MIP – Dirt2Doorbell

New Year, New Home

625 Minkel Door — Open the door to a Brand New Year!

Have you been thinking about a new home for a long time? Have you watched interest rates and home prices drop? Have you noticed that home prices are now rising?

We are at the beginning of the upswing in pricing for Real Estate in our area. Guess what else is happening? Loan costs are on the rise too. That means both interest rates and mortgage insurance premiums will be higher on FHA loans. What does that mean to you? Move quickly! Claim your inventory home and lock in your rate and current MIP rates before they skyrocket at the end of this month. This could save you thousands of dollars over a 30 year loan.

It’s a New Year. Don’t you deserve a New Home?

Shocking!

After all of the gloomy predictions about what a downgraded credit rating will do to our economy I was shocked to learn today that many of our recommended lenders are offering a 30 year fixed rate loan at 3.75%. Crazy! Just a few weeks ago rates were hovering around 5%. What does that mean to you? On a 30 year fixed rate FHA loan for $120,000 your payment at a 5% rate including Taxes, Insurance, Mortgage Insurance and Interest is around $1065/month. At 3.75% that number drops below $1000/month to a shocking $979/month! If you buy our least expensive home, priced at $99,490, your payment becomes $812/month. Why would you not buy today? With prices and rates so low, you can’t miss this opportunity to invest in your future!

–Link to 8825 Highland Orchard, pictured above.

10 Rules to Follow

Whether you have just put in your loan application at the sales office, or if you currently have a contract on a home OR if you are just thinking of buying a home very soon, there are a few guidelines that can help you accomplish your goal of Home Ownership!

Do not change jobs or become self-employed or quit your job. Job stability is key and most lenders are going to verify that you have had the same income for the last two years by looking at your tax returns.
Do not buy a car, truck or van (or you may be living in it!) Taking on an increased debt load can count against your buying power.
Do not use credit cards excessively or let you current accounts fall behind. You do need to have a good payment history on all of your debts. If you increase your balances owed on your credit cards after you have been approved for a loan, you may find that loan has vanished!
Do not omit debts or liabilities from your loan application. We’ll see it anyway and it is better to have a good idea what to expect when submitting your loan application. It will make a difference as to which lenders and programs we need to consider for you. We want to help and all information is crucial!
Do not spend money that you have set aside for closing. You need it for closing on your New Home!
Do not buy furniture. Or any other high ticket items. See number 2 and 3.
Do not originate any inquiries into your credit. That means no new store accounts, book-of-the-month clubs, credit cards or visits to the car lot!
Do not make large deposits without checking with your loan officer. Christmas gift money and cash savings can cause huge problems when deposited into your bank account. Call your lender for advice first.
Do not change bank accounts. So Bank of Everywhere has made you really mad with their crazy charges? Suck it up until after you have closed. Changing banks at the last minute can keep you from closing as bank statements are necessary for underwriters.
Do not co-sign for a loan for anyone. Sorry that Grandma needs a new car. Someone else needs to help her besides you. See numbers 6, 2 and 3.

If you can manage these 10 rules, you might just find that you are a Home Owner sooner than you think!

Seller Paid Closing Costs VS Rolling Closing Costs into the Loan

One of the biggest hurdles we have as salespeople are conversations about closing costs. Most of our competition offers the buyer a package which includes the Seller paying for all closing costs. I’ve even heard $8,000 in closing costs advertised by the competition. Well, where do closing costs come from?

Closing costs include a multitude of fees from Home Owner’s Association Fees to Title Company Fees and the cost of a Survey of your home and home site. This is the cost of buying a home. Most builders’ contracts have a list explaining which of the closing costs the Buyer pays and which are the responsibility of the Seller. What is confusing is that most other builders talk to Buyers about contributing to the Buyer’s closing costs.

At Antares Homes we begin with a Value Base Price (A) on our homes and then a buyer can add upgrades and options (B) to the price of the home at the Selection Studio. After this is completed we can often add the Buyer’s closing costs (C) to the final price. A+B+C=Your Mortgage!

What other builders are doing is A+B+C+D (padding for negotiating) = Starting Asking Price. How do you find the Bottom Line Price? And how do you know they won’t lower it even more for the next buyer after you??

We feel that our practice of rolling the closing costs into the loan at the end of the process is the fairest option. You are only paying for the closing costs generated by the sale of the home you are purchasing and not some round number with extra padding that another person has chosen for you.

Mortgage Insurance Premiums

What are they and why should I even think about them? According to Wikipedia (love Wikipedia) it is an insurance policy which compensates lenders or investors for losses due to the default of a mortgage loan. When someone is foreclosed on, that’s a default of a mortgage loan. On an FHA loan, which is the type most used by our buyers, the buyer must pay a mortgage insurance premium at closing. This premium is often split into upfront fees and monthly fees. The upfront fees are part of closing costs and, for our buyers, are usually rolled into the mortgage amount. The monthly fees make up a part of the monthly house payment which also includes the principal, mortgage interest and escrowed taxes. Since increasing the mortgage amount and increasing monthly premiums would greatly affect the monthly mortgage payment a customer makes on a $100,000 mortgage, you can very quickly see why you would want to pay attention to this. HUD issued a letter #2010-28 stating that it would decrease the upfront premium to 1% of the loan amount and increase the monthly premiums which will have a direct effect on the monthly payment. On a $100,000 loan that would be about $22/month difference. If you can get on contract before October 4, 2010 and get you loan in process, this will not affect you.