How to Fulfill Your Fantasy With a Custom Home

If you dreamed as a child of someday owning a home with your own dance studio and ballet barre, or a personal game room with a Skee-Ball machine alongside an indoor putting green, then a custom home may be your best option to making that dream come true.
While buying a home fulfills a big part of the American Dream, building a home to your specifications elevates the experience. Before you begin to make decisions about your future home, you will need to spend significant time learning about the custom-home building process.
Organize Your Financing
Building a custom home isn’t necessarily more expensive than buying a newly built or existing home since it’s possible to build a small custom home, but sourcing all materials on an individual basis rather than in bulk can raise the price above production homes. The important thing to understand is that your decisions about the land you buy, and the design and quality of construction you choose will impact the final price.
Financing a custom home requires a construction loan, something not all lenders offer. If you don’t already own land, you will have to finance the land purchase and then the construction. Often you will have two closings, each incurring settlement fees.
Since building a custom home is considered risky by lenders, you typically need excellent credit and a down payment of at least 20% to 25% to qualify for a construction loan. In addition, lenders typically require more cash reserves for borrowers who are building a custom home to ensure that they have funds in place for any glitches that extend the construction period.
Make sure you check into appropriate insurance, too, during the construction period.

Read more of this article originally posted at: http://www.realtor.com/advice/fulfill-fantasy-custom-home/

Trouble Pulling the Trigger? Here’s How to Commit to Homeownership

You’ve saved for a down payment. You’ve pored over the local listings for months. Touring open houses has become part of your weekend ritual. But months, perhaps years, have passed and you are still in your rental.

For many first-time homebuyers, pulling the trigger on a purchase can be a frightening experience. Will you be happy there? Will you like your neighbors? Will you be tied down—house rich and cash poor? What if you lose your job? Will you hate your commute? In short, your fears stem from the unknown.

Meanwhile, your current home is familiar. You’ve come to accept its shortcomings—the loud neighbors, the leaky ceiling, the scant street parking. It has few surprises.

Take Paolo Forte, the eternal condo-shopper, who looked for years in Boston.

“I have actually seen condos come on the market, sell, and then be resold a second time,” Forte said. “While I’ve been waiting, condo prices continue to rise, and I keep spending more money on rent.”

In Betsy Townsend’s years as a REALTOR® in Boston’s pricey Beacon Hill, she’s seen everything.

“I find that people often hesitate to make the ‘biggest purchase of their life’ because they fear they will make a ‘bad investment’ and pay too much,” Townsend said. “Sometimes people lose sight of the fact that they are looking for a place to live instead of just an investment.”

Still, there’s hope. Your family, friends and co-workers took the leap and are reaping the benefits. 

Check out the full article and give these steps a try and you could be one of them: http://www.realtor.com/advice/trouble-pulling-trigger-tips-making-move-home-ownership/

First-Time Homebuyer? Be Prepared for Closing Costs

When you are financing a home purchase rather than paying cash, you need to be prepared to pay some initial fees aside from your first monthly mortgage payment.

If you are purchasing a newly built home, sometimes your builder will cover some of these costs as an incentive for buyers to purchase a home, finance it with a preferred lender and go to settlement with a preferred title company. Resale buyers are also sometimes able to negotiate with the sellers to pay some closing costs depending on local market conditions and the individual terms of the sale.

When you arrange your financing with a lender you should receive an explanation of anticipated closing costs and a Good Faith Estimate. You may even see more than one estimate before you go to settlement, where you will see the final version of the HUD-1 Settlement Statement, a federally mandated form for all mortgage borrowers regardless of whether you are refinancing or purchasing a home.

In general, the fees associated with a home purchase include closing costs, loan discount points and prepaid items.

For full article visit: http://www.realtor.com/advice/costs-associated-home-loan/

To Buy or to Build?

Building a new home has it's perks such as options only limited by your budget, but where will you get the best "bang for your buck"?

Time to upgrade to a new home?  There are 3 ways you can buy a brand-new home

·          buying a house already built on spec;

·         having a semicustom home built as part of a development (you can choose from a set palette of finishes and upgrades);

·         or having a purely custom home designed and built to your specifications.

But don’t get so caught up in the sparkling new paint and granite countertops that you forget to make a good deal!

Evaluate the Pros and Cons of a New Home

·         New homes are typically further from the city center; how much time and expenses will you have commuting?

·         Are you willing to put time into growing a new lawn, and can you wait 20 years for sapling trees to mature?

·         Will the cookie-cutter nature of new subdivisions suite your style??

·         Do you mind the closeness and potential lack of privacy? New homes in subdivisions don't have space for much privacy.

Evaluate the New Neighborhood

·         Check with the developer about potential homeowners' association (HOA) fees and rules; some are very expensive -- and even more strict. They may not allow storage sheds, certain paint colors or finish materials, solar panels or even vegetable gardens. Be sure to find out if the HOA can assess penalties for infractions.

·         Ask whether cable and Internet are readily available and from what companies; your new house will be wired for cable but that does not mean the cable company currently offers service to your new neighborhood.

·         If the development is still under construction, you’ll be dodging giant contractor trucks and facing construction noise at 7 a.m. for a while.

Don’t Skip the Homeowners Inspection

·         Never assume that because a home is newly constructed, it isn’t going to have defects. Make your sales contract contingent on a final inspection by a professional you hire.

·         If it is at all possible, have the home inspected during each phase of building, when potential problems are easier to spot.

·         Know that municipal inspections for code violations are nowhere near as thorough as an independent professional inspection is.

Protect Yourself with Warranties

·         All new homes come with an implied warranty from the builder stipulating that any major defect of the structural integrity of the home must be repaired.

·         You should ask for a builder’s warranty for a period of time following move-in (a year, for example) that covers any defects in craftsmanship.

·         Preferably, this warranty should be backed by insurance.

·         Make sure any warranty you receive explicitly states what is covered and what isn’t, and what the limitations for damages are.

·         For extra peace of mind have your real estate attorney again look over the warranty to make sure it’s covering your concerns properly.