Hi. I'm Diane McNelis, Award winning Texas Realtor(R) with Coldwell Banker Southern Homes. Selling and Buying homes in Southeast Texas can be complicated. I'm here to help. When we work together I become your advocate. My goal is to get you the best deal possible and to exceed your service expectations. On my blog, I share tips and strategies for selling and buying homes in Southeast Texas.

Mortgage and Finance

Tips for Buying a Home in Beaumont or Lumberton

If your new years plans call for a new home then you'll want to read this article.  It may be better to buy now in the winter than to wait for the traditional spring home buying season in Southeast Texas.  

Should I Wait for Lower Mortgage Interest Rates?

Should I Wait for Lower Mortgage Interest Rates? | MyKCM

Historically low mortgage rates are a big motivator for homebuyers right now. In 2020 alone, rates hit new record-lows 16 times, and the trend continued into the early part of this year. Many hopeful homebuyers are now wondering if they should put their plans on hold and wait for the lowest rates imaginable. However, the reality is, acting sooner rather than later may be the actual win if you’re ready to buy a home.

According to Greg McBride, Chief Financial Analyst for Bankrate:

“As vaccines become more widely available and a return to normal starts to come into view, we’ll see mortgage rates bounce off the record lows.”

While only a slight increase in mortgage rates is projected for 2021, some experts believe they will start to rise. Over the past week, for example, the average mortgage rate ticked up slightly, reaching 2.79%. This is still incredibly low compared to the trends we’ve seen over time. According to Freddie Mac:

“Borrowers are smart to take advantage of these low rates now and will certainly benefit as a result.”

Here’s why.

As mortgage rates rise, the increase impacts the overall cost of purchasing a home. The higher the rate, the higher your monthly mortgage payment, especially as home prices rise too. Sam Khater, Chief Economist at Freddie Macsays:

“The forces behind the drop in rates have been shifting over the last few months and rates are poised to rise modestly this year. The combination of rising mortgage rates and increasing home prices will accelerate the decline in affordability and further squeeze potential homebuyers during the spring home sales season.”

What does this mean for buyers?

Right now, the inventory of houses for sale is also at a historic low, making it more challenging than normal to find a home to buy in many areas. As more buyers hit the market in the typically busy spring buying season, it may become even harder to find a home in the coming months. With this in mind, Len Keifer, Deputy Chief Economist for Freddie Macrecommends taking advantage of both low mortgage rates and the opportunity to buy:

“If you’ve found a home that fits your needs at a price you can afford, it might be better to act now rather than wait for future rate declines that may never come and a future that likely holds very tight inventory.”

My Final Suggestion

While today’s low mortgage rates provide great opportunities for homebuyers, we may not see them stick around forever. If you’re ready to buy a home, let’s connect so you can take advantage of what today’s market has to offer.

If you are ready to get pre-qualified but don't know the best lenders to contact, I can help.  For the past twelve plus years I have worked with some of the best loan officers in Southeast Texas.  If you want the list of the top lenders I recommend contact me here on the blog.  Getting pre-qualified is the best thing you can do when you are ready to start looking for a home. 



Low Interest Rates Make Homes in Beaumont or Lumberton More Affordable

Is it cheaper to buy a home today than it was in the 70's?  Well, no but interest rates are lower.  Lower interest rates give buyers more buying power.  In Beaumont and Lumberton and all of Southeast Texas home values are up the past few years.  Good news, with interest rates at historic lows buyers can afford more home than ever.  

Take a look!





Last year a mortgage payment on a $300,000 home at 4.09% would have had a monthly P&I payment of $1,448.  Today it is almost $200 less per month.  Don't let the fact the home prices in Southeast Texas have gone up stop you from buying today.  I don't have a crystal ball to know how long rates will stay under 3% but I don't think we will be seeing them this low next year.  

If you have any questions about your buying power or buying a home in Southeast Texas, let's talk.  You can contact me here on the blog. 



Diane McNelis, Coldwell Banker Southern Homes

Beaumont and Lumberton Home Prices are Rising

Home Prices are Up in Southeast Texas

Have you looked at home prices in Beaumont lately?  They are up.  Have you looked at home prices in Lumberton?  They are really up.  But even with prices up across most of Southeast Texas, the cost to buy a house compared to last year is actually down.  How you ask. 

The Cost of a Home Is Far More Important than the Price

The Cost of a Home Is Far More Important than the Price | MyKCM

Housing inventory is at an all-time low. There are 39% fewer homes for sale today than at this time last year, and buyer demand continues to set records. Zillow recently reported:

“Newly pending sales are up 25.5% compared to the same week last year, the highest year-over-year increase in the weekly Zillow database.”

Whenever there is a shortage in supply of an item that’s in high demand, the price of that item increases. That’s exactly what’s happening in the real estate market right now. CoreLogic’s latest Home Price Index reports that values have increased by 5.5% over the last year.

This is great news if you’re planning to sell your house; on the other hand, as either a first-time or repeat buyer, this may instead seem like troubling news. However, purchasers should realize that the price of a house is not as important as the cost. Let’s break it down.

There are several factors that influence the cost of a home. The two major ones are the price of the home and the interest rate at which a buyer can borrow the funds necessary to purchase the home.

Last week, Freddie Mac announced that the average interest rate for a 30-year fixed-rate mortgage was 2.87%. At this time last year, the rate was 3.73%. Let’s use an example to see how that difference impacts the true cost of a home.

Assume you purchased a home last year and took out a $250,000 mortgage. As mentioned above, home values have increased by 5.5% over the last year. To buy that same home this year, you would need to take out a mortgage of $263,750.

How will your monthly mortgage payment change based on today’s lower mortgage rate?

This table calculates the difference in your monthly payment:The Cost of a Home Is Far More Important than the Price | MyKCMThat’s a savings of $61 monthly, which adds up to $732 annually and $21,960 over the life of the loan.

Bottom Line

Don't think it is too late to find a good buy on a home in Beaumont or Lumberton.  Prices are higher but with interest rates being as low as they are it is still a great time to buy that home you have been dreaming about.  If you have any questions about finding the right home contact me.  I'm here to help.  No real estate question is too big or too small.  







Finding Homes with Owner Financing in Southeast Texas

The topic of owner financing is a popular one.  In fact, the posts on the blog that get the most responses tend to be the posts about finding homes that offer owner financing.  We all know the banks and big lenders are harder to work with than ever.  Qualifying standards haven't been this strict in years.  This has led to a group of potential home buyers that can't buy a home through the traditional lenders. 

The only hope for these buyers is Owner Financing.  From time to time, it is interesting to see just how many home owners that are trying to sell their homes are willing to offer owner financing.  Take a look at this chart.

Owner finance 

Out of the 2,700 plus homes that are for sale through the Beaumont MLS, at this time only 41 offer owner financing as an option for the buyer to purchase. 

"Just less than 2% of all homes listed offer owner financing at this time."

Here's 3 other noteworthy statistics about homes that offer owner financing in the Southeast Texas real estate market:

  1. The average price is $138,430
  2. The average days on the market is 153 which is a little higher than the overall average number of days on the market.
  3. You can buy new construction with owner financing through a few home builders.

Kelley Family Investments is building new homes in Wolf Creek.  This builder offers owner financing.  His terms are pretty reasonable.  Home prices are in the middle 100's. 

Three other things to think about before you buy a home with owner financing:

  1. Sellers are going to charge a higher interest rate than the banks.  On average expect to pay 7-10% in interest.
  2. Every seller can set their own terms.  For example, some sellers may finance for 20 years.  Others may want a payoff in 5 years with a balloon payment.
  3. As a buyer will you pay for an appraisal?  Its not a requirement with owner financing

There are a lot of things to consider when you decide to look for homes that offer owner financing.  .  With only about 2% of the homes for sale in Southeast Texas even offering owner financing, its not an easy way to find and buy a home.  It can be done but be prepared for the challenges. 

Texas Ranks Number 2 in Highest Closing Costs

Closing costs by state

Texas may be known for great home prices but we are also know for higher than normal closing costs.  Bankrate.com researched all fifty states and determined home buyers in Texas pay more in closing costs than buyers in any other state- except New York. 

The chart above shows average closing costs on a $200,000 home purchase.  The total fees don't include your prepaid items such as escrow accounts for taxes and insurance. 

For more details on closing costs in each state link on the link below "New York Number 1..."

No Real Estate Slow Down with Jefferson County Foreclosure Notices

Jefferson Co. CourthouseOn Tuesday, April 6th, one hundred and forty one homes could be auctioned off on the court house steps. 

According to the Jefferson County Clerk's Office, there have been one hundred and forty one notices of trustee sale filed in time for the April 6, 2010 auction.  These homes are in neighborhoods you know.  River Oaks Estates, Dowlen West, Glenwood, Northwest Forest, Calder Place,and Stonegate Manor are all on the list. 

The good news is not even close to one hundred and forty one homes will be auctioned off.

The bad news is if one that is auctioned is in your neighborhood watch out for falling property values.

Generally speaking, on any given month for the past two years, the clerk's office has received over 100 notices of trustee sale.  Check for yourself.  All foreclosure notices are a matter of public record.  The clerk's office website is http://jeffersontxclerk.manatron.com/.

Having attended a good number of the Tuesday auctions over the past two years, I've never seen more than thirty properties auctioned on any given Tuesday.  Keep in mind most of these homeowners are working on a plan to keep their home.  Some homes are for sale, some sellers make a payment in time, so only the worst of the worst situations actually end up being auctioned.

A few other things to know about the foreclosure sales:

  • Cash is king.  No financing allowed.
  • Do your homework.  There will be others there bidding on the homes with profit potential.
  • Be brave.  No inspections allowed.  You are buying the home "as is".
  • Eviction is not a simple process.  If the owner is still living at the home, you'll have to become knowledgeable on the ins and outs of eviction.
  • Why buy this way at all?  Sometimes a good profit stands to be had for the educated buyer.

Want to know more about buying a foreclosure in Jefferson County?  One way to start is by attending an auction.  An easier way to start is to contact me and ask for a list of the REO homes that are available. 

Filing Homestead Exemptions in Jefferson, Hardin and Orange County

Hungry birds If you settled in to a new nest last year, then its time to think about filing for your homestead exemption. 

A homestead exemption removes part of the value of your residence from taxation and lowers your taxes.  Now, that's something to chirp about.  In order to qualify you must own your home as of January 1 of the tax year and use the home as your principal residence. 

According to the Jefferson County Appraisal District there are actually four types of homestead exemptions:

  1. General Homestead- for every homeowner
  2. Over 65 Homestead
  3. Surviving Spouse Over -65 Homestead
  4. Disability Homestead

Exemption applications, other than over 65, must be filed between January 1 and May 1 of each tax year. 

To find out how much you will save by filing for homestead current rates for Jefferson County are posted on the JCAD website. 

The Window on State Government Website gives the following information for filing for homestead. 

How do I get a general $15,000 homestead exemption?

You may file an Application for Residential Homestead Exemption with your appraisal district for the $15,000 homestead exemption up to one year after the taxes on the homestead are due. Once you receive the exemption, you do not need to reapply unless the chief appraiser sends you a new application. In that case, you must file the new application. If you should move or your qualification ends, you must inform the appraisal district in writing before the next May 1st. A list of appraisal district addresses and phone numbers is available online.

If you need a copy of Hardin, Jefferson, or Orange County's Homestead Exemption form contact me and I'll email it to you.  Just make sure you remember to file before April 30, 2010.  There's no reason to pay more taxes than you have to. Share this with all your friends who found a nest to call home last year and they will be singing your praise.  Happy New Year!


Southeast Texas Home Buyers Find FHA Loans Most Appealing

Its harder to finance a home these days.  If you've been in the residential real estate market in 2009 that comes as no surprise.  You may find it surprising to know that in October in Southeast Texas more home buyers used FHA loans than any other type of financing.  See the cool chart below.

Conventional financing still comes in second for all Southeast Texas home buyers and not far behind is cash.  37 home buyers paid cash for their home in October.  What a nice problem to have. 

Here's five more noteworthy tips about the type of financing home buyers used this October:

  1. The median price for cash closings was $75,000.
  2. The median price for conventional closings was $163,000.
  3. All homes spent an average of 116 days on the market.
  4. The median price for FHA closings was $124,900.
  5. This October 155 homes closed, compared to 178 last year, and 185 in 2007. 

*Data is from the Beaumont MLS and has not been released to Texas A&M real estate center yet.  One of the big advantages of FHA financing is the 3.5% down payment.  For first-time home buyers its about the cheapest way to get into a home.  FHA loans also allow up to a 6% seller paid closing cost contribution.  Its no wonder, with the first-time home buyer tax credit still driving the market, that FHA financing is the most appealing loan type right now.  Want more information about the Southeast Texas residential housing market?  You can contact me right here on the blog.  Just click the contact Diane button in the right column. 

Three Addresses You Wouldn't Expect To Find At The Auction

Jefferson Co. Courthouse Tomorrow, at the most Northerly door to the newest addition to the Jefferson County Courthouse, there will be a sale. 

This sale takes place the first Tuesday of each month rain or shine, wind or snow, or even Hurricane as we found out last year.  Its the Notice of Accereration and Notice of Trustee's Sale.  Also, know in layman's terms as the Foreclosure Sale.

This month there were approximately one hundred Notices of Trustee Sale filed at the Jefferson County Clerk's office.  That's about average for Jefferson County in Southeast Texas.  At least it has been this year.  As you might expect you'll see some addresses in Port Arthur.  But it may come as a surprise to see a few addresses that you wouldn't expect.

Now, foreclosure is not a process to make light of.  It is bad for the homeowner.  It is bad for the neighborhood and its bad for the lender who has not been repaid on the mortgage note.  Its not just a problem in the entry level housing market either.  

Would it surprise you to learn a Notice of Trustee Sale has been filed for a home in Barrington Heights?  How about a home on Salem Circle in Dowlen West?  What about another home in Dowlen West on Shakespeare Drive? 

All three addresses can be found by searching the most recent Notice of Trustee Sale records filed with the county clerk.  Here's what it doesn't mean.  These homes may or may not be sold at auction tomorrow.  The grantor and mortgagee have probably been working very hard to work out an acceptable payment plan that will keep the home owner in the home. 

Of the one hundred or so homes that have had a notice of trustee sale filed and are scheduled to be sold at the auction tomorrow, probably less than 1/4 of those will actually be sold.  At least that seems to be the norm.  Often the only bidder willing to buy the home at the auction is the mortgage holder (the bank or lender).  Buyer's have to pay cash at the auction which knocks out a lot of interested would be buyers.  Especially for the more expensive homes. 

If you are curious about the foreclosure auctions, attending an auction is a good place to start.  Tomorrow, at the most Northerly door to the newest addition to the Jefferson County Courthouse there will be a sale.  Sale starts at 1pm or within three hours thereafter.  Bring a chair and snacks and be prepared to wait.  You might be surprised by what you learn.

Getting A Loan? Here's What You Need To Know About the Third Party Financing Addendum

Almost all of us take out a mortgage when we purchase a home.  In Texas, when you make an offer that is contingent upon financing approval to complete the purchase, you will want to sign a third party financing addendum. 

The Texas Association of Realtors addressed a few of the components of this addendum in a recent email update to Realtors.  This is information they shared with members in the recent update.

Third Party Financing Condition Addendum
I'm having difficulty understanding the terms and issues involving the Third Party Financing Condition Addendum. How does this addendum work?

Prior to the adoption of the current addendum, there was considerable uncertainty as to when and how it was to be determined if the buyer had satisfied the lender's financial requirements. Often the dispute concerning the lender's approval would arise many days after the time period for approval under the prior addendum had expired, and the argument would be whether approval had in fact been obtained within the days specified.
In order to give all parties some certainty about this approval process, the addendum was changed to put the burden on the borrower/buyer to provide written notice to the seller within the time specified if the buyer cannot obtain the necessary financial approval. This would seem to be appropriate, since the buyer is in the best position to obtain that information from the lender and, after all, it is the buyer's contingency. If the buyer is not satisfied that he has obtained financial approval relating to his assets, income, and credit history within the time provided, the buyer must give timely written notice to that effect to the seller. If the buyer gives a timely notice, the contract terminates, and the earnest money is refunded to the buyer. If the buyer does not give such written notice to seller within that time period, the contract will no longer be subject to the buyer's financial approval regarding assets, income, and credit history.
The addendum does not require that the buyer obtain financing approval within the specified time period. Rather, it provides an opt-out period for a buyer who does not believe he can obtain that approval.
As was the case before this change, the lender's approval of the property as satisfying the lender's underwriting requirements is separate from the buyer's personal qualifications.

*Quoted from The Texas Association of Realtors.

As a home buyer who's not a real estate professional, here's the top 5 things you need to know about the addendum. 

  1. It is the buyers responsibility to give written notice to the seller if they are unable to get their loan approved.
  2. If the buyer gives written notice within the time frame then they will be able to terminate the contract and the earnest money will be refunded.

  3. The buyer does not have to have loan approval within the given time period.

  4. The home must still meet the lender's underwriting requirements regardless of the time frame for financing approval.

  5. If the property does not appraise for the purchase price then the buyer has the option of proceeding with the purchase or terminating the contract.

That's a quick and simple explanation of the third party financing addendum.  As with all contracts, if you have specific legal questions when you should consult an attorney.  If you are starting a home search, you will find there is a lot of paper work that comes along with buying a home.  If you are getting a mortgage to buy your home then you will want to make sure you are signing a third party financing addendum.  Its for your protection.