What to Know About Researching Your Loan

An article written on a popular website begins with the assumption that you, as the home buyer, are aware that you have the choice to shop your lender.  So let’s start there with the discussion of what you should be learning from the company which is going to be lending you money for what could be the most important investment of your life.

Researching Your Loan

As a home buyer, you have the right to shop your mortgage.  You can and should contact as many lenders, banks, and / or mortgage companies as possible and ask them the costs on application fees, appraisal fees, and the breakdown of your closing costs.  Specifically with your closing costs, you will want to check to see if they are a mortgage broker or if they are the company that has the underwriter who will approve your loan.  A mortgage broker can incur additional fees on top of your loan origination fees. When you contact your lender, you are going to be asking them what their loan origination fees are.  This is a way to “weed out” any unknown loan companies which may have higher fees.

Know Your Title Company

You, as the home buyer, do have some say in the title company that is used by the lender.  The lender works with specific title companies, therefore sometimes gets a better rate that you would as an individual.  However, if you are interested in cross-checking their rates, you can get quotes from title companies as well to make sure that you are not overpaying for those services.

Another big chunk of your closing costs is the cost of your escrow account, if you are doing one.  There is a deposit into your escrow account that is for your taxes and insurance.  If you haven’t yet shopped for the most competitive rate for your homeowner’s insurance, you should definitely do that before you choose your lender or title company.  Your insurance rate accounts for the amount of money that is added to your loan each month in order to pay your annual premium.  The better the rate, the lower the deposit and the lower monthly payment.

On the flip side, you should find out if there are any credits available to you depending on the type of loan that you are getting.  Some lenders are authorized to credit up to a certain amount of money depending on the loan-to-value ratio or the type of loan they are doing. If you are pulling money out of the loan for renovations or to create a home equity line of credit, make sure you get the most amount of money you can at the best interest rate.

Hidden Fees / Down Payment

Once you have done all of your research mentioned above, don’t forget to check with your lender on the following items:

You should find out what interest rates are offered and how much points would be if you chose to “buy down” your interest rate.  Many people don’t know about points, and lenders can sometimes add them into the cost of the loan in order to advertise a better rate to the home buyer.  Make sure that you are getting the base cost of the loan and then the cost of points.  Your lender can break down for you how the cost of points can save you money in the long run by showing how you “pay off” your points and still ssave money of your monthly payments.

Secondly, when you are finding out about the type of loan available to you, find out the specific information about the down payment.  Lending restrictions have loosened up in the last couple of years, so a 20% down payment is not necessarily required anymore to get a loan.

If you are able to obtain a fabulous rate, make SURE to find out exactly when you are required to close if you lock-in your rate in order to be able to keep that excellent rate for closing.  Locking in your rate means, though, that you can’t get a better rate later on, so if you feel like your closing can happen fast, and you have the best rate, go ahead and lock it down to get the most savings.

Click Here for the Source of the Information.

National Lot Size Average Helps Builders and Home Buyers

The number of jobs available in the construction sector have become a positive “negative” for the United States’ real estate market.  Employers are reporting more open positions for construction employees and sub-contractors.  This shortage of workers is actually contributing greatly to the slow completion of new homes for sale on the market.  However, new home sales for single-family detached homes has increased 13% year-over-year, reporting 592,000 homes completed in June, 2016.  Lot size has also started to play a role in the completion of  new homes for builders in an unexpected way. The lack of developed lots has also slowed down new home builders as they are trying to keep up with the demand from new home buyers in the housing market.

However, there is a “silver lining” to the lack of developed lots.  Builders may find that they don’t have to look as hard for lots on which to build because the Census Bureau’s Survey of Construction (SOC) found that new home buyers preferred lots that were less than 8,600 square feet – approximately 1/5-acre lots.  Since an acre is 43,560 square feet, this means that approximately 5 homes could fit comfortably on a space the size of a football field.  This is also good news for first-time home buyers.  The types and sizes of homes that would fit on a 1/5-acre lot would probably fall within the price range of the first-time home buyers.  Most builders paying attention to housing trends build new homes based on buyers’ preferences.  As lot sizes decrease, the availability of affordable housing has the potential to increase.

In Louisiana, the SOC reported that new home buyers buying single-family homes in Louisiana prefer lot sizes that are .16-acre.  This is less than the national trend of 1/5 acre.  Ron Lee Homes in St. Tammany Parish Louisiana can design and build you a completely custom new home either on a lot you already own or on any new lot for sale in the new subdivisions in the West St. Tammany Parish area.  We also have garden home floorplans and smaller square footage floorplans that have been designed and engineered for smaller lots.  New home buyers frequently modify our previously designed floorplans to their specifications in order to have Ron Lee Homes build the home of their dreams.  If you already own your lot or would like to buyer a lot in one of the many neighborhoods throughout the St. Tammany Parish area, Contact Us Today, Call 985-626-7619 or E-mail Info@RonLeeHomes.com.

Click Here and Here for the Sources of the Information.

Cultural Arts District to Move Forward in St. Tammany Parish

St. Tammany Parish will enjoy the benefits of the design and construction of a new arts and education district in 48 acres north of I-12 between the Pinnacle at Nord du Lac shopping center and the Tchefuncte River.  Despite many ups and downs along the way, including the governor’s veto of $11 million in assistance for the construction project, parish president Pat Brister will realize her vision of creating not only a cultural arts district but also an educational facility and program for students on

the North Shore, including the Tangipahoa Parish area.

The entire property includes plans for the cultural arts district, the center of which would be a performing arts center, a children’s museum, and a privately owned commercial development with possibly a hotel and restaurant.  Donation of land for a theater and amphitheater as well as planned nature trails along the river are also part of the project.

Real estate developer Bruce Wainer of All State Financial owns the 48 acres as well as the 80 acres that are adjacent to it.  He plans on donating the land for the children’s museum and the performing arts center which will help alleviate the costs, now that the state government is currently unable to contribute.  The natural part of the property includes wetlands, a river, and a heavily wooded area which will offset the commercial atmosphere of the entire development.

Design elements are being prepared by a team of architects and planners which include Wilson Butler Architects of Boston headed by Scott Wilson, and Fisher Dachs Associates of New York.  Wilson’s vision of the area is that of constant activity both day and night for “kids of all ages.”

“Most performing arts centers are urban,” he said. “Very few projects of this nature have such a pristine, undamaged, unmolested site. It’s a huge responsibility for us to do it right.
“Clearly the land, the trees, the wetlands are your jewel. For us to not really capture that would be a big mistake.”

Even though the funding did not come through as planned, Brister is undettered. Brister, who invited members of the news media to attend part of Wednesday’s session, said the parish government didn’t embark on the project thinking all of the funding would simply fall into place. She said the parish is fully prepared to move ahead with planning and will talk with Edwards about future funding.  In addition Brister said St. Tammany will look for money from cultural arts grants, economic development districts, naming rights and private sources.

Click Here and Here for the Sources of the Information.

Single-Family Home Sales Increase in 2nd Quarter

Single-family home sales increased by almost 24% compared to new home sales in 2015 in April.  Compared to March, 2016’s home sales, single-family home sales increased by almost 17%.  Finally, sales went up to 619,000, an eight-year high during the month of April as well.
Home buyers are taking advantage of the availability of new homes because the inventory of new homes for sale on the market has decreased to a 4.7 month’s supply – a total of 243,000 new homes for sale with only 56,000 completed, move-in ready homes available. Demand will require that builders increase their production of new homes for sale in order to keep up with the buyers.

Single-Family Home Builders

April’s sales numbers go hand-in-hand with the reported new, single-family home starts which increased by 3.3% at the beginning of April.  Builder confidence held steady for the 4th month in a row since February, 2016, which contributed to new construction starts and inventory on the ground.  Single-family home permits in the beginning of April were already up year-over-year by 8.4%, so construction of new homes should continue to escalate over the next few months.

While first-time home buyers are finding it difficult to find new homes for sale in their price range, the sales of homes priced from $150,000 – $200,000 increased to 10,000 sales in April.  For existing home sales, the first-time home buyer sales accounted for 32% of these sales, opening up the market, once again for homes priced affordably.

Good News for Resale Market

Existing home sale closings increased by 6% year-over-year and by 1.7% compared to March’s sales.  It is definitely a seller’s market right now as existing home inventory also stands at a 4.7 month supply like single-family new homes.

The 2nd quarter of 2016 shows good news for the housing market after a slow 1st quarter start.  New, single-family home starts and permits indicate an increase in new home inventory moving forward in the 3rd quarter.  Sellers should be able to “take their pick” of home buyers as supply currently is lagging behind demand.

Click Here and Here for the Sources of the Information.

New Construction Jobs Support Overall GDP

Home building generates a substantial amount of money for local governments and the federal government just by the nature of the industry.  According to the National Association of Home Builders, approximately 90,000 different governments receive approximately $111 million in taxes and fees from the construction and building of 1,000 single-family homes.

Sub-Contractors Contribute Greatest Share

In addition to the governments making a substantial amount of money from home building,

sub-contractors also are reported to make consistently higher wages because of home building.  One of the reasons for this is that sub-contractors actually do the work themselves instead of hiring the jobs out to employees.  Because sub-contractors make up the majority of the workforce when building a new home, the taxes on profit then paid by these sole proprietors also contribute greatly to the overall economy.

Tax Breakdown

The amount of taxes paid to the federal government is comprised mainly of income taxes and social security equaling an amount of $74.4 million.  State and local income taxes comes to $10.3 million, and city and county taxes equal approximately $6.9 million.  Other taxes consisting of impact fees, permit fees, and other fees for new construction bring in a total of $13.7 million.

A breakdown of industries which bring in the revenue shows that construction has the most jobs, and other affiliated companies related to construction such as manufacturing, bring in other revenue.  Other affiliated businesses include trade, transportation, warehousing, finance, insurance, real estate sales, rental and leasing, and professional, management, and admin services. A total of 2,975 jobs are created from building 1,000 single-family homes based on full-time jobs over one year.

Click Here for the Source of the Information.

Interest Rates to Remain the Same According to the Fed

A unanimous decision by the Federal Reserve the first week of June declared that interest rates would remain the way they were. This decision was made after reports revealed that the labor market is still not showing a strong recovery.  Even though there are still job gains across the board, they are slow and business investment has also not picked up.
Home buyers have enjoyed and even taken for granted interest rates that are historically low for the past 10+ years.  For those buyers who have been able to recover and succeed after the Great Recession, it is still one of the best times to buy a new home or buy an existing home in today’s housing market.

Predicted Rise in Interest Rate

Originally, the “Fed” had predicted that there would be two more rate hikes of the interest rate during 2016, but June’s meeting saw 6 members stating that with the slow growth of the economy, they only would really commit to a possibility of one more interest rate increase, citing the normalization of monetary policy taking a longer period of time than expected.
The good news is that the unemployment rate went down by 4.7%, but the gain of jobs in May, 2016, was only 38,000.  Also, the job increases reported in March and April were revised down by 59,000 – a loss of 458,000 in the labor force.

Strong demand still exists for employees and contractors in the residential construction sector.  The BLS JOLTS data shows that builders have approximately 200,000 unfilled positions.  However, during the course of April and May, 9,600 jobs were lost in the residential construction industry, and these jobs are now having to be refilled.

First-Time Home Buyers

Because of the cost of labor and materials to build a new home, first-time home buyers are finding it hard to acquire a new home.  Homes that are priced less than $150,000 account for only 6% of the market according to the National Association of Home Builders.  Currently approximately 31% of the home buyers surveyed expected to be able to pay less than $150,000 for their new home.

New home buyers in the market to purchase a new home will still benefit greatly from the significantly and historically low interest rates.  Any rise in the interest rate in 2016 will still probably keep the interest rate low enough to have affordable house payments.

Click Here for the Source of the Information.

Tax Credits Still Available for Energy Efficient Home Features

New homes which are “green-built” to reduce energy consumption have several benefits to new home buyers.  Many people don’t know that tax credits are still available for the use of energy efficient home features. First of all, because of the usage of the proper insulation, tightly sealed caulking and weather stripping, the home’s interior temperature is more comfortable.  Through the control of air and vapor through the use of air/vapor retarder systems, the humidity of the home is reduced significantly making it a more dry environment.  Because of the insulation and tightly sealed yet ventilated structure of the home, there is a reduction of a significant amount of noise as well.  All of these factors contribute to a peaceful and comfortable living environment for our new homeowners.

At Ron Lee Homes, we use many different energy efficient building techniques.  Because he is Green Building Certified through the National Association of Home Builders, Ron Lee is an expert on applying the latest trends and technologies in building green homes.  Currently, the federal government is offering tax rebates for two different types of energy efficiencies: the Residential Energy Efficient Property Tax Credit, which benefits those who have incorporated renewable energy features into their home, and the Nonbusiness Energy Property Tax Credit, which benefits those who have installed materials that meet the U.S. Department of Energy’s energy efficiency standards.

Energy Efficient Materials

In order to clarify exactly which types of materials will help you in renovating and updating your home, saving you money on your utility bills, and receiving money off of the annual taxes you pay, Ron Lee Homes has provided a description of all of the potential changes or new building techniques you can use that are considered energy efficient enough for the IRS.
First of all, for new home building, you will want to make sure that your thermal envelope is designed and installed to help reduce moisture and air from flowing through your home.  Your thermal envelope includes the wall and roof, insulation, air / vapor retarders which reduce water vapor condensation, windows, weather stripping, and caulking.

A typical home loses more than 25% of its heat through its windows.  In addition to using Energy Star® rated double or triple-paned, energy efficient windows, something as simple as roof overhangs are excellent at providing shade keeping the heat and sun glare off of the sides of the house as well as the windows especially here in Southeast Louisiana.

Amazingly, properly applied caulking and weather stripping will reduce a home’s utility costs by 50%.  Sealing all of the potential places that air and moisture can escape or come into your home can enormously change your home’s environment – creating a less humid place to live with more stable temperatures.

Choosing the properly-sized heating and cooling system and then creating ventilation and air re-usage opportunities throughout the home will let the home “breathe,” which helps with reducing hot and cold air when it is not necessary.

Energy Star® water heaters, refrigerators, washing machines, dryers, dishwashers, lighting, and room air conditioners should be chosen to decrease entergy usage which makes it cost less to use your home appliances.

For more information about building a new home with energy efficient features or renvoting your current home with these features, Contact Ron Lee Homes at 985-626-7619 or E-mail Info@RonLeeHomes.com.

Click Here for the Source of the Information.