Buy A Home – First Bank https://localfirstbank.com North and South Carolina Community Bank Thu, 19 Jul 2018 17:32:54 -0400 en-US hourly 1 4 Common Costs Of Renovating An Older Home https://localfirstbank.com/article/4-common-costs-of-renovating-an-older-home/ Thu, 15 Jun 2017 13:13:03 +0000 https://localfirstbank.com/?post_type=article&p=9868

Older homes appeal to a number of home buyers. They tend to be located in great locations, are durable, come at a good price and have original features that are not found in newer houses today.

However, they may come with some problems that need to be addressed before moving in. Homes that are built before 1990 tend to be considered older, while homes built before 1920 are sometimes referred to as antique.

Whether it’s a simple fix or a big project, the cost can add up quickly. Before you decide to make the purchase, you should know how to identify potential red flags and estimate the total cost of the renovation.

What To Look For

Foundation Problems

The most costly repairs are found when there are problems with the foundation. Depending on the type of ground the house lays on, various problems can occur. Usually unstable ground, any seismic activity, and lots of moist soil over a period of time can lead to problems.

What to keep in mind:

  • Are there major cracks?
  • Is there unevenness in foundation walls?
  • Are there cracked tiles or concrete floors?
  • Look for floors that are not level.
  • Look for stuck windows and doors that fail to latch.

Estimated cost: if there are repairs or a replacement needed to the foundation, costs can quickly skyrocket up into the $20,000-$30,000 range. It is important to factor these costs into the final price of the house when looking at an older home with structural damage.

Plumbing

When searching for an older home, one should ask the previous owner or Realtor about the plumbing system. Knowing how old and what type of pipes are in the house can be handy information. Brass, copper, and PEX pipes can all last an average of around 50 years. However steel and polybutylene pipes can wear down in as little as 20 years and have more problems.

What to keep in mind:

Estimated costs: it is not uncommon to ask for the previous owner to reduce your price of the cost to replace polybutylene pipes. However, if you are paying for it yourself, whole-house pipe replacement can cost anywhere between $2,000-$5,000 depending on how many pipes are in the home.

Hazardous Materials

Three hazardous materials to know before you buy an older home are asbestos, radon, and lead. All 3 are more common in older homes and can lead to serious health consequences if not taken care of.

Asbestos is a naturally occurring material that was used commonly as insulation in walls, pipes, and homes before the 1980s. If asbestos is enclosed properly and not exposed to the open air, it is harmless. When exposed, the asbestos fibers cause myriad health problems such as mesothelioma.

Lead, which is particularly hazardous for children, can be found in paint and plumbing systems of a home built before the 1980s. And radon is a radioactive type of gas that occurs naturally from the type of bedrock the house is built on and can cause lung cancer over long periods of exposure.

What to keep in mind:

  • The type of paint used in the exterior and interior of the home.
  • Look for exposed, crumbly asbestos in insulation, pipes, and ceilings.
  • Buy a radon test-kit to test for radon in your home.

Estimated costs: you can buy home testing kits for radon and lead to check the levels in the home. If radon, lead, or asbestos is present, it would be best to hire a professional to remove it. Lead paint removal can be done for between $8 to $15 per square foot on average. Radon can be handled for an average cost of $1,300 per home. Depending on the size of the asbestos, a wall or pipe system can cost anywhere between $750-$1,200. However, a whole house project removal of asbestos can run as steep as $18,000.

Electrical

Electrical fires, shocks, power failures, and shorts are all at an increased risk when buying an older home. And keep in mind, those houses also contain fewer outlets throughout the home, which can be a problem with all the technology we use today.

It’s important to find out the age and condition of the wiring in the home you are looking at.

What to keep in mind:

  • Look for exposed wiring out of walls and outlets.
  • Will you need to add any outlets?
  • Is there any water damage?
  • The age of the wiring used.

Estimated cost: since electrical work is dangerous, it is best to contact a local, licensed electrician, who may charge anywhere between $50-$100 an hour.

After that, the price is dependent on how many outlets, breakers, or panels need to be addressed or installed. The cost is $50-$100 per outlet, breakers are anywhere from $5-$30 dollars, and a new service panel can be the most expensive at anywhere between $200-$500 plus labor.

Don’t get overwhelmed by the list of frequent repairs above. It can still be truly beneficial to purchase an older home, but you’ll need to invest to fix the problems. Seek out skilled professionals and work from quality local resources. Before you know it, you’ll have the home of your dreams.

Ready to get started? We have great options for mortgages, including construction loans.

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The Top Home Remodeling Trends of 2017 https://localfirstbank.com/article/the-top-home-remodeling-trends-of-2017/ Tue, 21 Feb 2017 15:25:44 +0000 https://localfirstbank.com/?post_type=article&p=9439

Remodeling your home, or any home for that matter is a big investment. If you’re remodeling with the intention of selling soon, it’s critical to know where to allocate funds.

You’ll want to put your money in places where you get the highest ROI. Below you’ll discover not only where to remodel, but the hottest trends for 2017.

Attic Insulation

Attic insulation may not be the sexiest home remodeling trend on this list, but it does have the highest ROI. The average cost for attic insulation in 2017 is $1,343, but its resale value is $1,466. This makes the ROI 107.7%!

It may be shocking, but attic insulation will help keep your wallet warm when selling. If you’re looking to turn up your ROI, you can do it yourself, but read this beforehand.

Major Kitchen Remodel

This year may be the perfect time to remodel your kitchen. It doesn’t have the best ROI on our list (the national average in 2017 to complete this project is $62,158 with a resale value of $40,560 for 65.3% ROI), but it’s quickly moving up.

This means that if you can get it done soon, your ROI can significantly increase. Oh, and pay attention to the color of new appliances!

Entry Door Replacement

Probably one of the easiest on the list, simply replacing your entry door has the second highest ROI. The job costs about $1,413 with a resale value of $1,282, placing its ROI at 90.7%.

The catch: doors need to be steel. This is important because entry doors make first impressions. Wood or any other composite material won’t do.

Two-Story Addition

Need some more space and want to sell your home soon? This project may be just the ticket for you. Again, it’s not the highest on the list, but growth is key, along with asking the right questions.

The national average to complete a two-story addition is $176,108 with a resale value of $125,222 or a 71.1%. But this remodeling project has been on the upswing since 2015, so getting it done now may give you a higher return for when you’re ready to sell.

Manufactured Stone Veneer

While this trend is on a slight decline, it ranks as the third highest remodeling ROI. With a job cost of $7,851 and a resale value of $7,019, it’s an affordable project.

The ROI lies at 89.4%, but why the downturn? Manufactured stone veneer saw a slight price increase in materials, thus contributing to the decline, but if costs go back down, expect this to stay put or even climb higher in value.

Want to geek out some more over the ROI of remodeling ideas? Check out this handy site.

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The Right Age to Buy a House https://localfirstbank.com/article/the-right-age-to-buy-a-house/ Wed, 02 Nov 2016 14:25:36 +0000 https://localfirstbank.com/?post_type=article&p=9244

Although buying a house for the first time is a big decision, it turns out there is no perfect age to do it. When it comes to taking the plunge, it’s more about individual readiness.

You’re likely ready to buy your first home if you:

  • Have steady income.
  • Have saved enough for a required down payment and closing costs.
  • Have an emergency fund with three to six months’ expenses.
  • Have little or no other significant debt.
  • Plan to stay in the home at least three to five years to recoup initial expenses.
  • Have improved your credit as much as possible.
  • Can comfortably afford mortgage payments for homes in your desired location.

While there’s no “right” age, there are trade-offs between buying when you’re a young adult and waiting until you’re older.

Why buy a home earlier in life?

If you can swing it, homeownership in your twenties or thirties brings many advantages.

For starters, money spent on rent is lost forever, and you don’t even get a tax break for your trouble. When you buy a home, you’re actually investing in your future, potentially reaping a nice tax break for the mortgage interest you pay (be sure to talk to your tax professional to confirm any benefits to which you may be entitled).

Over time, you’ll build equity you can borrow against if necessary, and the value of your home may increase enough to bring a substantial profit when you sell. Or if you stay in your home long enough, you’ll pay off your mortgage completely and enjoy living free of that monthly payment.

Why wait, then?

Sometimes putting off home purchase can be a good thing, too.

When you’re in your middle years or older, chances are you’ll have a higher, steadier income and a better idea of where you’d like to settle down than when you were first starting out.

You’ll also leave yourself time to build excellent credit, which may qualify you for the best available mortgage rates and terms. Additionally, taking the years to save a large down payment improves loan-to-value ratio, making it easier to find affordable financing.

Not ready? You’re not alone

The Pew Research Center found that young adults are waiting longer on average to move out of their parental homes than they were a generation ago, with over 32% of adults aged 18 to 34 still living with their parents.

The increasing age of first marriage also comes into play. For the first time in more than 130 years, this demographic is less likely to be living independently with a spouse or partner than remaining in their parental home, according to Pew’s analysis.

First-home purchase age also increased slightly. Zillow reports that back in the 1970s, most first-time homebuyers were 29 to 30 years old and often married with a child. Today’s first-time homebuyers average about 32 years of age and are more likely to be single.

Roberta Pescow, NerdWallet

© Copyright 2016 NerdWallet, Inc. All Rights Reserved

But if you are ready

First Bank can help you decide if the time is right to buy by providing expert financial guidance and a wide variety of competitive mortgage options including conventional and government loans.

You can also schedule a free consultation with one of our knowledgeable mortgage loan professionals who can help talk you through the process and next steps.

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State of the Housing Market in 2016: Part Two https://localfirstbank.com/article/state-of-the-housing-market-in-2016-part-two/ Tue, 03 May 2016 14:25:38 +0000 https://localfirstbank.com/?post_type=article&p=5121

In Part One of this series, we examined the overall market shifts from sales volumes nationally to the demand for housing in North Carolina. Here we explore two more trends: the Baby Boomers taking over and interest rate implications.

Chapel Hill Realtor Kim Dawson, president of the North Carolina Association of Realtors, says North Carolina saw a lot of first-time homebuyers in 2015, along with empty-nesters looking to downsize and retirees moving in from the north, and she expects all of those groups to again comprise most of her buying clients this year.

Forecast: Graying Market

But nationally, homebuyers are becoming older. At the end of 2015, the share of first-time homebuyers was at an all-time low, having declined each of the past six years. After 5 consecutive years of job growth, Lawrence Yun, chief economist with the National Association of Realtors, thinks that trend will start to change this year, if only modestly.

It isn’t for a lack of desire among Millennials. In a December National Association of Realtors survey, 94% of renters age 34 and younger said they aspire to home ownership at some point in the future.

Millennials are increasingly attracting the focus of homebuilders. While addressing the National Association of Homebuilders’ annual conference in Las Vegas earlier this year, Dan DiClerico of Consumer Reports said Millennials have become the nation’s top home-buying demographic, outnumbering Baby Boomers 36 to 34%.

Contrary to stereotype, many are now earning high incomes and demanding larger homes than the industry initially expected. Most prefer city life but often must settle for the suburbs if that’s not possible.

Still, many builders continue to believe Boomers will drive most of their business.

“They are putting more money into their homes and building fairly substantial houses,” Pennsylvania builder Tim McCarthy told the Associated Press. “They are substantially better off than the rest of America. They are going to dominate the housing market.”

Forecast: Mortgage Origination Challenges

Nationally, married couples with dual incomes are buying the most homes, making their down payments and increasingly, paying for their entire homes, with cash proceeds from selling their previous homes, something they had long wanted to do but couldn’t until home values increased, says Adam DeSanctis, a National Association of Realtors spokesman.

Because of so many cash sales last year, purchase mortgage originations are forecast to increase 13% this year after rising 8% last year, according to the Mortgage Bankers Association. But because interest rates are expected to keep rising, refinancing volume is slated to drop 32%, after growing by 32% last year.

Combining both types of mortgages, total originations are forecast to decline by about $100 billion this year.

Michael Jablonski, executive vice president and director of mortgage lending at First Bank, says he relishes the challenge.

Despite the declining mortgage market, Jablonski says he is confident First Bank will accomplish its objective to grow its mortgage business. It’s becoming increasingly important with the decline in two other traditionally reliable revenue sources, transaction fees from credit and debit cards as gas prices have plummeted, and minimum deposit fees because people are saving more.

“We fully expect our volume at First Bank will improve as we continue to implement our (mortgage lending) strategy,” Jablonski says. “We fully expect to take market share from our competitors.”

Jablonski says First Bank will do that by offering competitive interest rates and emphasizing its wide array of products and services, in contrast to mortgage brokers who form a much more limited relationship with their clients.

“I love to talk about mortgages,” Jablonski says, “and the best way to talk about mortgages is through the delivery channel of a full-service bank, and through a community bank that is well-capitalized, strong and with a good culture that we want to employ in the community so that we can be successful.”

Ready to talk mortgages? Sign up today for a free consultation with one of our mortgage loan experts.

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State of the Housing Market in 2016: Part One https://localfirstbank.com/article/state-of-the-housing-market-in-2016-part-one/ Tue, 26 Apr 2016 14:15:18 +0000 https://localfirstbank.com/?post_type=article&p=5120

Despite coming off a solid sales year, Chapel Hill Realtor Kim Dawson isn’t quite certain what to expect in 2016.

On the bright side, she anticipates demand for housing in the Raleigh/Durham/Chapel Hill or “Triangle” area to remain strong. Employment continues to grow as the region recovers from the recession, and mortgage interest rates, while projected to rise slightly, remain very low by historical standards.

Forecast: Demand Outstrips Supply

The biggest challenge Dawson sees, and it’s a significant one, is finding enough homes on the market to meet demand. Like the rest of the nation, residential real estate in North Carolina has become a seller’s market.

“We had an agent the other day that had 18 offers in one day, which is just crazy,” says Dawson, who also serves as president of the North Carolina Association of Realtors.

Over the past decade, buyers grew accustomed to negotiating the best price possible, and if a home didn’t have what they wanted, they simply moved on to the next one. But Dawson is trying to convince her buyer clients that they’re in a different world now.

“If they find a home they like, they need to make an offer and it needs to be a strong one,” she said.

Homes in the Triangle are on the market for an average of 52 days, down from 60 to 70 days in 2014 and 2015. And that average is inflated by homes that aren’t in good condition, Dawson noted.

“They’ll sell their house fast if it’s decorated right, staged right and priced right,” she said.

Several trends have converged to tighten inventory across much of the state. Home builders, after drastically reducing output following the mortgage crisis, have ramped back up but are having trouble meeting demand.

Following the recession, many homeowners, unable to sell their homes, fixed them up instead and now are content to stay where they are.

Finally, the state has become a sort of victim of its own success. People migrate to the area for its mild weather, strong economy, top-notch health care and cultural amenities. Once they arrive, they want to stay.

Simply put, there just aren’t enough people wanting to sell. “If inventory improves, (sales) will be equal to or better than 2015,” Dawson said. “If we don’t get more inventory, it’s going to be a tough year.”

Forecast: Modest Sales Uptick

Nationwide, home sales grew 7% last year from 2014, the best year in nearly a decade, but are projected to rise by only 1 to 3% this year, says Lawrence Yun, chief economist with the National Association of Realtors.

Yun attributed the slower sales growth to home prices he predicts will start rising for the spring buying season, along with shaky global economic conditions, rising mortgage rates and sluggish GDP growth in the United States.

Stay tuned for Part Two in this series next week where we look at the graying of the market and mortgage origination trends.

Ready to explore a new mortgage? Sign up today for a free consultation with one of our mortgage loan experts.

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Your Home: Landscaping Trends in 2016 https://localfirstbank.com/article/landscaping-trends-2016/ Tue, 02 Feb 2016 15:21:38 +0000 https://localfirstbank.com/?post_type=article&p=4918

As the excitement of the New Year fades and the quiet of winter settles in, many homeowners begin to plan projects for the spring.

Long-time gardeners may curl up by the fire with their favorite seed catalogs while others scroll through Pinterest on their phone for inspiration.

No matter how long you’ve been in your home, there’s always room to add a few new design elements to your outdoor landscape.

On trend this year

As with every other industry, the movement to go green continues to rise in popularity as homeowners use organic techniques, as well as water-wise and native plants in their landscaping.

In fact, a survey from the American Society of Landscape Architects supports this movement nationwide, reporting last February that native plant projects account for 85% of consumer demand. Because these plants naturally thrive in the local environment, they are extremely low-maintenance and are an attractive option for busy homeowners.

Not sure where to begin or which plants are native to your area? “Your local extension office is a good resource for native plants, and one of the more underutilized,” says Ted Blackwood, owner of Blackwood Landscaping in Asheville, North Carolina. “These folks are master gardeners with years of volunteer experience, and they can also help you get free soil tests.”

Another option for DIYers is Facebook, where you can find groups focused on plant identification or weekend projects.

Out with the old

As 2015 came to a close, so too did outdated trends. According to Blackwood, “We’ve been ripping out trees that get too big. People are becoming conscious about plant size. When I first started, customers wanted instant gratification with big plants, but they grow so fast they take a lot of maintenance.”

Not only do consumers want fewer large trees, they also want less grass. “We’re doing less grass than we’ve done in the past. It uses so many chemicals and it’s not naturally occurring,” says Blackwood.

Boxwoods are also on the outs, with many people preferring different kinds of hollies.

Rest assured however, southern classics—like crepe myrtles and forsythia—never go out of style, with traditional varieties continuing to thrive throughout the Southeast.

Evergreen tips for the outdoors

Another au courant trend? Maintaining your curb appeal.

Not only will you keep your neighbors happy, you’ll also be ready to sell your home when the time comes. “A first impression is a lasting impression,” says Jamie Tingen, owner of Pistol Tingen Realty based in Greenville, NC.

When listing your home, he recommends quick fixes like adding a fresh layer of mulch outside, power washing your siding, and clearing the roof of debris. “The outside tells us a lot about the inside,” says Tingen.

Regardless of your time and budget there are plenty of ways to stay on trend when it comes to landscaping. Don’t be afraid to take advantage of your local resources and ask questions about what works for your area.

And if all else fails, there’s always Pinterest.

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A New Mortgage Loan Process is Here. Are You Ready? https://localfirstbank.com/article/a-new-mortgage-loan-process-is-here-are-you-ready/ Tue, 12 Jan 2016 15:00:54 +0000 https://localfirstbank.com/?post_type=article&p=4869

TRID (an acronym for the TILA-RESPA Integrated Disclosure Rule regulation) is a federal initiative that aims to streamline the mortgage loan process for borrowers that rolled out at the end of 2015. At its heart, it’s designed to help our customers know the ins and outs of their loans before they sign on the dotted line.

What It Does

Let’s dig into that more and break it down into TRID’s 3 major benefits.

First, TRID ensures that customers will understand more about the implications of different loan products, as well as anticipate issues if or when payment changes come up with something like an adjustable rate mortgage. This makes it easier to shop for your loan and to compare costs between providers.

Second, with consistent documentation across lenders and the other third parties involved (like lawyers and real estate agents), you’ll get to look at the true cost of your loan (no matter the provider), the credit commitment, and the cost of the overall transaction.

Third, it ensures that you have plenty of time before closing to view and understand the documents you receive. In fact, the new Closing Disclosure document—which tells you what the closing costs are and again, the total cost of the loan and what that looks like—is required to be given to the borrower at least three business days before the closing date.

There’s no wiggle room with that three days, and it doesn’t include the mail date. If you don’t have that closing document in hand for that window before your closing, it will not happen. Period.

While that might seem overly strict, it’s designed to put the power and appropriate information into your hands at a time when you’re making a large, and potentially life changing, decision.

What You Can Expect From Us

It also means that, in order to close on time and without complications, you and your mortgage professional need to work as a team to be on top of the many moving parts that are involved in a home loan, even more so than you and they might have been before.

Here are a couple of changes we’ve made to our processes to uphold our commitment to accountability and to delivering your loan on time:

  • Revise processes and paperwork to improve the mortgage loan experience and uphold the regulations laid out in TRID.
  • Clearly set expectations and communicate often with borrowers about what’s required, next steps, and any potential changes.
  • Partner with local real estate agents, attorneys, and others who are helping you with home buying or selling much earlier in the process so that so that all parties have the information needed to complete the documentation in time for the closing.

We want to get you to that point where you’re very comfortable; your loan is approved, you can start packing your boxes, and you don’t have to worry about anything. We’ll explain everything along the way to make sure the loan you’re securing is the best one for you and your family.

Bring These Items With You When You Apply

Having these documents in hand will help you and your mortgage loan team get a head start on the process.

  1. Paystubs (most recent)
  2. W2’s or 1099s if applicable (2 years)
  3. Tax returns including all schedules and K-1’s (2 years)
  4. Bank statements (2 months)
  5. Purchase contract on home being purchased
  6. Photo ID of borrowers

Paperwork Change Up

Common documents that you’ll no longer see:

  • Good faith estimate (GFE)
  • The TIL (Truth in Lending) disclosure

These are incorporated into one disclosure called the Loan Estimate, which will be provided at the front-end of the process.

At the end of the loan process, where you’re closing the loan, you’ll no longer see:

  • The final TIL
  • HUD-1 Settlement Statement

The document replacing those will be the Closing Disclosure. The Loan Estimate and the Closing Disclosure (CD) look a lot alike, so the borrower can take the Disclosure and set it up against the Estimate to see if all the costs they were told about stayed consistent.

Ready to get started or want to learn more about the mortgage application process? Get in touch with an expert today.

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The Sun Shines on North Carolina’s Solar Power Growth https://localfirstbank.com/article/the-sun-shines-on-north-carolinas-solar-power-growth/ Tue, 19 May 2015 18:49:09 +0000 https://localfirstbank.com/?post_type=article&p=4068

Thanks to 215 sunny days a year and solar-friendly regulations and tax credits, North Carolina is a great place for those who want to convert solar rays into electricity.

Currently, North Carolina is ranked fourth in the country when it comes to total solar capacity, according to the Solar Energy Industries Association (SEIA). Only California, Arizona and New Jersey have more. That means in North Carolina there is enough solar energy to power the lights, TVs, computers and other electricity-hungry portions of 104,000 homes, according to the SEIA.

Thanks to continued tax credits and dropping prices for sun-collecting solar panels, those numbers are expected to keep rising in both residential and commercial areas. “I really don’t see a slowdown in the near future,” says Lukas Brun, senior research analyst at Duke University’s Center on Globalization, Governance & Competitiveness. “It continues to become more cost-effective, and there are economic benefits and environmental benefits. Solar is becoming the best bet for many.”

Solar power has long been known to be more environmentally friendly than traditional ways of generating electricity. It is also renewable, unlike the finite amounts of fossil fuels that we have heavily relied on for decades.

But while sunshine is free, in the past the initial costs of getting set up to collect the sun’s rays and convert them to energy was prohibitive for many. Fortunately, the cost of adding solar panels to a home is now in line with home projects such as remodeling a bathroom or kitchen.

Not as costly as you might think

Brun, the lead author of a 2015 report that looked at the solar industry in North Carolina, said the cost has dropped due to lower material costs, improved manufacturing processes and economies of scale.

The price of installation has followed suit.

The SEIA reports the cost of installed solar photovoltaic systems nationwide has dropped by 49% since 2010. Add a 30% federal tax credit—which is set to expire in 2016—plus state incentives, and solar proponents say now is a great time to invest.

Solar photovoltaic (PV) devices are typically housed in panels and installed on roofs, awnings and other places that have unfiltered access to sunlight. PV devices generate electricity via an electronic process that occurs naturally in the semiconductors that are housed in the panels.

Steve Nicolas, president of Raleigh-based solar energy installer NC Solar Now, says adding solar power to the average home costs about $23,500. That includes installation, equipment, permits, etc., for a system that has a capacity of about 5.5 kilowatts—which on a sunny day can generate enough to supply more than half of the power a typical home needs.

Homeowners can expect to recoup the cost of a system in 6 to 9 years, depending of the tax credits they receive, Nicolas says. The average life of a solar system is more than 25 years.

Another bonus is that in some cases a homeowner can sell any excess power they collect from the sun back to their utility company, a deal known as net metering. As an example of the savings, Nicolas shared his Duke Energy bills. They showed his previously $150 dollar monthly bill had dropped to just over $10 after savings from solar power and a credit for selling power back to the utility.

Nicolas says his enthusiasm about the savings has prompted a new, albeit unusual, pastime. “I love to turn everything off and go watch the power meter spinning backwards,” adding with a laugh that his wife is a bit baffled by this hobby.

What about North Carolina’s neighbors?

In 2014, South Carolina was ranked 31st in installed solar capacity and Virginia was ranked 30th, according to SEIA numbers.

Why is North Carolina’s solar industry growing so much faster? Brun explains that it is primarily due to the state’s Renewable Energy and Energy Efficiency Portfolio Standard (REPS). The standard requires the state’s utility companies to generate 12.5% of their power from renewable sources by 2021.

In addition to the federal tax credit, North Carolina also currently offers residents an additional 35% tax credit. At the time of this writing, that credit is set to expire at the end of the year, but there’s a push in the state legislature to extend it.

In South Carolina and Virginia, some tax credits are also available. South Carolina offers residents a tax credit of 25% of eligible costs—with a maximum of $3,500 or 50% of their tax liability, whichever is less—for installing a renewable solar power system, according to the Clean Energy Authority.

In Virginia, depending on the city or county of residency, homes using solar energy systems can be deemed exempt or partially exempt from local property taxes, according to the Clean Energy Authority.

The future of solar

The idea of homeowners relying solely on solar power has become more feasible in recent years, Brun says. Solar power alone is not yet set to meet the higher demands of business, however.

The holdup is because solar power storage options to date have been limited, he explains. Solar energy batteries can only store so much reserve power, and extra batteries are clunky and expensive with limited capacity. This means in many cases valuable sunshine isn’t being stored for use later, when the sun goes down. However, a new battery—developed by carmaker Tesla and currently being tested—is wowing those in the solar industry with its storage capacity.

It could at some point mean larger commercial structures can unplug from the traditional electricity grid.  “It is quite feasible on a household level right now to rely completely on solar power under certain circumstances,” says Brun. “Once you get above the household level—in commercial and industrial areas—it’s a different story. We are not there yet.”

 

First Bank and its representatives do not provide tax advice. Each individual’s tax and financial situation is unique. Individuals should consult their tax advisor for advice and information concerning their particular situation.

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How to Avoid Paying Too Much for a House https://localfirstbank.com/article/how-to-avoid-paying-too-much-for-a-house/ Wed, 13 May 2015 15:50:06 +0000 https://localfirstbank.com/?post_type=article&p=4054

Imagine you just crossed the threshold of your dream home. It has a spacious two-car garage, bedrooms for each of your kids, and way more counter space than your current rental.

There’s only one problem: price. It seems a bit on the high side, even for a home this perfect—but is it?

If you ask Cara Pierce, a real estate broker with Fonville Morisey in North Carolina’s Triangle region, the best way to answer that question is through due diligence. “Buyers should consider recent home sales data for the area they want to live,” Pierce says. “In many parts of our local market, overpricing is the primary reason homes are still for sale after 30 to 60 days.”

But whether a home’s price complements local sales data only addresses part of the pricing issue. You should also get to know the neighborhood and be willing to ask very specific questions about a property before making a commitment.

Feeling the neighborhood vibe

If a neighborhood isn’t a good fit for you and your family, the home’s price will always be too high. Remember, you’re not just buying the home. You’re paying for the location, too.

“Buyers should visit a house on at least 4 different occasions and at different times of day before deciding to buy,” says Fidel Davila, a real estate agent at Ed Price & Associates in High Point, North Carolina. “You should get a feel for the dynamics of the neighborhood.”

Does the quality of the surrounding area justify a home’s price? Access to good schools and recreational facilities can increase property values over time just as traffic noise and crime can lower them.

To the extent possible, try to determine whether a community will be as desirable 10 years from now as it is today. If you aren’t confident that the value of your investment will rise substantially over time, a seemingly high-priced home might be exactly that: too expensive.

The thinking is similar when it comes to a home’s overall condition. “Buyers should ask lots of questions about a house’s condition,” says Pierce. “How old is the roof? Will you need to replace it soon? The same goes for heating and air systems, windows, and exterior painting. You’ve got to scrutinize every potential expense when evaluating a home’s list price.”

Buyers in North Carolina should also consider how new construction influences a home’s price tag. If you’re set on buying a brand new house, be aware that you’re probably paying extra for the new materials used to build it. According to Pierce, “High construction material costs, high land prices, and high consumer demand are making new homes more expensive in the current market.”

If you can find an appealing older home in the same area as the new one that’s tempting you, you might end up with a better deal.

Preparing your finances

One thing many homebuyers forget is that a large portion of a home’s price lies in the long-term cost of the mortgage. If you only have an average credit score and haven’t saved much for a down payment, you might end up paying more than you should for a house—if you’re approved for a loan at all.

Consider how your repayment history will affect your interest rate. If you’ve missed some payments or carry credit card debt, focus on repairing your credit before buying a home.

As Pierce explains, “Good credit, a history of on-time payments, and being gainfully employed will make you a good lending candidate.” And a better lending candidate will get a better rate.

Having a sizable down payment comes in handy, too. Putting down 20% means you won’t have to purchase private mortgage insurance, lowering a home’s overall costs even further.

You could also qualify for a lower interest rate and begin your homeownership journey with substantial equity. In the end, you pay thousands of dollars less over the course of a 30-year mortgage.

In any case, never buy a home on impulse or just because you love the property features. North Carolina buyers should note that only sellers pay real estate commissions to brokers, so connecting with a licensed broker is a great way to obtain realistic guidance about a home’s price relative to its market value. A broker will also represent you throughout the buying process, free of charge.

“If you’re looking at a house listed at $150K but everything else in the neighborhood sells for around $125K, it’s time to start asking questions,” says Davila. “Otherwise, you could end up paying too much.”

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Money Pit or DIY Heaven? https://localfirstbank.com/article/money-pit-or-diy-heaven/ Mon, 02 Mar 2015 20:17:50 +0000 https://localfirstbank.com/?post_type=article&p=3787

Whether you flip houses or see your potential dream home in something that’s currently a bit rundown, it can be hard to tell if the property you’re planning to renovate will turn out to be a fortunate find or a total flop.

The following are tips on easy updates that can increase the value of a home and on the money pit projects you should steer clear of.

As you read and consider your options, be realistic about your skill level – you can save a lot of money by doing the labor yourself, but if you don’t know anything about plumbing or wiring, for example, hire a professional. It will only end up costing you more if you have to pay someone to fix a botched DIY project.

Cosmetic touchups: DIY heaven

Sometimes you just need a little imagination to see beyond the ‘70s decor and tangerine walls.

If the seller hasn’t put a lot of effort into cleaning and staging the home, many prospective buyers will have a hard time picturing themselves living there. As tough as it might be to ignore the staring eyes of the current owner’s massive porcelain doll collection or the grass-green shag carpeting, savvy homebuyers can block out the visual noise to see the possibilities.

Focus on the layout and structure of the home. With those dolls out of the way, a fresh coat of paint, and some new carpeting, the house could be totally transformed.

New countertops or floors: it depends

New countertops or flooring can be fairly easy to install depending on the material you choose.

A laminate countertop or floor is much easier to install than a granite countertop or carpeting. Granite is expensive and heavy, and one miscalculation or incorrect cut can be a very costly mistake. Carpeting is also less forgiving than other types of flooring like tile or wood.

Do your research before tackling a bigger project like this, and don’t be afraid to call two or three contractors for estimates. You may be surprised to find that it’s less expensive to hire someone than you thought.

Even if you end up going DIY, a contractor can give you some good insight into options you may not have considered as you discuss the best ways to get the job done.

Concrete cracks: it depends

Carefully check the foundation and walls for any cracks. Do the doors open and close easily? Are the floors bulging anywhere? These can be signs of major foundational issues, and big issues mean big money.

It’s not always as simple as repairing the crack itself. All foundations crack eventually, so talk with an inspector to see if that crack is a serious problem or if it’s just settling.

Additionally, you’ll want to look above doors and windows on the second floor, where damage can be more severe. Horizontal cracks in the wall can be caused by an excess of water and likely mean a leaky pike or two for a plumber to repair.

Electrical issues: money pit

Electrical issues are beyond the scope of the average DIYer and are a lot of work, even for a professional.

Since wiring runs inside the walls of the home, the walls will need to be opened up and then put back together once the wiring is fixed. HVAC is particularly difficult to install, and a new system can be very expensive.

You’ll also want to make sure that very little of your newly heated or cooled air is escaping, so insulation plays an important role here. In general, rewiring a house for electricity or heating and air conditioning is a major and time-consuming expense, so be wary about taking this on.

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