On April 1st 2014, changes to Fannie Mae's guidelines will cause loan interest rates to increase and credit to be evaluated differently. The change in credit evaluation has to do with new tiers of credit, which will be added to the top end of the scale.

Today the main tiers of credit are: less than 620, 620-640, and 740 or more. Each one of these tiers can increase or decrease a borrower's interest rate and closing costs.

With the update, there will be 4 new tiers of credit above 740. Unfortunately, those with higher credit scores will be the most affected - with a rate increase of 1.5% for some loans.

To research further, please see the tables created by Fannie Mae here.

Trey Linder

Movement Mortgage

Loan modification is one of the debt relief options that can help you manage your mortgage. If you miss payments on your home loan, or if you are in default, the lender can opt to foreclose. It is through loan modification or mortgage modification that you may be able to save your home.

Changes in the Term

Any changes done to the original term of the loan is known as loan modification. When you cannot keep up with the current payments on your home loan, you can opt for mortgage modification. With mortgage modification you can potentially lower the interest rate and change the time frame within which the loan will have to be repaid. 

Furthermore, you can get other repayment options like that of a lowered principal amount. In order to take advantage of these options, you will have to negotiate with the lender. You will have to let the lender know the problems you are facing and provide proof of your financial hardship. The lender may agree if they determine they will save money on this method versus foreclosing on your home.

There are also government approved loan modification programs, and these are easier than the standard modification programs. The government approved mortgage modification program is known as HAMP or the Home Affordable Modification Program.

To Apply for Loan Modification:

1. Find out if you are eligible for the modification - Some of the eligibility factors are loan balance, the condition and value of your property, the time you have been facing financial hardship, and the investor guidelines with regards to the person who owns the loan. Furthermore, in order to be eligible for the modification, you will have to show that you are experiencing financial hardship. You will have to provide documentation and mention that you would like to retain the home.

2. Provide required documentation - You will have to provide the required documentation to your lender. This includes your income, your bank statements, copies of your pay stubs, and so on. You will also have to provide most recent statements of your bank accounts, CDs, bonds, IRA and other retirement accounts.

Cary's housing market is still a step ahead the rest of the triangle with only 2.8 months of inventory (a seller's market). Closed sales are up 30% from last year, which is a huge increase. The list price to sale price ratio is up 2% to 97.3%, as more multiple offer situations occur and buyers are able to negotiate less.

This coming spring will be extremely busy, as strong buyer demand meets a low supply of homes for sale in Cary. If you are a buyer looking to purchase during the spring market, be ready to act fast. Though there will be more homes coming on the market in the spring than in the slow winter season, the best homes will still go into multiple offers and sell within the first few days on market.

The housing inventory in Durham is now down to 4.5 months of supply and we are in a seller's market. A balanced market would have 6 months of inventory, which is where we were 1 year ago. Less options mean more buyers are competing for the same houses, and this gives rise to multiple offer situations.

Days on market has been reduced to 92 days versus 115 days, and the list price to sale price ratio has increased from 96.8% to 97.5%. Due to the small sample size for just the month of November, please also look at the year to date numbers (larger sample size means better data). Selling a home in Durham this year has definitely been easier than in 2012. I expect homes for sale in 2014 to show an even stronger market.

Raleigh continued to show strong signs of improvement with an inventory reduction to 4.3 months - a seller's market. This time last year we were in a balanced market, with close to 6 months of inventory. 

Homes for sale in Raleigh were on the market less - 84 days on average versus 115 days a year ago. They also sold for more money and closer to the original asking price.

Here are some key points from the recent TARR Housing Market Report on Luxury Homes, which compared the third quarter of 2013 to the third quarter of 2012:

What happened with luxury home closings?
Year to date closings were up 40%, quarterly closings were up 41%, new home closings were up 63% and resale closings were up 34%. There were 35 closings sold at 1 million and above during the quarter, compared to 25 in 3Q/12. The months of supply of luxury homes based on quarterly closings is 7 months, compared to the 9 month supply at the end of 3Q/12.

How long are luxury houses taking to sell?
The average days on market for all luxury houses was 106, compared to 144 during 3Q/12.

Is initial list price important in the luxury segment?
As with any other segment in our market, the correct initial pricing of a listing is very important. Quarterly closings where the original list price was equal to the final list price sold in an average of 78 days at 98% of list. Quarterly closings where the original list price was higher than the final list price sold in an average of 184 days at 94% of original list.

By: Stacey P. Anfindsen with S.M.A Publications, Inc.

Students often want to buy a condo or townhome versus paying rent, especially if they are in a long degree program. Some students become landlords, renting out the other bedrooms for additional income.

Some of the advantages of owning include:

-You can make changes or upgrades to a home to make it yours, and these changes would add to the property value. 

-The property will appreciate over a long period of time, especially if you decide to keep the home after you are finished with school (either as a rental or otherwise).

-You will enjoy tax benefits, including the ability to deduct mortgage interest and property taxes.

There are also disadvantages to owning, which include:

-If you own, you must take care of maintenance items or hire someone. With a townhome or condo, the exterior maintenance is covered by the home owner association, but this still leaves interior items like plumbing leaks and appliances.

-There are taxes and home owner association fees that must be paid on a monthly or yearly basis.