Tips for Buying a New Home

Interest rates and home prices have never been lower so now is the best time to buy a home.  Buying a home is a decision that will affect you for many years to come.  (An average home buyer will live in their home for 8 years.)  SO where do you start?

1)  Financing:  This drives the whole transaction.  You must be able to get a loan and be comfortable with the terms.  Get pre-qualified with a reputable lender.  Know your options.  You can get into a home for 3.5% down or even 100% down!  Please call us with questions or for a recommendation! 

2)  What is creating the urge to move?  What are must haves and what can you live with?  Most home buyers cannot afford everything on their wish list.  It is important to establish these ground rules before you get emotionally involved.

3)  Do your research.  Check out the builders to make sure they are reputable.  Check out product warranties, finishes, energy efficiency, allowances, etc.

4)  Call and set up an appointment to get more information.  There is only so much you can see over the internet. 

Call Hartland Homes today to see how affordable it is to build brand new!  402-419-6589

New NIFA Rates! 3.25%

On September 20, 2011,  NIFA lowered their interest rate to 3.25%.  This is the lowest it has ever been!  NIFA is an acronym for Nebraska Investment Finance Authority.  These loans are for first time home buyers or buyers who have not owned a home in the last 3 years.  If you are a first time home buyer or you know someone who is looking to buy, this is an incredible rate.

WHAT ARE THE REQUIREMENTS TO GET A NIFA LOAN?  You must be a first time home buyer or have not owned a home in the last three years.  Also, there is an income limit based on the county you are purchasing in and the number of family members in your household.  For example, if you live in Lancaster county and there are 2 family members in the household, you cannot make more than $69,500.  Finally, there is a purchase price limit for the home.  For a single family home in a non-target area, you can not purchase a home over $200,000.

WHAT TYPE OF LOAN DO I GET?  NIFA’s low interest rate attaches to FHA, VA and CONV loans.  If you are using an FHA or VA loan, the interest rate is 3.25%.  If you are using a conventional loan, the interest rate is 3.75%.  You must qualify for this loan and meet the NIFA requirements in order to use the NIFA funding. 

DO I NEED A DOWN PAYMENT?  That depends on what type of loan you are using.  VA and USDA loans do not require a down payment.  Also, NIFA has a special program call Homebuyer Assistance whereby you can borrow your down payment and pay a slightly higher interest rate.  Keep in mind that all of these no down payment loan options require a minimum amount of investment from the buyer.  Usually $500 to $1000.

For more information on how you can get a NIFA loan, what a possible payment would be and more, call me today at 402-419-6589.

Also see NIFA’s website at www.NIFA.org

7 Reasons to Own Your Home

courtesy of Realtor Magazine

1. Tax breaks. The U.S. Tax Code lets you deduct the interest you pay on your mortgage, your property taxes, as well as some of the costs involved in buying your home.

2. Appreciation. Real estate has long-term, stable growth in value. While year-to-year fluctuations are normal, median existing-home sale prices have increased on average 6.5 percent each year from 1972 through 2005, and increased 88.5 percent over the last 10 years, according to the NATIONAL ASSOCIATION OF REALTORS®. In addition, the number of U.S. households is expected to rise 15 percent over the next decade, creating continued high demand for housing.

3. Equity. Money paid for rent is money that you’ll never see again, but mortgage payments let you build equity ownership interest in your home.

4. Savings. Building equity in your home is a ready-made savings plan. And when you sell, you can generally take up to $250,000 ($500,000 for a married couple) as gain without owing any federal income tax.

5. Predictability. Unlike rent, your fixed-mortgage payments don’t rise over the years so your housing costs may actually decline as you own the home longer. However, keep in mind that property taxes and insurance costs will increase.

6. Freedom. The home is yours. You can decorate any way you want and benefit from your investment for as long as you own the home.

7. Stability. Remaining in one neighborhood for several years gives you a chance to participate in community activities, lets you and your family establish lasting friendships, and offers your children the benefit of educational continuity.

Online resources: To calculate whether buying is the best financial option for you, use the “Buy vs. Rent” calculator at www.GinnieMae.gov.

100% Loan Programs

Many buyers that I talk to want to buy a home with as little initial investment as possible.  When you buy a home the initial investment consists of earnest deposit, down payment, closing costs and pre-paids.

One way to lower these cost is to utilize loan programs which require little or no down payment.  There are several options for a 100% loan.  Keep in mind, you must qualify for these programs.

1) VA  If you are a veteran, you may qualify for this loan.  This is an excellent benefit!  There is 0 down payment required!  There is an up front funding fee but no monthly mortgage insurance so your payment is fairly equivalent to an FHA loan with 3.5% down!

2)  NIFA HBA  (Nebraska Investment Finance Authority - Home Buyer’s Assistance)  This is for a first time home buyer or someone who has not owned a home in the last 3 years.  There are purchase price and income maximums as well.  This loan pairs with an FHA or CONV loan.  The down payment is covered by a 2nd loan which is at a very low rate amortized over 7 years.  You must have a minimum investment of $500 for an FHA loan and $1000 for a CONV loan.  See www.nifa.org for more information.

3)  USDA  This is a 100% loan program for homes in rural areas.  There are income maximums.  The buyer must take a home buyer’s education course.   This is a great fit for those who want to live in a smaller town and don’t have a down payment.  Our Eagle area qualifies for this type of financing. See www.rurdev.usda.gov/ne

4)  We don’t have a 100% loan, but when you buy a Hartland Home, you can save a lot on your initial costs!  We pay up to 2% of your closing costs (ave. of $2500).  Also, when you purchase a new home, if you don’t make too much money, you may qualify for an impact fee rebate.  This rebate is credited directly towards your down payment reducing the amount of money you need at closing!  Maximum rebate at this time is approximately $4600!

Is now the right time for you to buy?

The Lincoln market has really started to move since January 2011.  Buyers are tired of waiting.  Home owners are ready to move up.  Homeowners selling their homes and buying bigger homes is creating housing for mid-range and first time homebuyers. 

Interest rates and prices are still low.  Rates are still at 5% and below!  It is safe to assume that interest rates will start to rise this year.  As the demand increases, prices of homes will start to rise as well.  Economically, it is a great time to buy.  Interest rates and prices will probably not get any lower.

So, is now the right time for you to buy?    There are a few questions you should ask before starting the home buying process. 

1) Do you plan on staying in your home for at least 3 years?  If the answer is no, then make sure you will be able to sell your home for a price that will not require additional funds. Or you may want to consider renting out the home when you leave. 

2) How stable is your job?  If there are impending layoffs or you are seriously thinking about quitting, you should probably wait until things are more stable.  On a positive note, there is a special program out there that if you get laid off in the first 12 months of your home loan, the company will pay 4 of your house payments.  Make sure you ask for this program if you are concerned about losing your job.

If you are planning on staying put for a couple of years and your job is fairly stable, then now could be the right time for you to buy!  For more information, call us today.  402-419-6589

Best Friend’s Advice

Recently, my friend called me to ask for my advice.  She lives several states away and wants to purchase a brand new home.  I was excited that she thought enough of me to ask.  (I haven’t spoke to her in over a year, so it isn’t like we talk all the time)  It got me thinking…. that would be a great topic for my blog. 

Today I will share with you the advice I gave my friend on selecting a builder.

1)  Are you purchasing a brand new home that is already built or or you going to have the home built for you?

Either way, check out the builder’s reputation.  Are they a member of the BBB, their local Home Builders Association (HBA) and/or the local chamber of commerce?   Call these organizations to find out if they are reputable.  How many homes a year do they build?  If it is just a couple, you may want to check out their qualifications.  If the builder belongs to their local HBA, that is a good sign that they are a professional, reputable builder.

2) Determine your top priorities:   Lowest price? Highest Quality?  Green Features?  Location?  Floor Plan?  Reputation?  Once you have narrowed down your search, if you are considering more than one builder be sure to compare apples to apples.  The lowest price may NOT be the best value. 

For example:  If you have two homes that you love, location is equally good, builders are both professional, but one has a lower price, it may not be the best value.  Consider these factors: 

Warranty:  Does the home come with a standard one year warranty or more?  What is included in that warranty?  Are there extra fees for particular services?

Ex.  We provide a 10 year warranty on all of our homes backed by RWC. 

 

Product quality:  Consider the quality of the items in the home which will be very expensive to replace; siding and windows.  Do they have a warranty?  What is the average lifespan of the product?  How energy efficient are the windows?

Foundations/basements:  The foundation is extremely important.  You shouldn’t have to worry about this element too much with a new home.  Just be sure to check out examples of your builder’s work for your own piece of mind. What is the system used to build the foundation?  Is it poured, block, or something else?  (If you are looking at existing it is vital you check the foundation.  It is very expensive to fix.  )  Is there a  drainage system in place in case of excess water runoff?  (Look for drain tile, sump pits and other dry basement systems)  Is the yard and the neighbors’ yard graded to allow for water runoff? 

(Continued in my next blog article )

Being Green

Green is all the rage!  You hear it in reference to just about every marketed product.  Just what does it mean to be “green”?  According to Wikipedia:  Green, along with environmentally friendly, eco-friendly and nature friendly, are synonyms used to refer to goods and services, laws, guidelines and policies considered to inflict minimal or no harm on the environment.^[1] "

Did you know there is no single international standard for environmentally friendly goods and services?  Beware when something is labeled as such, it could mean something different than what you think it should.

So what is a green home?  According to the U.S. Green Building Council’s Green Home guide there are many factors that make up a green home.  Some items to consider are:  location, size of home, building design, building materials, energy efficiency and landscaping.  

Let’s take a look at each of these measures.  Location: the development should not be located on an environmentally sensitive site like wetlands or endangered species habitat.  The development should be compact:  at least 6 homes per acre.

Size of Home:  The smaller the home is the less resources it will use.  In the case of green, smaller is better.

Building Design and Materials:  Is the home designed to use natural light sources? Does the outside have natural shading?  Are the materials recycled or environmentally friendly?

Energy Efficiency:  This covers everything from lighting to heating and cooling and appliances.

 Landscaping:  You should choose drought resistant plants for your yard as well as place shade trees strategically to provide cover for the concrete (driveways and patios) and for the windows.

These are just a few of the factors to look at when considering if a home is “green”.   The biggest consideration, however, should be what features are important to you?   Are you more concerned with saving money monthly with energy costs? Or is it more important that that the materials are recycled and environmentally friendly? 

Are you willing to pay more for these products just to know you have a “green” product?  If you are concerned about the overall price tag of your home, make sure to compare upfront cost vs. monthly savings to make sure it makes financial sense.

Hartland Homes’ homes meet many of these “green” standards.  All of our homes meet the energy star guidelines,

our developments meet the 6 per acre standard, and our homes are smaller and efficient by design.  However, if we do not currently employ the “green” factor that is most important to you, don’t worry, we will be glad to make the adjustment.   Call us today.  We can help you determine what green features you want in your new home and how to make it a reality.    402-477-6668

Home Buyers To Be Charged More By FHA After September 7th

FHA is raising its Mortgage Insurance Premium rates after September 7th, 2010. What does that mean to you? If you are planning on buying a home and do not qualify for VA (military) or have 5 to10% to put down so you can go conventional… you will pay more. About 99% of our customers buy their home with an FHA loan. It requires only 3.5% down, it has the highest income to debt ratios and is more lenient with credit history.

What is the Mortgage Insurance Premium (MIP)? MIP is what FHA charges the buyer in order to have a loan that is less than80% loan to value. This fee should cover FHA’s losses should the buyer default. (Not sure it was enough considering all the foreclosures) FHA is increasing their fees to cover their rising costs (defaults).

How it works: FHA charges an upfront MIP and a monthly MIP. Currently, the upfront premium is 2.25% of the loan amount. For example, on a $150,000 loan, the upfront fee is $3,375. This is added right into the loan (financed) so the buyer doesn’t have to come to the table with extra money. The monthly fee is .55% of the total financed amount. On an $150,000 loan, the monthly fee would be $70.00.

The new amounts will have a lower up front MIP but a higher monthly MIP resulting in a higher house payment. See table below:

Loan Amount	$150,000 today	$150,000 after 9/7/10
Up front MIP	2.25% = $3,375	1% = $1,500
Monthly MIP	.55% = $70	.90% = $114
Principal at 5.5%	$871	$860
Total Principal and MIP	$941	$974

I have not included real estate taxes and home owners insurance as these are not determined by FHA and won’t be affected. The difference is $33 more a month that the home buyer will be paying for the same loan. If you get a case number before September 7th, over 5 years you will save $1,980.00 (using this scenario).

So what can you do about it? Nothing if you wait until September 7th to purchase your home. You must have an FHA case number assigned to the property you are buying before September 7th. So, make sure you write a contract on a home and get into the loan company before September 7th. You do not have to close by that date. Call Hartland Homes today for more information. 402-477-6668

8/12/10 UPDATE **FHA has decided to postpone this change until October 4th!

Click here for more information on FHA.

Examples of payments and premiums are for illustration purposes only and are subject to human error.

Sizzling Summer Interest Rates!!!

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 4.5% for excellent credit scores.

What does this mean????  Interest rates should not be this low.  Ask  a financial planner or a banker and you will see...these rates are being artificially held low.  What that means to you is that it WILL NOT LAST!  These interest rates will be going up soon.  You will probably never have another chance (for 20-30 years) to enjoy such cheap financing. 

Did you know that on a $150,000 home, the  difference between 4.5% and 5.5% interest is a whopping $91.50 more a month? 

If you are serious about buying a home, please do not wait until next year unless you want to pay $100 + a month more for the same home.  (prices of homes will rise too)

30-year mortgage rate drops to 39-year low

(Reuters) - Mortgage rates dropped in the past week, with 30-year fixed-rate loans tumbling to their lowest level in 39 years, according to a survey released on Thursday by Freddie Mac, the second-largest U.S. mortgage finance company.

Click here to read the rest of the story:  Reuters article