Charlottesville Real Estate Blog

Guest Post
By Larry Saunders
Loan Officer with Mahone Mortgage, LLC.

On the front page of the Washington Post (February 23, 2008), there was feature article about homeowners losing their equity lines. I brought this issue up during the past week on this blog and now it is making news in a major publication. This type of information is very helpful to know so that homeowners can make informed decisions. In this article there is a quote from a homeowner who says “I thought I was too smart for this to happen to me”. I strive to provide useful information that is important when making decisions about real estate financing and will keep you updated as the home finance market changes. It is also important consumers read and understand what many in our industry consider to be “boilerplate” terminology like “deterioration of the value of the asset or the value of the collateral“.

Do you have a HELOC? If so, what has been your experience with your HELOC in light of what many lenders are considering a declining market?

Helping you make smart decisions about your Charlottesville home financing options,

Larry Saunders
Mahone Mortgage, LLC.
685 Berkmar Court
Charlottesville, VA 22901

If you have a specific question about home equity lines of credit, you may leave a question here in the easy to use comment box or you may email Larry direct at larrys@mindspring.com.

Larry’s website is : www.larrysloans.com

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Guest Post
By Larry Saunders
Loan Officer with Mahone Mortgage, LLC.

Variety of Uses for HELOC’s

For many reasons, the Home Equity Line of Credit (HELOC for short) has been a very popular method of borrowing money over the past several years. Banks made it very easy for homeowners to set up this type of home loan over and above their existing first trust loan in any amount from $10,000 on up to 100% of the market value of the a home. This type of loan can generally be arranged quickly with little or no closing costs and the interest rate is lower than many credit cards and car loans. People also like that the interest on a HELOC is tax deductible (well, for most people, anyway).

HELOC’s Provide Ready Access to Cash

The interest rate on a HELOC varies over the life of the loan. Whenever the Prime Rate goes up or down, the interest rate on this type of home loan also goes up or down. In return for taking on the risk of a variable interest rate, a homeowner using a HELOC can withdraw any portion of the approved loan amount for any purpose and pay back the borrowed money whenever they want and then do it time and again. This enables a borrower to have ready access to plenty of money for whatever they want, whenever they want to use it but not have to pay interest on it when they don’t need it.

Read the Fine Print!

Most borrowers who have set up a HELOC assume they have access to the full amount of the Line of Credit for which they were approved. However, it would be a good idea to check the fine print of your loan documents because in the fine print for a HELOC, the bank has the right to NOT provide additional funds if, in the bank’s opinion, the market value of the property secured by the loan has decreased in value. This is exactly what is happening in some parts of the country. The nearby Washington Metropolitan Area is currently defined by Fannie Mae and Freddie Mac as being in a “declining market”. Some banks in these ‘declining’ areas are refusing to advance funds to some borrowers even when the borrower has not withdrawn the full amount of their “approved” loan amount.

Smart Access To Your Money Tip

Fortunately, the Charlottesville real estate market is not defined as a declining market. However, if having access to all the funds in your approved HELOC is important, you might want to consider drawing on those funds now just to be on the safe side. You’ll be paying interest on the borrowed funds, but that will be offset by the peace of mind knowing you have access to the amount you were expecting.

Helping you make smart decisions about your Charlottesville home financing options,

Larry Saunders
Mahone Mortgage, LLC.
685 Berkmar Court
Charlottesville, VA 22901

If you have a specific question about home equity lines of credit, you may leave a question here in the easy to use comment box or you may email Larry direct at larrys@mindspring.com.

Larry’s website is : www.larrysloans.com

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Like The Weather - Real Estate is a Local Concept

Charlottesville real estate isn’t in located Chattanooga or Portland or Austin or Detroit… it’s in Charlottesville, VA and in the spectacular county of Albemarle (where you will find the home of Thomas Jefferson just minutes from downtown) with the Blue Ridge Mountains and Wintergreen Resort real estate just 30 minutes to the West. And, just like the weather, all real estate is local and today is no exception.

Our 2007 Down Market - The Fourth Highest in History!

The Charlottesville real estate market is and always has been unique and this past year, where we just recorded our fourth highest sales total in the history of our MLS, puts this truism in perspective. That’s right, in the “down” Charlottesville real estate market of 2007, we recorded our fourth highest sales total in the history of our MLS. It is our unique quality of life that ensures the resilience of our marketplace and sustains the long-term desire for people to live and own real estate in the area. By living here, residents are able to share in the area’s beauty and special history. Monticello along with Ash Lawn, Montpelier and Mount Vernon, homes of four United States Presidents, are less than 30 minutes from Charlottesville (Mount being the exception at 90 minutes) and are great examples of some of the historical treasures that capture the imagination of natives and newcomers alike.

Basing Your Charlottesville Real Estate Decisions on the Facts

So what does the fourth highest sales total and a “down” Charlottesville real estate market look like? In 2007, there were 3,560 homes sold in our Multiple Listing Service (MLS) reporting area which, on the heals of the 2003 market, would have been a record setter, but on the heals of the 2006 market, represents approximately a 20% decline in total sales. As I mentioned in my recent post “Who Would be Dumb Enough to Buy a Charlottesville Home Now?“, our marketplace has been inordinately constrained by the mass media coverage of the credit crisis. As soon as the news coverage is behind us, there will be a discernible upswing in buyer activity as opportunity becomes reality for many savvy home buyers. Sellers are getting smart and adjusting their pricing to 2004 levels; there are great values in the marketplace; interest rates are favorable; and, the sanguine beauty and historic treasures of Charlottesville and Albemarle County continue to beckon.

What is your perception of the Charlottesville real estate market?

What impact has our “down” 2007 market played in your “local” real estate decisions? Has the national media buzz kept you parked on the sidelines waiting to “time” the market? Do you have a question about the state of the local Cvill real estate market? Be the first to comment - it’s easy!

Until my next post,

Brian
Your Charlottesville Real Estate Resource

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