Senate plans to vote on legislation that would create a 4-year “time out” for both impacted home buyers and future increases on “grandfathered” properties. The Senate Majority Leader has promised the sponsors a vote on S. 1846 Homeowner Flood Insurance Affordability Act which would delay any increases for 4 years; they are currently negotiating the number of amendments and amount of debate time. The bill is expected to come up the week of January 27 if not as soon as today. Both South Carolina senators, Tim Scott and Lindsey Graham, are co-sponsors of S.1846. If it passes the U.S. Senate this month, it would still have to clear the U.S. House of Representatives and that is a high hurdle to clear — although Congressman Mark Sanford supports the bill.
SUBSIDIZED PROPERTIES This includes Pre-FIRM properties below Base Flood Elevation (BFE). Pre-FIRM in Charleston County means start of construction or substantial improvement was before 1975. To determine the pre-FIRM date for every city and county in South Carolina, click here.
Beginning when the policy renews starting October 1, 2013, rates will move to full actuarial rates at the time the property sells (this will apply retroactively to all properties sold since July 6, 2012).
Non-primary residences, commercial properties and repetitive loss properties:
Beginning October 1, 2013 rates move to actuarial rates and premiums will increase 25% per year. The only way to know your full actuarial rate and to find your maximum premium is to have a current elevation certificate. Access FEMA’s 2013 Rate Schedule for second/vacation homes here (which includes the first 25% step increase)
Note: Rates are per $100 of coverage.
This includes post-FIRM properties that were built at Base Flood Elevation, but BFE has since been raised since construction OR the property was mapped into a different flood zone.
Rates will be phased out and be brought to new actuarial rates only after the new flood rate maps are adopted. This is expected to be completed in South Carolina in late 2014 or early 2015.
ALL OTHER PROPERTIESREQUIRING FLOOD INSURANCE
All other properties will see rate increases of at least 5%, but possibly higher (in the 20% range), but each property is different.
(Source: http://www.charlestonrealtors.com/) Advise your clients to speak to an insurance agent before buying.
Downtown Charleston South Carolina Flood Prone Areas
(area in white is the worst)
The Streets in Downtown Charleston SC that are prone to significant flooding according to Google.
If you don’t carry adequate flood insurance and you have a mortgage your lender will give you what is called FORCED PLACEDinsurance. Which is usually much more expensive then you would find on your own.
Secondly, flood insurance is flood insurance. There is NO shopping around for flood insurance. FEMA regulates flood insurance and its costs. Agents simply are the distributors of the policies. However, your insurance could vary in cost IF and only if the agent providing you the flood insurance quote makes a mistake in inputting the information therefore, affecting the rating adversely.
–In Charleston County, FEMA said all homes built before April 1971 pre-date the first flood map. In Dorchester County, the date is January 1982, and in Berkeley County it’s September 1983.
Homes built after flood maps were adopted will not see as much impact from the NFIP changes, but they could be affected by the new flood maps FEMA is developing for the entire United States, the agency said.
On Oct. 1, when parts of the new law kicked in, flood policies increased an average of 10 percent. Under the changes, subsidies are being removed from second homes, rentals and businesses, as well as dwellings that have had repeated flood losses. Homes sold in pre-FIRM areas are automatically required to have the much more expensive insurance that reflects the “true risk” of flooding. (Source – Post & Courier)-
Senior officials for NFIP said they are $24 Billion in debt following many recent disastrous storms in recent years as the costs and consequences of flooding continue to increase. “For decades the program subsidized rates and has made insurance available but didn’t reflect the true risk of flooding, and just like our health insurance system, artificially low rates and discounts are no longer sustainable”.
Rate changes are likely to affect owners of subsidized pre-FIRM non-primary residences, business properties, and properties that have experienced sever repetitive flood losses. Owners of pre-FIRM condos and multi-family units will also see their rates gradually increase. Owners of pre-FIRM primary residences will retain their subsidies unless the policy lapses; it suffers a severe, repeated loss’ or it’s sold to a new owner which is retro active to July 6th, 2012 when the legislation was enacted.
As FEMA improves its mapping technology and draws more accurate flood maps, some homes may now be located in a flood zone, or higher risk area, where the flood insurance is more expensive. Also, some insurance agents may adjust rates to correct previous mistakes made about the home’s features when they are re-evaluating a policy at renewal.
Below are the lists of things needed to get adequate flood insurance.
1.) An up to date, signed survey, with an elevation certification from a licensed professional (engineer, surveyor, architect) on the most recent FEMA form dated as of Jan 1, 2007. To see if your home is in a flood zone clickHERE.
2.) 2 dated photographs of the home both front and back within 90 days of requesting coverage.
Definitions of FEMA Flood Zone Designations : Charleston SC Flood Zones
B, C, and X
Areas outside the 1-percent annual chance floodplain, areas of 1% annual chance sheet flow flooding where average depths are less than 1 foot, areas of 1% annual chance stream flooding where the contributing drainage area is less than 1 square mile, or areas protected from the 1% annual chance flood by levees. No Base Flood Elevations or depths are shown within this zone. Insurance purchase is NOT required in these zones.
Areas with a 1% annual chance of flooding and a 26% chance of flooding over the life of a 30-year mortgage. Because detailed analyses are not performed for such areas; no depths or base flood elevations are shown within these zones.
Areas with a 1% annual chance of flooding and a 26% chance of flooding over the life of a 30-year mortgage. In most instances, base flood elevations derived from detailed analyses are shown at selected intervals within these zones.
Areas with a 1% annual chance of shallow flooding, usually in the form of a pond, with an average depth ranging from 1 to 3 feet. These areas have a 26% chance of flooding over the life of a 30-year mortgage. Base flood elevations derived from detailed analyses are shown at selected intervals within these zones.
River or stream flood hazard areas, and areas with a 1% or greater chance of shallow flooding each year, usually in the form of sheet flow, with an average depth ranging from 1 to 3 feet. These areas have a 26% chance of flooding over the life of a 30-year mortgage. Average flood depths derived from detailed analyses are shown within these zones.
Areas with a temporarily increased flood risk due to the building or restoration of a flood control system (such as a levee or a dam). Mandatory flood insurance purchase requirements will apply, but rates will not exceed the rates for unnumbered A zones if the structure is built or restored in compliance with Zone AR floodplain management regulations.
Areas with a 1% annual chance of flooding that will be protected by a Federal flood control system where construction has reached specified legal requirements. No depths or base flood elevations are shown within these zones.
High Risk – Coastal Areas
In communities that participate in the NFIP, mandatory flood insurance purchase requirements apply to all of these zones:
Coastal areas with a 1% or greater chance of flooding and an additional hazard associated with storm waves. These areas have a 26% chance of flooding over the life of a 30-year mortgage. No base flood elevations are shown within these zones.
VE, V1 – 30
Coastal areas with a 1% or greater chance of flooding and an additional hazard associated with storm waves. These areas have a 26% chance of flooding over the life of a 30-year mortgage. Base flood elevations derived from detailed analyses are shown at selected intervals within these zones.
Ok.. So you have decided you want to build a new home, and you have obtained mortgage financing, now you have to figure out whatkind of new construction home build you want to do? Do you want a new fully custom home, tract built, or semi-custom? Well, regardless of which of those you choose aside from the choice of which home builder you want to hire to build it the next most important factor is your floor plan.
You might not think it’s that important because most are just so excited about having a new house, that their real estate agent will usually run them through a local community by a large national home builder and push them into something without sitting them down to discuss how they should pick out a plan. After all the agent isn’t the one that will be living there day in and day out, you will. Trust me you don’t want to get sucked into a house because you think it’s pretty on the inside or you like the vaulted ceilings, tile floors, or whatever only to regret it in a year because you now realize that the floor plan doesn’t fit your daily family needs. Unfortunately this happens all to often.
If you are going fully custom you will need to hire an architect and then you and your architect will usually talk about all these factors. Hiring an architect (if you can afford one) is definitely the way to go if you are building a custom home, because they can tailor the home to your needs, and they will suggest things you otherwise would have never thought of.
Let’s go over the questions you need to ask yourself when choosing a floor plan:
1.) How large is your family? Do you planning on having children? Although, you might not have kids now, if you plan on having them you should think about things like where is the laundry room (1st or 2nd floor), how large are the bedrooms and closets in the bedrooms, where are the bedrooms in relation to the exits of the home, where are the bedrooms in relation to the master bedroom and stairs. I think everyone knows that open floor plans are the rage, but when having children it is a must have. By having a very open floor plan allows you to be able to cook in the kitchen, sit in your office, or dining room and still easily see the kids to keep an eye on them.
2.) How old are you? How long do you plan on living in this home? If you are older and getting close to retirement you need to consider a one story home, house plan on a slab foundation instead of crawl space, or one with an elevator. Yes; I said elevator. Here in Charleston SC, real estate is commonly known to have elevators because much of our area is in a flood zone, and the lots are fairly small so homes can be close to one another and parking is best suited under the home. You may be nimble now, but as we age it becomes harder and harder to walk up stairs and get around and a home that accommodates your mobility needs is key. Where is the master bedroom located? Obviously, you won’t want to build or buy a newly built home with the bedroom upstairs if you are in your 60’s now and this is to be the last home you live in. To that I also go further and say you should also think about the size of lot you want to build on, or do you want a condo instead. Many seniors opt for a “patio home” which is usually a small one story home on a slab with a small lot so as to keep the yard upkeep manageable. You may find the best home and community until later realize you are spending $200+ month on landscaping costs because you built a home on a large lot and you can no longer do the landscaping yourself.
3.) Closet space – I know this probably applies to mostly woman and is likely the most obvious of the things to consider when picking out or designing a floor plan. If you can’t have your dream, gigantic closet as far as sq footage is concerned think about building the house with 9 ft ceilings and then you can have more room for two rows of hangers, and shelves without needing a lot of extra sq footage.
4.) Storage– Do you tend to collect and hold onto material things? Do you have a lot of family heirlooms? If this applies to you then you need to consider how much space is available for storage, and what unused space in the home can be converted to a storage space. Many home plans have tiny nooks here and there that can be fitted with a door and lined with plywood to make for extra storage space. But wait; how accessible is the storage space that is in the home? Meaning, are you going to have to squeeze in and out of closets, and walls to get to your storage spaces. You may want to consider having a floor plan that has storage in the main parts of the home and not just the attic or basement because if you need to access things you put into storage a lot it will get annoying to go up and down the stairs.
So.. If you are looking to build a new home in a developmentwith a large builder and pick one of their existing home plans, build your own custom home with a local home builder, or buy a house plan from the internet you need to really do your best to think long and hard about it, because you don’t want to be in a home you don’t enjoy everyday. Secondly, if you notice there are annoying things with your home layout there is a good chance that prospective buyers in the future will notice it too. A good real estate agent in Charleston, SCor wherever you are considering building should have this discussion with you so you don’t make the wrong choice.
Who’s to say what the nicest or best of anything as those terms are subjective, but I bring this article to you as my personal feelings as to what I feel is the nicest neighborhood in North Charleston. I have lived in the Charleston area since 1999, and there is no shortage of really nice communities here, but unfortunately the price of real estate can be out of the range of a lot folks because of it’s proximity to the beaches of Charleston, and historic downtown. Being a Charleston, SC real estate agent it’s my job to help people NOT from the area find the communities they might like to live, and it’s no mystery locally that North Charleston unfortunately has a stigma of being the “not so good” side of our beautiful town. If you aren’t from the area as many if you’ve moved here to work for such corporations like Boeing, Bosch, and Volvo just to name a few and have heard bad things about North Charleston let me first start by saying that North Charleston is a great area with many great neighborhoods, but one that I really like is Coosaw Creek. As a Realtor I will gladly help you, and show you homes throughout all of North Charleston, but I simply wrote this article as a to feature this particular gated community. So look out for other articles about other communities in the Low-country. To see schools in this area click HERE.
So for those who have to or want to live in North Charleston I am writing this post to share with you my personal favorite neighborhood in North Charleston. Let me explain why I call Coosaw Creek the nicest neighborhood in North Charleston. Coosaw Creek is a gated community located approximately 30 mins drive from downtown and about 40-45 mins drive to the beaches of Charleston, SC. Let me start by pointing out the features I love about this neighborhood:
– All the homes are on large well landscaped lots (which is hard to find in all of Charleston),– Large mature trees– Custom-built homes [Many of those homes are brick] – also which is hard to find afford-ably in Charleston.– Gated
The best part of Coosaw Creek neighborhood is the country club. It features one of the nicest 18 hole golf courses in Charlestonwith a driving range, well manicured fairways, and greens, great course layout and upscale club house for dining, entertaining, and special events. The golf course has many ponds with many local species of fresh water fish such as large mouth bass, bluegill, and shell crackers to which children can be seen fishing. Local wild life can be seen all over the course as well such as herons, egrets, ibis, turtles and the occasional alligator. The Coosaw Creek community also has multiple hard court tennis facilities ready for the most accomplished players. So if you are relocating to our beautiful town we call Charleston and the north area is where you might be considering then give Coosaw Creek a look, because I think you too will like it as much as I do. If you’d like to see homes in Coosaw Creek searchhomes listings below and I’d be glad to show them to you. If you’d like to see other homes in other communities in North Charleston, SC see below. If the country club kind of neighborhood isn’t for you my other favorites I’d consider is The Refuge at Whitehall,Cedar Grove,Ashborough East,Mateeba Estates&Indigo Fields .
Average price per square foot, and average sales price are the two largest indicators that both prospective buyers should look at as well as those considering selling their houses. If you are selling you want to make sure you’re trying to sell at the peak of the market, and if you’re a buyer vice versa, AND is the area you’re considering buying a good one? CHARLESTON, SC—(December 10, 2015) 1,029 homes sold in November in the region at a median price of $246,000 according to preliminary data released today by the Charleston Trident Association of Realtors® (CTAR). In November 2014, 987 homes sold at a median price of $222,067. Year-to-date data shows that sales volume is 14% ahead of where it was last year, with 14,758 sales through November 2015 and the regional median price has increased by 5.3%, currently $228,000. Through November 2014, 12,933 homes had sold at a median price of $216,352. Inventory has declined about 15% from 2014. There are currently 5,390 homes listed as “active” for sale in the Charleston Trident Multiple Listing Service (CTMLS).
Market Research Data
National Real Estate Sales Trends By Metropolitan City
Mt PleasantJames IslandDaniel IslandWest AshleyDowntownFolly BeachIsle of PalmsSullivans IslandKiawah IslandJohn's Island
Average Price Per Sq Ft Sold Homes Charleston SC
Mt PleasantJames IslandDaniel IslandWest AshleyDowntownFolly BeachIsle of PalmsSullivans IslandKiawah IslandJohn's Island
Housing vacancies are currently at the lowest levels since at least 2005, according to the Census Bureau estimates. Nationally, the rental vacancy rate was 7.3 percent while homeowner housing rate was 1.9 percent for the third quarter 2015.
CHARLESTON SC INVESTMENT PROPERTIES & INCOME PRODUCING REAL ESTATE
For investors in Charleston SC the real estate game is a tricky one. We all made thousands and — probably millions if you add it all up — flipping houses, leasing offices and renovating condos. Then the real estate market collapsed, throwing the U.S. into the 2007-2009 recession.
Now the prognosis for real estate investments is looking much better, though it’s anything but simple. Some commercial real estate has rebounded, with investors craving income that real estate provides, while Low-country residential Charleston real estate — particularly single-family homes — may be at once-in-a-lifetime bargain prices.
Four top experts were asked for their take on the the opportunities and potential pitfalls facing real estate investors in the coming years. Edited excerpts of their interviews follow:
Jim Sullivan, managing director of REIT research, Green Street Advisors
Every diversified investor should have some exposure to commercial real estate, and REITs [real estate investment trusts] provide a terrific, transparent and liquid way to get that exposure. Operating fundamentals in most property types range from good to great, with good being the shopping center business and industrial business and great being the apartment business. The economy is not doing great, but the silver lining for commercial real estate is how little new supply is coming on the market. Too much new commercial construction is typically what puts a halt to real estate recoveries. This time around, it’s just not an issue.
REITs tend to be specialized by property type. You can pick and choose, depending on what your economic outlook might be. If your forecast is a little rosier, you’d want to be in property types that respond well in economic recoveries — hotels, for example, or REITs that own shopping centers with lots of small tenants. If you wanted to be a bit more defensive, health care REITs are a terrific place to be. When investing in Charleston real estate the safe bet would obviously be in tourism based avenues considering that is the most consistent driver of revenue.
The biggest opportunity is buying distressed single-family homes, because that market has been completely beat up. The next biggest opportunity is buying land because very few people have been focused on it. If you have a long-term view, you’ll probably see a significant multiple return. Buying land is a complicated business, though. Mom-and-pop investors should not be buying land.
Lauren Pressman, director of investment research at wealth management firm Aspiriant
The U.S. is in a period of sustained but very slow growth. Job reports are huge factors for real estate, because jobs create demand for housing, for offices, for travel and at retail establishments. We’re wary of things like retail and office, except in very unique circumstances. Multifamily real estate (apartment buildings) arguably had all the tail winds at its back to do the best of all asset classes. However, be careful. There is so much capital chasing multifamily, and that can lift prices beyond a point where your return is commensurate with risk.
No matter what your strategy is always be careful and have a good local agent to help you navigate through the maze of options out there for investing in real estate in Charleston or anywhere. Find a great contractor in Charleston and let them help you with the renovations, and repair necessary to get a C.O. and move onto the next real estate opportunity.
One of the long tried and true income producing real estate investments popular in Charleston area is in beachfront homes or resort vacation rentals. It’s no mystery that homes in beach communities are very attractive year round and hundreds of thousands of visitors come to our beaches in S.C. to unwind. Homes for sale on the Isle of Palms and in Wild Dunes real estate make big money on weekly vacation rentals for their owners. Many developers and investors will even buy an existing home, tear it down and build a new one just for the returns it can produce. Weekly rentals on Folly Beach, Kiawah, Seabrook Island, and even downtown Charleston garner upwards of $4000 to $7000+. Even with HOA Dues in Wild Dunes, Kiawah Island, and Seabrook Island + monthly regimes for condos/villas these properties can get easily $30,000 yr for one bedroom to $90k+ for beachfront and 3 bedroom units.
There has never been a better time to pull money out of the equities market and into real estate, rates are low, and prices are too.
The factors that determine the cost of your home’s insurance expenses varies greatly as one can imagine. However, here in Charleston SC there are additional concerns that we have to consider like; wind from hurricane’s, flooding from, and the intense heat our summers bring. All these contribute greatly to the longevity and strength of your home’s structural integrity. Age of a home is one of the largest negatives when it comes to the price of house insurance because the older the home the more likely there are defective, outdated, and deficient structural components that are likely more apt to fail or be at greater risk. The design of the house is also a huge consideration to carriers when quoting your policy. When considering buying a home it’s a good idea to look at a newer home (no more than 20 years old) if saving money is something you are concerned with. If your home was built in 2008 or later, make sure you are getting credit from your insurance company for having a home that meets modern building codes. Also, if your home has a hip roof – a pyramid-like roof that slopes on four sides – be sure your insurer is factoring that into your rate, because hip roofs are more hurricane-resistant than gable roofs.The amount of the incentive varies according to risk associated with the geographical location, building materials, and construction methods of each home as well as actuarial data from individual insurance companies. (Discounts apply only to the hurricane-wind portion of your policy; contact your insurance agency for more information.)Considering all this, you may still qualify for a DISCOUNT ON YOUR HOMEOWNERS INSURANCE. To qualify you must submit an inspection from a state certified wind mitigation inspector, licensed contractor, building inspector, architect, or engineer, legally validating and identifying the existence of any wind mitigation measures such as below: (Insurance providers will have the form needed to give to one of the experts listed above).
Type of Windows (quality and impact resistant wind rating)
* For Flood Insurance – Newer foundation Vents (such as smartvents.com)If you have a hip roof, permanently installed approved shutters for windows and doors or any of the above credits you may qualify for discounts on the wind portion of your insurance policy.The most likely discount for home- owners to overlook is roof tie-downs, generally metal clips or straps attaching the roof structure to walls of the home. Qualifying roof tie-downs can result in an annual premium discount in the low single-digits, but that could add up to real money if you’re owed a retroactive discount.
Info Gathered From: American Property Consultants
Keep in mind that each year it is very likely your insurance premiums will increase and honestly for no other reason than your insurance provider wants to make more money, and feels they can justify the increase because the house is one year older. So it’s a good idea to shop your home’s insurances EVERY year to save money.
Prior to the real estate crash that began in 2007 it was hard enough to get good mortgage loans for special real estates sales like: Charleston, SC jumbo loans, mortgages for investment properties, and fractional ownership home loans. Now after the economic and banking crash banks willing to lend money on riskier assets has become all but impossible without giving up your first born. Below are the basics with getting started with financing investment properties in the Charleston, SC area. I am a local Charleston SC real estate broker with over 13 yrs mortgage experience and once founder/CEO of Mortgage Professionals, LLC wholesale mortgage firm. Please feel free to contact me to discuss your home buying plans in Charleston so we can figure out the best method to achieve your goal. Although I do not write mortgage loans any longer I know and work with the best mortgage lenders in the country and still know what I am doing with regards to how to get financing. Mortgage Loans for second homes is different from that of purchasing homes for investment purposes only. Reserve requirements vary depending on the number of financed properties owned (including primary residence): 1-4 financed properties owned:
2 months of reserves on the subject property if it’s a second home.
6 months reserves on subj. property if it’s an investment property plus 2 months reserves on each other second home or investment property.
5-10 financed properties owned:
2 months of reserves on the subject property if it’s a second home.
6 months of reserves on the subject property if it’s an investment property plus 6 months reserves on each other financed second home or investment property.
Note: Freddie Mac’s guidelines are *currently* 6 months PITI. Other underwriting changes for investment properties include:
70% LTV for purchase of 1-unit and 70% for 2-4 units.
720 minimum low-mid credit score.
No history bankruptcy or foreclosure in the past 7 years.
Rental income must be documented with two years tax returns.
Don’t forget that there is a significant price hit of 0.75% to fee from Fannie and Freddie with investment properties on top of the credit score/loan to value adds (LLPA). Seller contribution is limited to 2% of the sales price with investment property. Underwriters will be very strict on investment properties in today’s real estate climate so be prepared.
If you are thinking of buying investment property contact me and we can discuss your options before we go house hunting.
Building a new home can be an exciting thing, but it has a lot of things to consider. Even if you are just building with a large national builder there is more to it than one might imagine. So one might as themselves is it worth it to build new? Should I buy an existing home? There are some factors to consider when building a new home.If you ask a mortgage loan officer they are going to try to steer you toward buying a built home instead of building because getting a construction loan is a almost impossible these days. Trust me I know because I was in the mortgage business for over 13 years. My suggestion is if you absolutely have to have a new home, then try to find a semi-custom “spec” (speculative) home. Meaning a developer buys a large plot of land and has multiple house plans from you to choose from. IF you and your real estate agent get under contract on a home that is in the middle of construction but not yet sold your home builder will usually let you pick out many things that fit your taste. Like: the type of flooring, paint colors, trim packages, counter tops, cabinets, even type of roof material, and landscaping so you get a new home with a custom feel without all the hassle of having to hire an architect, permitting, etc.Since I am Charleston, SC real estate agent, built my own home, and once owned a mortgage company I will answer the question for you from my experience.To be honest with you building is kind of a pain, unless you have a great home builder and bank. Right now banking and mortgage lending is NOT smooth sailing. It was a pain getting a construction loan when anyone with a pulse could qualify in 2004-2006. So getting a construction loan now is even more of a nightmare. As an ex- mortgage loan professional I would not suggest building just for that reason alone. You have to put down a lot more money then you would have to for just a traditional purchase.If you still want to build just be prepared for a busy few months. Depending on the size of home, the finishes, the town you are building, among others, the process can be from 4 months to 2+ years. There are many meetings involved, decisions to be made, and things to consider, and with a lot of people. IF you really do your homework and find a great reputable, experienced builder then you can make your process a little easier. In any event building a home is not usually an enjoyable experience, simply because there are so many choices and changes, that can test your nerves.Precision Construction is Charleston’s best Affordable Home BuilderIn closing my suggestion is to seriously think about it before making a decision. You may even consider buying an older home, or a foreclosure and renovating it to look new. If you want a like new home then I suggest letting me find you home that needs a lot of work then let a contractor redo it to your liking. Then you can make changes, additions, and improvements that will suit you. Sometimes when doing a renovation it too can also be a difficult process for getting money from a bank, but one loan that is tailored for this type of process is a 203k from FHA. Make sure you specifically ask about this type of loan and make sure your mortgage loan officer is very very familiar with this type of loan.If you have decided you absolutely have to have new construction, but don’t think you want to deal with the hassles that come along with building one yourself, you can always look for an already built spec home or at least one already started. This is where a real estate agent can be a huge help.
Finally. Phew!.. I was beginning to get worried, and I think most were that the small bright spot in housing was beginning to dim. Mortgage rates were SO low for so long I guess it was inevitable that they would have to come up but a few months ago I don’t think people thought they would skyrocket a half point over night almost. However that’s exactly what happened this summer when the Fed Chairman talked about possibility of the government cooling its purchase of treasuries (a.k.a tapering) thus increasing mortgage rates.Mortgage lenders in Charleston SC have seen applications for home loans fall slightly in the latest weeks as a drop in demand from home buyers outweighed an increase in demand from those looking to refinance, the Mortgage Bankers Association said this week.Worry no more, currently rates are back down to a very attractive 4%. As of October 3rd, mortgage interest rates fell to their lowest level since June, but will likely level off. As of today rates are at 4.08% and have been that way every since the first week in Oct. Fingers crossed. The latest drop in rates came amid declining consumer confidence and because of the of the government shutdown, says Frank Nothaft, Freddie Mac chief economist.Why is it that the bond market is so vital to mortgage rates you ask? Treasure bonds are mortgage backed securities and the purchase and sale of treasuries directly impact the rise and fall of rates throughout the day. Since the economic crash the U.S. Government has artificially affecting mortgage rates to keep them low through purchasing billions of dollars of treasury bonds each month with the public’s money. That’s not such a bad thing.. Seems to be a good investment don’t you think? Artificially you ask? Yes; because truthfully (at least in my opinion) investment firms, financial advisers, IRAs, and the like in the markets who buy and sell these should be the only thing effecting this not the government.Mortgage rates pushed up from historic lows in May and bounced higher to mid-August before leveling off. They’ve been trending downward in recent weeks since the Federal Reserve said last month it will not begin tapering its monthly purchases of mortgage-backed securities and Treasuries, which has kept interest rates low.
Often time, prospective home-buyers become homeowners by securing a secured mortgage loan in the first instance and then subordinate them with a second mortgage loan, often known as the home equity loan. Due to the poor economic condition in the economy, too many households and individuals are suffering from lack of funds and therefore are not being able to manage the mortgage payments on both their first mortgage loan and second mortgage loan. While the first mortgage loan or the original loan on the property can be modified, most struggling homeowners are wondering about the chances and prospects of modifying their second mortgage loan. If your first mortgage loan has been modified under the Home Affordable Modification Program, you can be sure that this Federal government modification program will also help you achieve affordable payments on your home equity line of home equity line of credit.Second liens on your home – Modifying themThe second mortgage loans are usually called home equity loans or second liens. Technically, the second liens are bound to be subordinate to the first mortgage loans. While you opt for loan modification on your first mortgage loan, the high payments on the second mortgage loan can still be taking a toll on your personal finances. But you need not fret as there is a federally sponsored program called the Home Affordable Second Lien Modification program, abbreviated as the 2MP, they might help the struggling homeowners to alleviate the stress of making sky-high payments on their second liens.Eligibility criteria for modifying your second mortgage loanNow that you know that there is a federally sponsored program through which you can modify your second mortgage loan, you must be wondering about the eligibility criteria. Your first mortgage loan requires to be modified under the HAMP, and apart from this, the 2MP applications shouldn’t have missed 3 continuous monthly installments on their HAMP modification arrangements. The second lien or home equity account needs to be opened before 1st January, 2009 if the borrower wants to qualify for the 2MP. You should not have been convicted of theft, felony or forgery in relation with a mortgage transaction since the last 10 years. Besides, the individual mortgage lenders who participate in 2MP might even have their own requirements; for instance, you might have to owe at least $5000 on your second mortgage loan for qualifying for 2MP.The potential benefits of loan modification through 2MPIf you’re someone who’s struggling to meet your monthly mortgage payments on the second mortgage loan, you can follow some guidelines in order to qualify for the same. Check out some benefits that you may reap when you modify your second mortgage loan through the 2MP.1. The interest rate that you pay on an interest-only home loan might be slashed off by 2%
2. The interest rate on the second mortgage loan will be revised by up to 1%
3. The lender may forgive a portion of the second mortgage loan under the terms of the 2MP
4. The forbearance that you receive on the first mortgage loan can be carried over to the second
5. The repayment term of the second mortgage loan could be extended to 40 years.The names of the servicers who are presently participating in 2MP are Bank of America, CitiMortgage, Inc., GMAC Mortgage, LLC, J.P Morgan Chase Bank, NA, Bayview Loan Servicing, LLC, Wells Fargo Bank, NA, Nationstar Mortgage LLC and many more. Check the availability of your lender before taking the plunge into the 2MP. Take into account the above mentioned details on second mortgage modification so that you may take an informed and measured decision. The sooner you modify the loan, the easier it will be for you to repay the loan and safeguard your home.