Moving

Unlocking Affordable Dreams: Financing Your Home with Buyer Incentives and Builder’s Interest Rates

August 9, 2023 by Toby Lorenc

Purchasing a home is a significant milestone, often accompanied by a mixture of excitement and financial concerns, especially in a market like this with higher interest rates than most buyers are used to. Thankfully, there are various strategies and incentives available to make the dream of homeownership a bit more accessible. Among these, two notable options stand out: buyer incentives from lenders and lower interest rates offered by builders. Let us help shed some light on how these strategies can help you secure your dream home without straining your financial resources.

Lender’s Buyer Incentives: A Helping Hand

The path to homeownership is paved with expenses beyond the down payment. Closing costs, property taxes, and insurance premiums can quickly add up, leaving many potential homeowners worried about how to manage these additional financial burdens. This is where lender-offered buyer incentives step in.

Imagine a scenario where a lender provides a buyer incentive. Our partnerships with local lenders give us access to programs that can help with your down-payment when using a specific mortgage lender. This can be a game-changer, as it directly reduces the amount of money you need to bring to the table. Such incentives can often be applied towards closing costs, effectively lightening the financial load at a critical juncture in the home-buying process.

Buyer incentives serve as an attractive proposition for both first-time buyers and those looking to upgrade. They can provide some much-needed breathing room by offsetting expenses that might otherwise deter potential homeowners from taking the plunge. As you consider lenders, inquire about these incentives, as they can play a pivotal role in making homeownership more affordable and achievable.

Builder’s Lower Interest Rates: Building Affordability into Every Payment

In a competitive housing market, builders are constantly seeking ways to attract buyers and stand out from the crowd. One effective strategy employed by builders is offering lower interest rates on financing. This approach has the potential to significantly impact your monthly mortgage payments, making your new home more budget-friendly over the long term. We’ve seen builders offering below 5% for 30 years, while most rates are above 7% for the typical loan.

Builder Incentives may include a lower interest rate or help with closing costs — Builder Incentives may include a lower interest rate, help with closing costs, or upgrades to your new home.

A lower interest rate might seem like a small adjustment, but it can have a substantial cumulative effect. Over the life of a mortgage, even a fractional reduction in the interest rate can translate into thousands of dollars in savings. This can mean the difference between a manageable monthly payment and one that stretches your budget to its limits.

Builders are motivated to offer these advantageous rates to entice buyers and expedite the sale of properties. As a homebuyer, it’s essential to explore these options, understand the implications of different interest rates, and assess how they align with your financial goals.

Making Informed Decisions: What to Consider

While both lender incentives and builder-offered lower interest rates can ease the financial burden of homeownership, it’s crucial to approach these opportunities with a clear understanding of the bigger picture.

Long-Term Implications: Assess the potential long-term impact of lower interest rates and buyer incentives. A small upfront incentive might be appealing, but a higher interest rate over the life of the loan could negate the initial benefit.
Comparative Analysis: Always compare multiple offers from different lenders and builders. Don’t rush into a decision; take your time to evaluate all the options available to you.
Qualification Criteria: Remember that not everyone may qualify for the advertised rates or incentives. Your credit score, financial history, and other factors will influence the terms you’re offered.
Budget Planning: While lower interest rates and incentives can make homeownership more affordable, ensure that you are comfortable with the overall financial commitment that comes with owning a home.

Financing a home has become a more flexible and buyer-friendly process with the advent of buyer incentives and builder-offered lower interest rates. These strategies can help you step through the doorway of your dream home without straining your financial resources. However, it’s essential to approach these options with careful consideration, research, and a focus on your long-term financial well-being. We would love to help guide you through this process. By making informed decisions, you can confidently embark on your homeownership journey and turn your aspirations into a comfortable and affordable reality.

Top Services To Hire As a New Homeowner

March 2, 2023 by Toby Lorenc

Fireplace and Furnace Cleaning, Plus Other Safety Items

Clean and service your fireplace when buying a new home.

Before you move into your new home, concentrate on the safety items. Find a professional to clean and service your fireplace (whether it’s a natural gas fireplace or wood-burning fireplace). A chimney sweep can also inspect the firebox and chimney to make sure they are ready for your first night by the fire. In addition, any other heat sources for your home (typically a furnace) should be cleaned and serviced to make sure they are safe and healthy. Smoke alarms and carbon monoxide detectors should already be installed, but make certain they’re functioning properly. Finally, make sure you have a working fire extinguisher in your home.

Pest Control / Exterminator

Have an exterminator come inspect and treat your home. Especially if the home has been vacant for a while, it will help eliminate the creepy-crawlers lingering around the house. Plus, you may need mouse traps or other services to help deal with unwelcome guest. Make sure to inform them if you have pets and ask about the best practices for keeping your furry friends safe and healthy.

Interior Decorator

Now comes the fun part! Make the home your own and customize it to your style. From picking out furniture, to paint colors and flooring, an interior decorator will be a great investment. Different companies offer different services, so ask about a one-time consultation if your budget is tight. However, a good interior decorator can significantly help with advising and even project managing your home design and décor.

Roofing Company

Based on your home inspection, this may not be necessary right away. However, many roofers will come out and do a free estimate and assessment. Roof leaks aren’t fun and do a lot of interior damage if not addressed. Also, make sure your gutters are free of leaves and debris and that you’re getting proper drainage away from the foundation of your home.

Landscape Architect

You don’t want to be inside all the time! So make your outdoor space a useable and attractive area. Find a great residential landscape architect to help. Not only will this upgrade your home’s curb appeal, efficient and thoughtful landscaping can help reduce water costs and add value to your home. Just like the interior design, the exterior design can be a thoughtful plan and process to make the most of your land.

Handyperson

Whether it’s deferred maintenance from the last owner or additions you’re making to your new home, there are always small things that need to be tweaked, repaired, installed, built, hung, removed, (etcetera) that may not require a specific licensed professional. Find a great handyperson you can call on unless you’re handy yourself. It will save you lots of time and frustration in the long run. Plus, fixing these things in your home at move-in will help make the transition easier and perhaps save costs in the long run.

Finding Resources and Professionals

Not sure how to find these professionals? Your real estate agent is a great start. They are often using these services and connected to the local contractors and businesses. Also, local online groups including Facebook pages and Yelp are often set up to get others advice and feedback of professionals they’ve used. Other resources include the Better Business Bureau, asking friends and family, or dealing with a past company which you’ve had a great experience.

Homebuyers Expenses When Purchasing a Home — Out-of-pocket expenses when purchasing a home

Buyer Due Diligence — Consider these items when purchasing a home – it’s not just about the house itself!

Expected Costs When Buying a Home

June 22, 2021 by Toby Lorenc

If you’re on the way to purchasing a home and debating your financial situation, let’s look at some of the costs you should expect once you get under contract. This may help you determine if it’s the right time for you to buy or find other sources to help pay for the upfront costs associated with purchasing a house.

Earnest Money Deposit: Your First Out-of-Pocket Cost

Once you start the process of submitting an offer on a home, there are out-of-pocket expenses that you’ll have to be ready for immediately. The earnest money deposit is typically about 1% of the purchase price in the Colorado real estate market, so on a $400,000 home you should expect needing $4,000 in a bank account with immediate access to the money (check, wire, cashier’s check, etc). Although the contract allows for this deposit to be made after the offer is accepted, it’s typical that the seller will want your funds in an account within a few days of a signed contract (usually held at a title company or real estate office in an escrow account). The good news is, this money is truly a deposit and as long as you meet your deadlines and eventually close, you can apply these funds towards your downpayment or other closing costs. In other words, you’ll potentially get the money back but you’ll need the funds available to deposit at the time of your accepted contract.

Home Inspection: It’s More than Just a One Day Event

Your due diligence and inspection period allows for you to do inspections of any kind on the property as long as you’re not negatively altering or damaging the property. This means not only can you do a typical home inspection (in which you hired a home inspector to do an inspection of systems, mechanicals, exterior and interior condition, etc), you can hire contractors for specific issues and inspections. For instance, you may want to have the sewer line scoped, engineering reports of the structural integrity, or substance testing for things like mold or presence of drug residue. Depending on the home inspection company, they can often do testing for things like radon gas levels but there is usually an additional charge. Currently, rates for a home inspection vary depending on the size, age, and other factors of the house, but expect about $400-$500 and then additional items like radon gas and sewer line scoping will run another $150+ each. So, this “inspection amount” can change dramatically based on your concerns and curiosities as a buyer, but it’s not hard to reach nearly $1,000 just for basic inspections. And keep in mind, these contractors and inspectors are paid when the service is rendered so it is a direct out-of-pocket cost while you’re under contract. Also, there are other things that won’t necessarily cost you money but you should definitely consider researching as part of your home inspection period.

Property Survey or Improvement Location Certificate (ILC)

It’s possible that either the lender or title company may require a land survey or ILC. Typically, these are due at time of service and estimated starting cost would be $800+ for this type of service. Usually if the home is in a neighborhood with lot and block, this won’t be a required item. However, during your contract period, you can certainly choose to do this yourself so you are aware of the property boundaries, especially if you’re considering building a new structure, putting up fencing, or expanding the current home.

Downpayment on Your Loan

When you first start the process of searching for a home, you’ll talk with a lender about getting a loan to help pay for the purchase (unless you’re buying with cash). The lender will help find the best type of loan for your situation and qualifications (VA, FHA, Conventional, Jumbo, USDA, etc) and unless you have VA benefits from the military, your loan will probably have a minimum of 3.5% down (FHA) but probably more like 5% down (or more). Based on the type of loan, intended use of property, and other factors this can be 20-25% down. So, with a purchase price of $400,000 you could be looking at $100,000 as a down payment for the loan, and you’ll still have closing costs in addition to that amount. More money down can also reduce your monthly payments, decrease your interest rate, and waive the need for mortgage insurance. Make sure you talk with an experienced real estate agent and your mortgage lender to make sure you understand the entire package and what your monthly payment will be with principle, interest, taxes and insurance (PITI).

Closing Costs

Depending on your offer, a portion or all of your closing costs can be paid for by the seller. However, it’s not as typical in a seller’s market as it directly affects their bottom line. So, assuming your paying your own closing costs this will be a collection of fees at closing in addition to your purchase price and loan downpayment, minus any credits you’re receiving. Closing costs include a variety of processing and document fees, lender escrowing funds for things like homeowners insurance and property taxes, appraisal fees, title company fees, recording and document fees, and any administrative fees charged from the real estate company.

Moving Into Your Home

Keep in mind, these expenses aren’t accounting for the setup of your new home, including things like buying furniture, doing landscaping, basement finishes, interior paint and flooring, or simply maintenance issues that might have come up during your inspection. If you can, start putting money away in a separate bank account as an maintenance fund to pay for large expenses like replacing a roof, driveway, exterior painting, tree removal, flooring updates, etc. Ask your agent first when doing these type of updates to help discover if there are ways to save money and for a list of recommended companies.

Buyer Due Diligence

September 2, 2020 by Toby Lorenc

When purchasing a home, there’s more to think about than just the home itself. There are many factors that may affect your comfort in your new home, both mentally and physically. Make sure during the contract process you do your due diligence as a buyer and research the things that are important to you or might affect your decision to purchase the home. Check with your real estate agent on dates and deadlines to make sure you know the time-frame you’ll want to accomplish this research.

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Property Insurance / Homeowners Insurance

Call your current insurance company and other property insurance companies to compare quotes. Make sure you have the information about the property in front of you (either a MLS sheet or assessor records) and can answer basic questions about the home. The main purpose of this step is to make sure you’re (1) comfortable with the potential rates (2) that the home can be insured based on the current condition.

Substance Testing

During your home inspection phase, you have the right to test for substances in the home as long as you’re not altering or destroying the home. This means you can test for things like methamphetamine, marijuana residue, mold, lead based paint, radon gas, and more.

Sex Offender List

Keep in mind your neighbors will come and go and things can always change around your home. However, if you’re concerned about potentially living around someone who is a register sex offender, you may want to consider doing a search prior to purchasing the home so you’ll at least know where they live in your area. https://www.nsopw.gov/

Crime Rates

Many buyers are curious about the crime rate in the area surrounding their potential home. Whether you’re currently under contract on a house or still searching for a home, knowing the crime stats might help you pick your desired neighborhood. Consider asking locals and friends as well, or get feedback using local area groups on sites like Facebook or Nextdoor. https://coloradosprings.gov/police-department/page/cspd-statistical-and-annual-reports

Flight Patterns, Train Tracks and Highways

Take time to research your proximity to transportation routes which might be a nuisance. Whether it’s noise from a nearby highway or interstate, or the travel patterns or trains and airplanes, some people like the noise and others might regret ever buying a home near these routes. Make sure you experience the neighborhood at different times of day and night, ask the sellers, and do your diligence if you think it’s going to be a concern down the road. Also, check if there are future plans for these types of improvements.

Flood Zone

Check with your agent or use the link below to verify if your home is in a flood zone. If it is, most likely the lender will require you purchase flood insurance (if you’re getting a mortgage to purchase the home), and sometimes even the title company will require flood insurance. Keep in mind, flood zones can change.
https://www.floodsmart.gov/flood-map-zone/find-yours

Building Permits

The history of permits pulled on a property is all public record. You can search any address to find if permits were pulled for home renovation projects, home additions, mechanical systems like a new furnace, plumbing upgrades or fixes, electrical changes and additions, etc. Details including the date and contractor are available on Pikes Peak Regional Building Department’s website.
https://www.pprbd.org/

Let your agent know if there are other things that concern you or that may keep you from purchasing a home. Your agent doesn’t want you to regret the decision or be surprised in the future. Check with your agent on what type of items are required to be disclosed by the seller and get a seller’s property disclosure prior to your home inspection date.

Let Us Find Your Next Realtor

June 18, 2020 by Toby Lorenc

Are you thinking of moving out of Colorado? Our agents have a network of partner real estate agents across the country. We can help you find a real estate agent where ever you’re planning to move next. We like to be transparent about our business so here’s the scoop: when you let us help you do the legwork of finding an agent in another state, we both benefit!

You: get the best agent we can find based on your needs and situation. We’ll pre-screen agents in your desired location and help you connect with them directly.

We: get a referral to do the searching and research for you! Typically, it’s about 20-25% of their commission once you close on your new home.

It takes the guesswork out of finding an agent in an area or city you unfamiliar with.

If you have enjoyed the service your local Colorado Realtor has provided you over the years, let’s partner to get you connect with the next best agent in your journey. Contact your favorite experienced real estate agent and tell them the next stop in your life’s journey. We’ll promptly search, interview, and connect you with another professional that meets our standards. There’s no pressure or cost to you! You get the best of both worlds with the service and professionalism you’ve grown to love from your Berkshire Hathaway agent in Colorado.