Buying and Building a Brand New House: Important Factors on New Home Upgrades

CLICK FOR ORIGINAL ARTICLE  |  WRITTEN BY JAYMI NACIRIPOSTED ONSUNDAY, 06 AUGUST 2017 13:54


Getting ready to buy a brand-new house? Moving into a home that no one has ever lived in before is incredibly exciting. So is picking out all your finishes so everything really suits you. But there are several important factors to keep in mind when it comes to the upgrades and options that are offered by the builder, starting with the fact that anything you choose beyond what is considered “standard” will raise the price of the home.

The home price is just the starting point

Have you fallen in love with a model home that’s all decked out with sleek countertops and fancy appliances and hand-scraped floors and elaborate window coverings? Depending on where you’re buying, you may have to pay more for some – or all – of what you see in the models. The “standard” home is typically a much more stripped-down version than what you’re shown in the model complex.

Want to make changes to the floorplan or select higher-end finishes? Be prepared to pay for them. “A surprisingly large amount of the money you spend on your new home will be determined by the options and choices you make,” said NewHomeSource.

You may be limited in the options you can choose

If you have something specific in mind and you don’t see it offered by the builder, always ask your real estate agent or the sales professional in the new-home community. Depending on how flexible they are, you might be able to negotiate custom-ordered items into your home. Or, it may turn out you’ll have to compromise, or add in the items after the home is finished… which isn’t always such a bad thing.

It might make sense to hold back a little

Two more great benefits of adding upgrades from the builder:

  1. The work is done before you move in.
  2. The upgrades are included in the builder’s warranty.

However, you definitely pay for those conveniences. If you price compare some of the items you’re looking at adding, like countertops or flooring, you might find that you can get them for much less elsewhere. Many of the upgrades offered by builders are huge profit centers for them. If you’re willing to go through some renovations after you take possession of the home and either pay out of pocket or finance those options elsewhere, you could save some money.

You can roll your upgrades into your mortgage

But, having to spend thousands of dollars out of pocket for upgrades after you’ve just spent so much money on your new house may not seem ideal. An added benefit to handling your upgrades through the builder is that you can roll the added costs right into your mortgage instead of having to deal with a separate payment that might have a higher interest rate. The payment may be nominal – $10,000 in upgrades could cost you about $50 a month. But, you’ll have to make sure that the additional cost doesn’t push you over your loan approval amount.

You may have to go back to your lender for more money

If the new home you’re buying is already at the top of what you’ve qualified for and you’re raising the overall price with thousands of dollars of upgrades, a conversation with your lender is in order. If you can’t raise your qualification amount, you’ll have to whittle down those upgrades.

Not all upgrades will bring you ROI

Making smart choices is key when picking your upgrades, because not only do you want to create a home that suits your needs, style, and taste, but you also want to make sure the money you’re spending will pay you back when you go to sell someday. Yes, thinking about selling a new home you’re just now buying may seem odd, but it’s all about return on investment (ROI). If you’re not thinking about it when you’re spending your money, you might not get that money back later on.

When considering where to spend, concentrate on the kitchen first. “The kitchen is the heart of the home, the spot where you will spend the majority of your time and make the most memories,” said NewHomeSource. “It can never be overly well equipped. Pay special attention to cabinets and appliances, as this is what future buyers will focus on, as well as the tools you will use every day.”

“What You Need to Know About VA Loans”

by Meghan Webber with the Lansing State Journal

“Since its inception in 1944, the VA loan program has helped more than 20 million veterans and their families experience the pride of homeownership. While the VA loan process is quite similar to that of a conventional loan, there are differences and advantages that some veterans may not be aware of.

Significant savings

VA loans are mortgage loans issued by approved lenders and guaranteed by the U.S. Department of Veterans Affairs. One of the biggest advantages of a VA loan is that qualified buyers are able to buy a home with virtually no money down. In fact, about 90 percent of VA buyers purchase a property with no down payment.

This feature is different to other government-backed loans, like those backed by the Federal Housing Administration (FHA) and the U.S. Dept. of Agriculture (USDA), which both enforce PMI. This advantage is often overlooked, but the benefit can mean significant monthly savings for VA buyers.

Although the costs of acquiring a VA loan are generally lower than other conventional loan programs, there is a one-time funding fee paid directly to the VA, which is “used to offset the few loans that go into default, and further reduces the cost to taxpayers, ensuring the VA Home Loan program continues for future generations.” The amount varies, depending on the nature of the borrower’s service, if any down payment was made, or whether the buyer has a prior VA loan. Borrowers with service-connected disabilities are typically exempt from the funding fee.

While there is no maximum loan amount, the VA does limit its guaranty. Depending on eligibility, in most areas of the U.S., a veteran can borrow up to $417,000 without a down payment.

Who is eligible for VA Loans?

The sad fact is that many eligible veterans are missing out on this beneficial program. REALTOR.com says that VA surveys show that about 1 in 3 home-buying veterans aren’t aware of this benefit. While it may not necessarily be the best fit for every veteran borrower, it’s a great option to explore.

According to the VA, eligible applicants include; veterans who meet “length of service” requirements; service members on active duty who have served a minimum period; certain Reservists and National Guard members; and certain surviving spouses of deceased veterans. There are other groups that may be eligible, so check with your lender or contact the VA Eligibility Center at 1-888-768-2132.”

~Meghan Webber

If you have any questions, CONTACT US today!

 

At Refined Lending, we believe that buying a home should be a painless process; especially for those who have risked it all for our country. Our team is built of educated and devoted VA home loan specialists who are experienced in streamlining the loan process for Veterans, Active Military, and Military Spouses. We are honored to work for the men and women who served in the armed forces, and are proud to put our knowledge and experience to work for them.

VA Home Loans are different than regular loans. There are different rules, different restrictions, and luckily, most differences are designed to benefit the Veteran. We provide all of the details and information to the buyer, ensuring they feel prepared for what lies ahead. Continue reading below for information on;

  1. fees you never pay
  2. costs that a veteran is allowed to pay for
  3. interest rates
  4. adapted housing grants
  5. and more!


Costs that Veterans Never Pay

According to Veterans United, there are several fees that you cannot pay as a veteran:

  • Termite or pest inspections on purchase transactions
  • Realtor commissions or a mortgage broker fee
  • Loan prepayment penalties
  • Attorney fee that benefits the lender (non-title work, basically)

Additionally, Military.com says that veterans can’t pay for:

  • Underwriting
  • Escrow
  • Processing
  • Document
  • Tax Service

Costs that a Veteran is Allowed to Pay for

Military.com states that the best way to remember which costs a veteran is allowed to pay for is to use the acronym ACTORS:

A– Appraisal

C– Credit Report

T– Title Insurance

O– Origination Fee

R– Recording Fee

S– Survey

Interest Rates

  • We offer interest rates that are substantially lower than the national average; 0.5% – 0%
  • According to the U.S. Department of Veterans Affairs, Interest Rate Reduction Refinance Loan (IRRRL):also called the Streamline Refinance Loan can help you obtain a lower interest rate by refinancing your existing VA loan
  • Additionally, the department sates that Purchase Loans help you purchase a home at a competitive interest rate often without requiring a down payment or private mortgage insurance.

Adapted Housing Grants

The U.S. Department of Veterans Affairs states that Adapted Housing Grants, which help Veterans with a permanent and total service-connected disability purchase or build an adapted home or to modify an existing home to account for their disability are required in a VA Home Loan. For more information, visit The U.S. Department of Veterans Affairs website today!

More Information

  • According to The Mortgage Reports, the advantages of a VA Home Loan are endless:
    • Lower rates
    • VA loans require no minimum down payment
    • They do not require mortgage insurance ever
    • There is no prepayment penalty
    • The closing costs are limited
    • an assumption feature that allows other VA-eligible borrowers to take over your loan in the event you sell your home
  • The Mortgage Reports also mention that the Requirements to receive a VA Home Loan are minimal
    • Show us that you are VA-eligible (we need a Certificate of Eligibility also known as a COE)

For even more information on why a VA Home Loan has so many benefits; visit the VA Home Loans page today!