865 Real Estate

East Tennessee Real Estate & Neighborhood Source

Knoxville Real Estate: Checking Your Credit Could Approve Your Loan

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credit reports and Knoxville real estateTroy Stavros, Broker and Partner with the 865 Real Estate team stated, “In today’s home buying process, with the current stringent lending guidelines, a client’s credit score plays a pivotal role in whether or not they will be approved for a loan on Knoxville real estate. One error on a client’s credit report can be the difference between being approved or denied a loan. That is why it is so important that each person obtain and review a copy of their report each year, giving them to ability to find and correct errors effecting their credit score.”

The Consumer Financial Protection Bureau (CFPB) released a report revealing only one in five people actually obtain a copy of their credit report each year. The report also stated, in 2011, consumers reached out to credit reporting companies about 8 million times to challenge information on their report. Overall, the actions led to 32 to 38 million disputed items.

Stavros said, “When looking to buy Knoxville real estate, the instances of being able to get a mortgage with less than stellar credit are behind us.” A recent report by Ellie Mae, which represents 20 percent of all U.S. mortgage originations, found the average FICO score for a closed loan in October was 750, while the average denied loan had a score of 706. Once approved, the effect your score has on your loan doesn’t stop. A loan savings calculator provided by myFICO, the consumer division of FICO, shows how credit scores can effect the interest rate one would receive on a mortgage. As of December 14, 2012, a person with an average FICO score of 760-850 would receive a 2.975% rate on a 30-year fixed rate mortgage. However, if one had a score of 620-639, the rate would be 4.564%.

According to Stavros, “Just because you aren’t planning on purchasing any Knoxville real estate this year doesn’t mean you shouldn’t be reviewing your credit report. Oftentimes it could take months to get an error off your report. With your credit score being one of the most important tools in getting a loan approval, it’s best to always keep it sharp. For current homeowners it also is a major part of refinancing. Not a homeowner? More and more employers are looking at a prospective employees credit report before hiring. Yearly review is just good practice all around.”

Knoxville Real Estate: Incredible Mortgage Percentages MUST READ!

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incredible mortgage facts for Knoxville real estateIn today’s Knoxville real estate and mortgage markets we are seeing affordability and purchasing power like no other time in history. When rates are at historical lows, as they are now, they expand the home buyers purchasing power. While home prices have been low as well, the ultimate factor to purchasing power in the Knoxville real estate market is low mortgage rates. A perfect example of this is the fact that home prices are up nationally from one year ago, yet affordability is better. Why? Low mortgage rates.

Within the last week, rates on a 30 year fixed mortgage saw a new all time low at 3.32%. A recent article by Dan Green, of Waterstone Mortgage stated, “Since 1971 — a span of more than 500 months — the 30-year fixed rate mortgage rate has averaged 8.75%. You can buy 81% more home in 2012 for the same monthly payment as compared to the average of the last 40 years. Even as compared to one year ago, home buyer purchasing power is higher by 9.7%.” Wow, 81%, now that is some difference in purchasing power!

The second surprising percentage comes when looking at the difference between a 15 year and 30 year mortgage. While the big news usually focuses on the 30 year rate, according to Freddie Mac’s most recent weekly mortgage rate survey, conforming 15-year fixed rate mortgage rates and conforming 30-year fixed rate mortgage rates are both at their lowest levels in history.

Green also shared the following statistics. For those home buyers or home owners that can handle the extra monthly payment that a 15 year mortgage entails, they have the ability to save 63% in mortgage interest costs when compared to a 30 year mortgage. Yes, you read that correctly, 63%! For example, a homeowner in Knoxville, TN using a 15 year fixed mortgage at the $417,000 conforming loan limit would pay $88,000 in mortgage interest over the life of the loan. Utilizing a 30 year mortgage, the same homeowner would pay $242,000. Nearly triple the amount!

Troy Stavros, Broker and Partner with the 865 Real Estate team stated, “Information like these two surprising percentages shared with us by Dan Green of Waterstone Mortgage, remind us how important it is to have trusted experts working for you. Going through the home buying process alone, thinking you know all the answers, is the surest way to get yourself into a heap of trouble. Seek out professional advice so you can make an educated decision. A home is a huge investment that you shouldn’t just cannonball into.”

Effect of Neighborhood Foreclosures on your Knoxville Real Estate Value

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Knoxville foreclosuresWhat is the effect of neighborhood foreclosures on your Knoxville real estate value? Coming out of the harshest national housing downturn many homeowners have seen, we have all heard about the multitude of foreclosures that have taken place all across the United States.  Knoxville real estate, while not hit as bad as many areas in the U.S., was not completely immune. Many families have been impacted directly by the loss of their home and the severe financial consequences that are introduced through the loss of what typically is their largest investment. These losses including but not limited to the extreme downgrading of their credit, loss of savings and retirement,  and physical eviction.

But are there consequences to those families who live near those foreclosures? You might think yes, of course if there are large quantities of homes being foreclosed in the same neighborhood then there will no doubt be loss of tax revenue and the surrounding homeowners or homeowners association will incur costs to remedy those visible maintenance issues that so often go hand in hand with abandoned/foreclosed properties.

However, for this discussion we are most interested in the effect on homeowners living in close proximity to a Knoxville foreclosure and their ultimate loss through a depreciation in the value of their home.  Researchers from the Center for Responsible Lending produced a report on this home depreciation caused by nearby foreclosures.  Using data from the federal government as well as Lender Processing Services, they were able to calculate the loss in value of homes within a 1/8 of a mile proximity to a foreclosed home.

Their findings show that in all neighborhoods, the loss in value of homes within the 1/8 mile proximity equals 7.2 percent.

As we tell our clients daily, there are many factors that effect your home’s value.  You must be sure to take them all into consideration when you are looking at Knoxville homes for sale or selling any Knoxville real estate.

If a tree falls over your property line and no one is around to hear it… Who Pays?

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If a neighbor’s tree falls over your property line, file an insurance claim for repairs and cleanup. No house damage? Check if chopping and hauling debris is covered.

When a tree falls

Your neighbor is responsible when a tree falls over your shared property line only if you can prove he was aware that his tree was a hazard and refused to remedy the problem. Regardless, your insurance company restores your property first, and later decides whether or not to pursue reimbursement from the neighbor or his insurer if the neighbor was negligent in maintaining the tree.

Before a tree falls

Write a letter to your neighbor before his dead, diseased or listing tree falls through your roof or over your property line.

The letter should include:

  • Description of the problem
  • Photographs
  • Request for action
  • Attorney letterhead–not necessary but indicates you mean business.

Trim their trees

If the limbs of a tree hang over your property line, you may trim the branches up to the property line, but not cut down the entire tree. If a tree dies after your little pruning, the neighbor can pursue a claim against you in civil or small claims court. Depending on the laws of your state, your neighbor may have to prove the damage was deliberate or caused by negligence, but may also be able to recover up to three times the value of the tree.

Before you cut, tell your neighbors what you intend to do to protect your property. They may offer to trim the whole tree instead of risking your half-oaked job.

Your tree falls

It’s always a good idea to take care of your big and beautiful trees, and keep receipts for trimmings and other care.

But if your tree falls over a neighbor’s property line, do nothing until their insurance company contacts you. You may not be liable unless you knew or should have known the tree was in a dangerous condition.  If you pruned a tree or shored up trunks to prevent problems, gather your receipts to prove your diligence.

By: Ann Cochran

Published: March 23, 2011

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