Tag Archives: Charleston Real estate

Increases in Flood Insurance Inevitable – Facts about Charleston, SC Flood Insurance

The Latest News on Flood Insurance Changes

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 hikesCharleston Flood Insurance 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.


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: 

Rate Changes

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.

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.

Primary residences:
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 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)

Flood Areas Downtown Charleston SC


If you don’t carry adequate flood insurance and you have a mortgage your lender will give you what is called FORCED PLACED insurance. 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 click HERE.

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.

AE, A1-A30

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.

Financing Investment Homes Charleston SC | Investment Properties in Charleston SC Area


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.
  • Borrowers required to sign form 4506 (which you can expect on ALL loans these days–including owner occupied).

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.

Should I buy an existing built home or build a new one?

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.

Jumbo Mortgage Loans Charleston SC

Jumbo Mortgage Loans Charleston SC


Here in the Charleston, SC area it is no mystery that we have some very expensive residential luxury real estate, and unless borrowers have the cash to pay for it, often times they need jumbo loans. There are countless beach and water front homes on Kiawah, Seabrook Island, Daniel Island, Sullivan’s Island, Folly Beach and Mt Pleasant as well as homes downtown Charleston SC that exceed $3Million.  Click see the latest updates on interest rates and lowest current mortgage rates.



Charleston, SC mortgage Loan Officerjumbo mortgage loan is one where the amount borrowed is above conventional conforming loan limits. This standard is set by the two government-sponsored enterprises Fannie Mae and Freddie Mac, and sets the limit on the maximum value of any individual mortgage they will purchase from a lender. Fannie Mae (FNMA) and Freddie Mac (FHLMC) are GSEs (government sponsored entities) that purchase the bulk of U.S. residential mortgages from banks and other lenders along with the FHA, allowing them to free up liquidity to lend more mortgages. When FNMA and FHLMC limits don’t cover the full loan amount, the loan is referred to as a “jumbo mortgage” in which private investors are in the marketplace to provide these necessary funds. The average interest rates on jumbo mortgages are typically higher than for conforming mortgages due to the inherent risk the investors are taking on riskier backed assets. On October 1, 2011 the jumbo conforming limit of $729,750 in “high cost” areas was reduced to $625,500.As of 2010, the limit on a conforming loan in “general” areas was $417,000 for most of the US, apart from Alaska, Hawaii, Guam, and the U.S. Virgin Islands, where the limit was $625,500. The limit in “high cost” areas was $729,750 and $938,250, respectively.



Jumbo mortgage loans are a higher risk for lenders. This is because if a jumbo mortgage loan defaults, it may be harder to sell a luxury residence quickly for full price because less of the population can afford pricier homes. Luxury prices are more vulnerable to market highs and lows in some cases. That is one reason lenders prefer to have a higher down payment from jumbo loan seekers. Jumbo home prices can be more subjective and not as easily sold to a mainstream borrower, therefore many lenders may require two appraisals on a jumbo mortgage loan. The interest rate charged on jumbo mortgage loans is generally higher than a loan that is conforming, due to the higher risk to the lender. It can be more expensive to refinance a jumbo loan due to the closing costs, because taxes, insurance and other related costs are so much greater.  Some lenders will offer the service of an extension and consolidation agreement, so that a jumbo refinancer will not have to pay for mortgage tax again on the same principal balance. In other cases, title insurance companies will offer up to a 50% discount, often required by law for those refinancing within 1 year to 10 years. The largest discount is for refinancing within one year. Some consumers seeking a jumbo mortgage choose to seek advice from a competent professional familiar with jumbo mortgage loans.


OPTION 2 – Some investment brokers and/or large investment firms will lend money to their clients for jumbo luxury loans but secure it against liquid assets they manage for them. Often times these loan are lower in cost since their is collateral backing the loan to the borrower.

Improvement Continued – Sales Still Rising

As reported by CNBC on Thursday new construction home sales were the best on record since 1963. Sales of new homes rose in April to the second highest level since the summer of 2008 while the median price for a new home hit a record high, further signs that housing is recovering. The median price of a home sold in April was $271,600, the highest level on government records going back to 1993. The April price was 8.3% higher than in March and 13.1 percent higher than a year ago. With the April increase, sales are now 29% higher than a year ago, but sales are still below the 700,000 level considered healthy by economists.How’s this translate for those of us in Charleston, South Carolina? According to USAToday, Sales in the South were up 3% but sales fell 16.7%. Sales of previously owned homes rose in April to a seasonally adjusted annual rate of 4.97 million, the highest level in 3½ years.As the supply of available homes to buy remains tight this trend is likely to continue through the foreseeable future. Applications for permits to build homes rose in April to the highest level in nearly five years. While construction of new homes dipped a little in April, the drop came one month after construction topped 1 million for the first time since June 2008. Several major homebuilders have told of strong annual increases in orders for the first three months of the year, others, said that orders in April jumped 59% from a year earlier.
Some Content Courtesy of USAToday.com

Charleston, SC Real Estate Market Inventory

In the last few months most the nation is seeing a seller’s market, and all agents know the rules of supply and demand which can only be one thing. Lack of supply, but where has it gone? It’s not like the real estate market is booming, or the economy for that matter to justify this seller’s market. I am a real estate agent in Charleston, SC and I can attest that there is far fewer homes on the market here locally then has been the case of the last few years and buyers are finding it much harder to find the home they want.So let’s break down the most probable reasons why this is:1.) The government backed HAMP (Home Affordable Mortgage) Program is the likely culprit for most of the shortage. This program allows many borrowers that were struggling to modify their loans more easily thus resulting in far less foreclosures and REO properties available for purchase.2.) Upside down homes – Homes that are underwater where the borrower owes more than it’s worth. These home owners can afford their payments, but due to the fact they owe more than the market allows them to sell their home for results in them just staying in the property.3.) Slow foreclosure processing time – The homes that are being foreclosed on have to go through a litany of  rules, steps and procedures before the bank can legally take possession and this process takes a long time for municipalities, and the dept. handling the paperwork.4.) Investors – A lot of the homes that were and are coming on the market are being snapped up by cash investors that are planning on sitting on the homes as leases until the market rebounds which will likely be many years to come.Charleston, SC real estate inventorySo what’s this mean for buyers and lookers? The obvious answer is rising prices which has been the case for months now. Secondly, according to National Assoc. Realtors 60% of all sellers last year offered concessions to attract buyers.  With it being and strengthening into a full on seller’s market you will likely see this incentives quickly disappear.New Home builders  are seeing a much higher demand for new construction which makes them happy. So much so that many of them are getting back into the spec market instead of contract only builds.Here locally the Charleston SC real estate for sale has certainly shrank and buyers that have been looking are feeling the pinch of less inventory and increasing prices. So; to the sellers that have been sitting on the side lines, I suggest you revisit the idea, and to buyers..If you continue to wait, it will likely get worse so make a decision already.On the bright side these conditions make for a more balanced market then we have seen in the last few years. Barring any further restrictions and increasing in mortgage rates things are moving in the right direction.

5 Steps to a Successful Short sales & Foreclosures

Charleston SC Short SalesBuy a short sale can be a very exciting thing when you are someone who is price conscience because you feel you are getting a deal, but WAIT. Buying a Charleston, SC short sale or anywhere is not an easy process and you must be patient and be prepared to deal with a lot of annoying bumps in the road. When buying a distressed real estate property in Charleston, SC or wherever in the United States buyers must beware that it isn’t a simple and quick process and many times the bank will make you sit and wait for months or years. The reason why is because they are trying to see how many offers they can get before they are forced to decide on one. Once they are convinced they have gotten all the available offers in, will they decide on them. In most short sales there is a standard disclosure from the seller’s bank that says essentially, “we don’t care about what you want, you buy the house on our terms, and we owe you nothing.”  You think I am kidding, but I am serious. They do things on their terms, and their time frame, and you either play by their rules or don’t buy the house. Key #1:The listing agent must know the proper step-by-step process for shorting various types of loans, as the process for shorting an FHA loan is different than the process for shorting a VA or Conventional loan.Key #2:The listing agent must know what documentation is required to make up a complete short sale package for the lender they are working with and how to submit that package in a format that will get the lender’s attention, satisfy their requirements, and get an approval. There are many many more disclosures that are required when entering into a short sale transaction, but considering that this has become so common place most attorney’s and agents are aware of them. Verses a few years ago when transactions like these were “new” to most of us.Key #3:The listing  real estate agent must know how the lenders calculate what they have to “net” in the short sale transaction, so that they can then effectively price the property in MLS to generate an offer that will be relatively quick, but sufficient to meet the lender’s requirements, as well as cover all of the seller’s closing costs and the broker commissions. Often times most banks have a negotiator that will help them see the benefits of the deal and be the middle man between the loss mitigation dept for the seller’s bank and the buyer’s.Key #4:The listing agent must know what terms the lender (sellers bank) will and will not approve in a buyer’s purchase offer. There is really no way of knowing this until you begin down the road of negotiations, and be prepared for the seller’s lender not to negotiate. Many times, you have to come with your best offer the first time, because if the property is priced low there will likely be a bidding war.Key #5:The listing agent must know how to establish his/her credibility and an effective rapport with the loss mitigation rep who ultimately holds the key to the short sale getting approved and closed.
Some Info From http://rismedia.com

Mortgage Lenders and Loans Might Get tougher – Not Just Charleston, SC

Charleston Mortgage Rates and New National Lending RulesThe Federal Reserve has held interest rates steady at near-record lows over the last several years in an effort to entice buyers into the market, and experts don’t expect serious increases in the rate this year. In fact, the central How Much House Can I Afford?bank said it would not raise short-term interest rates until the unemployment rate drops below 6.5%. Since September the Fed has been buying a total of $85 billion in long-term mortgage backed securities (treasury bonds) each month to help push down borrowing costs (mortgage rates). Part of that is the program known as Operation Twist, in which the Fed buys $45 billion in longer-term Treasuries and sells the same amount of shorter-term ones. As soon as the Fed stops doing this which will eventually happen rates will have to go up. “Mortgage rates were essentially at a generational low last year — they could move modestly higher this year, but it will be the second-lowest [rate] in 40-plus years,” says Yun, chief economist at the National Association of Realtors.The Consumer Financial Protection Bureau issued new qualified mortgage standards last week that detail criteria lenders must use to determine if a borrower qualifies for a loan.The rule states a qualified mortgage cannot include risky features such as extending beyond 30 years or include exotic terms like interest-only payments or negative-amortization payments, where the principal amount increases. Loans can’t carry fees and points above 3% of the total mortgage and limits the total debt-to-income ratio at 43% — which some worry will restrict credit and discourage home buyers at the lower-end of the income scale from seeking a mortgage. On the other hand, some experts argue the rule that mortgage payments don’t exceed 43% of a    borrower’s pre-tax income doesn’t go far enough.“That figure is still high, most borrowers meet that standard easily today,” says Jed Kolko, chief economist at online housing marketplace Trulia. “These rules are not primarily designed to change the mortgage market today, they are to prevent a repeat of the very lax mortgage rules we saw during the bubble.”Lance Roberts, CEO of Streettalk Advisors, would like to see the ratio fall to around 30-35% to help generate more savings, but there could be a downside to bumping up the requirement. “You are going to exclude more low-income and first-time home buyers from being able to buy a house, but that is OK…America is the only country in the world where the poor people live in a three-bedroom house with a pool in the  backyard.” Many feel that not everyone is meant to be a homeowner, and that “American dream” is what got us into this problem in the first place.Additional mortgage rules are aimed at curbing over-borrowing, but could make the process longer for potential home buyers and could prevent some potential buyers from being able to qualify for a loan.“The mortgage rates are very low, but only a few people are able to access that low rate,” says Yun. “A modest increase in mortgage rates may not be harmful, provided that there is a return to more normal underwriting standards.”

Content By: Foxbusiness.com

Charleston Real Estate Market Stays Strong

Existing-home sales waned in December but tighter supplies of homes for sale continued to send prices up around the low-country, the Charleston Trident Association of Realtors reported Tuesday. Total existing home sales declined 1% in December adjusted downward in November. They were 12.8% above December 2011 levels. Pent up demand is sustaining the recovery in the market, which started to take hold last year, says Mount Pleasant, SC realtor James Schiller.” Record low mortgage interest rates clearly are helping many home buyers, but tight inventory and restrictive mortgage underwriting standards are limiting sales,” he said.Latest Charleston Real Estate Market The inventory of homes for sale continued to shrink, down to a 4.4 month supply in December based on the month’s sales pace. That’s down from 4.8 months in November and is the lowest level since May 2005. Realtors consider a 6-month supply to be a balanced market between buyers and sellers. Homes are selling faster than a year ago. According to NAR, 31% of all homes sold in December were on the market less than a month. The median time on the market for all homes was 73 days last month compared with 99 days in December 2011.  Single-family home sales slipped 1.4% to a seasonally adjusted annual rate of 4.35 million in December from 4.41 million in November, but are 11.5% above the December 2011 pace, NAR says. The nation’s median existing single-family home price was $180,300 in December, up 11.5% from a year ago whereas, here in the Charleston SC market home prices are up 4.4% to over $190,000.  Median prices are affected by the mix of homes sold and can go up or down depending on whether higher-priced homes make up more of the market.Distressed homes — foreclosures and short sales — accounted for 24% of December’s sales, down from 32% in December 2011. Foreclosures sold for an average discount of 17% below market value while short sales went for 16% under market value. Short sales are homes that are sold for less than their unpaid mortgage amount. Market researcher CoreLogic, whose data includes repeat sales of like homes, says home prices in November were up 7.4% year over year.A shrunken inventory of homes for sale in Charleston, SC— and less distressed properties on the market — have helped lift prices. Improving job growth, low interest rates and rising prices are convincing more people that the market has bottomed and that it’s time to buy. While new home construction is still far from healthy levels, home builders started work on homes in December at the fastest pace since the summer of 2008, the Commerce Department said last week.Home builder sentiment in January remained at a six-year high but didn’t move higher as it had in previous months, the NAHB/Wells Fargo Housing Market Index also showed last week. CoreLogic expects national home prices to rise 6% this year, on top of a 7.5% increase last year. Yet the tight supply of homes for sale is a big concern in many markets where rapidly shrinking inventories are leading to multiple offers and higher prices. 
 According to USAToday.com

Seller’s Market in Charleston, SC?

By most accounts Charleston, South Carolina has been the one glimmer of hope throughout the country in the housing sector. We have been on top of the housing recovery almost from the start. If you live here then you are not surprised by this. The area’s most populous county accounted for 502 homes sold, 57 percent of all homes that changed hands last month within the three counties, according to the Charleston Trident Association of Realtors’ monthly home sales report released Wednesday. SEE LATEST CHARLESTON, SC MARKET STATS.Charleston, SC home sales are on the rise —->Berkeley, Charleston and Dorchester counties combined for 876 sales in September, 13 percent more than the same month a year ago.

Seller’s Market in Charleston

The association’s monthly reports have been showing encouraging residential real estate trends since the fall of 2011. Sales have been rising, inventories have been falling and the uptick in median sales price suggests that broader real estate values are starting to rise.The Charleston area sold 7,879 homes through September, a nearly 11 percent increase compared to the same period a year ago. The median sale price also has risen to $190,000, up from $179,850 a year ago, according to the association.Charleston County also is leading the charge in slimming the average number of days a property sits on the market before being sold, bringing it to some of the shortest spans since before the last recession. All three counties averaged house listings before sold in 100 days or less on average. In Charleston the average was 87 days.Charleston SC home builders even have reason to be excited as  national new homes at an annual rate of 750,000, up 29.1% compared with a year earlier. They applied to build another 803,000 new homes on an annual basis, a 24.5% jump compared with August 2011.Home builders have become increasingly bullish — a confidence index from the National Association of Home Builders reached its highest level since June 2006. 
Excerpts by the Post and Courier used: