The Advantages of Buying a New Home

The Advantages of Buying a New Home

For many home buyers, the choice between a resale home and a brand new home is easy: new homes offer a whole range of advantages that are simply not available in a resale property. Here are some of the reasons that have convinced others to buy new.

You know what you get. With a new home, there are no surprises when you move in. You know how the house was built and what went into it-what you can see and what is hidden behind the walls. You also know exactly how to operate and maintain your home's systems and equipment. If you have questions later, your builder will be there to give you a helpful and accurate answer.

You get what you want. Why live with other people's taste in interior decoration? Or spend the next few years redoing the previous owners' home improvements when you can get what you want from the very start. From layout to cabinets to carpeting, new home builders offer a wide selection of standard and up-grade options. You can pick and choose what suits your own lifestyle, personality and budget.

High-quality construction. The technology of home building has improved tremendously over the past few decades and new homes are built better than ever before. They are solidly constructed and well designed for today's lifestyles. They are highly energy efficient, with excellent indoor air quality. From heating systems to roofing shingles and windows, today's building products work better, last longer and often look better. The result is a brand new home that is far more comfortable and healthier, easier to maintain and more enjoyable to live in.

You know the builder. In the end, the quality of your home depends on the quality of your builder. When you buy a new home, you also buy the company's reputation in the community, its track record with past clients and its commitment to customers. That adds up to extra confidence and reassurance for you.

Well-designed communities. New developments are designed to foster a spirit of neighbourliness by carefully balancing private and public areas. Increasingly, verandahs and porches present an open and welcoming facade towards the street, while garages are located at the side or back of homes. Walkways and bikepaths meander through developments, and playgrounds and ballparks keep youngsters safely occupied. "Neo-classical" developments are now appearing that reflect villages of bygone days, with homes close to the sidewalk, white picket fencing throughout, a "commons" area-some with a bandstand or clock tower-and village stores to serve the community. These developments are attracting a lot of interest from both builders and consumers.

Warranty. Resale homes simply do not come with a comprehensive warranty. If something goes wrong, you have do deal with it, there and then, no matter what it costs. Buying a new home, on the other hand, offers peace of mind. Professional builders stand behind their work with an after-sales service program and a guaranteed third-party warranty. Your builder will explain how this warranty works so you can be sure you are getting the coverage that you want. Ask to see a copy of the warranty document, before you sign a contract.

You know what your housing costs will be. This allows you to budget properly and with confidence-great news for first-time home buyers. With today's low interest rates and competitive housing prices, home ownership need not cost any more than what you spend on rent.

When you buy new from a professional builder, you are in control. You know what you get, and you will get what you want. You also know what itjavascript:void(0) will cost, today and in the future.

Contact New Home Specialist Eric Kistner at 423-218-2008 to answer all of your home buying questions.

The Edinburgh Move – Trade in program

The Edinburgh Move – Trade in program
By Eric Kistner

Introducing the “Edinburgh Move.” This program allows qualified homes to be “traded” for a new Maverick Home! You as the client have the luxury of not having to move twice; your new home is built while you still live in your existing home. It is now simpler than ever to buy a new home in Kingsport!

With historically low mortgage rates, this program further enhances the clients’ opportunity to purchase now and take advantage of these awesome rates, and lower building costs.

It’s simple. You work with Edinburgh Homes’ professional home designer to create your dream home. Once your new home is complete, Edinburgh Homes buys your existing home for a pre-agreed price, and you close on your dream home the same day.

Edinburgh Homes has three communities to choose from, or will work with you to find just the lot to suit your needs. An extraordinary opportunity exists in the marketplace. Low mortgage rates, low building costs and the opportunity to sell your existing home is why we created the Edinburgh Move Program.

Visit us today to determine if your home and home purchase criteria qualify for the “Edinburgh Move” trade program.

Check out our website at edinburghcommunity.com or give me a call at 423-366-0431

Cost vs. Price - What higher Interest Rates can do to your purchase power.

Cost vs. Price  - What higher Interest Rates can do to your purchase power.

A good rule of thumb is for every 1% increase of interest rate there is a 10% decrease in 

purchase power. It's surprising to most buyers. This new year is going to bring many new opportunities to find a home. If you are still possibly considering a purchase you may want

to know this very important particular bit of information.

The higher interest rates go, the less home you and your family will be able to afford, finance 

or purchase. If you were looking at property in the $500,000 range and interest rates were at 

4.23% now they will eventually steadily be going up to 5.23%, meaning that if you wanted to 

keep your mortgage payment the same you would only be able to purchase a $450,000 home. 

Even with a 1/2% change in interest rate it can effect your purchase power greatly. I 

recommend getting back into finding a house as soon as possible to get the most house 

for your dollar, before interest rates go up and property prices stay the same.

Please see this example to show your buying power depending on what interest rate you 

lock your loan in at.

As a buyer it's vital to know your market and what options you have. I'm here to guide 

you through the process. If you have any questions email me: edinburghhomes@gmail.com 

or give me a call at 423-366-0431

First Time Home Buyers

Kingsport New Homes

Congratulations on deciding to purchase a new home. You’ll always remember the feeling that comes with buying your first home. The process requires quite a bit of careful research, but that doesn’t mean it has to be difficult. Ask any of our homeowners who have chosen Edinburgh Homes, and they’ll tell you the same thing: When it comes to buying a house, don’t settle for less. From the minute we break ground to the day you move in and beyond, we’ll make sure all the details are right. Because at Edinburgh Homes, we’re just as excited as you are.

Owning Verses Renting

What are the advantages of owning verses renting a home?

It's never too early or too late to plan for your future. Paying $750 rent per month now is the equivalent of buying a home for $100,000. In 40 Years with approximately 4 percent inflation per year, your $750 per month rent may increase up to $3,600 per month. With owning you could have your mortgage paid off in as little as 15 years. Owning a home is a very wise investment. Over time you should build up equity that can be used to pay for home improvements, a bigger home, etc. Real Estate historically is one of the most stable markets available to invest your money in. There are also tax advantages to owning. The interest you pay on your mortgage may be tax deductible. Talk to your tax preparer for more information.

Buying a home is probably the biggest financial commitment you'll ever make. Buying a home is not just a dollars-and-cents investment; it's an investment in your life. It will create a sense of stability and identity for you and your family. Regardless of how times change, owning a home remains the cornerstone of the American dream.

The benefits of buying, when able to, far outweigh those of renting. But in the long run, owning a home is extremely important since your home is one of the biggest investments you can make. The key to this is home equity. Equity is essentially the value of the home.

Here are just a few of the many advantages to owning vs. renting

• You can build equity     No matter how much rent you pay, 100 percent of your apartment or house still belongs to your landlord. But every time you make an amortized mortgage payment, you own a little more of your house. Initially, interest makes up the vast majority of your payments, but the proportion is constantly shifting in your favor. If real estate values rise, you’ll be even farther ahead. The longer you plan to stay put, the more of this benefit you will reap.
• Tax Deduction      You can usually deduct mortgage interest on your tax return, which can mean big savings. If you’re in a 28% tax bracket and have a $150,000 mortgage at 7%, the first full year you own your home you’ll most likely be able to deduct more than $10,000 in interest. That translates into a tax savings of almost $3,000. In addition, even if you sell your principal residence for more than what you paid, you may not have to pay capital gains taxes. (There are limits, so consult a financial advisor for advice on your particular situation.)
• Pride of ownership      A house may be an investment, but first and foremost it’s a home for your family. Even without the financial benefits, many people like the stability and sense of pride that comes with owning a home. You can renovate it to suit your own needs, plant a vegetable garden in the back and let the cat scratch the walls knowing there’s no landlord to impose his or her rules.

Why Buy a New Edinburgh Home?

• Choices      When shopping among existing homes, you have to take the previous owners' style into consideration. Do you pay even more to redecorate or do you make do with someone else's choices? A new Penn Home, however, provides you with numerous design, color and material options.
• Modern Appliances      Appliance manufactures introduce new models every year and Penn Homes is able to offer you the latest state-of-the-art equipment at the time of completing your new home.
• Floor Plans     Take a tour of many existing homes and you will find dated floorplans. We offer you a variety of modern layouts and styles to suit your family's needs and lifestyle.
• Low Maintenance    Why worry about constantly maintaining your home if you don't have to? A new Penn Home offers the latest and greatest materials that technology can offer. New Homes are virtually maintenance-free for many years.- 

Please visit our website at edinburghcommunity.com if you have any questions or please feel free to email me directly at edinburghhomes@gmail.com

New Windsor Aughtry Home in the Edinburgh

MLS 302013

Amazing new home built by Windsor/Aughtry in the beautiful Edinburgh Community is now complete. Welcoming you into this traditional yet modern home is an airy two-story foyer and loft. Three bedrooms and 2 ½ baths offer great space, including 4th br/study on the main floor. There are many upgrades on this model including granite. The master suite is located on the second floor with a luxurious master bath that features his and her separate vanities as well as a garden tub and separate shower for your convenience. The laundry room is also located on the second floor to be easily accessed by you and your family. Approximately 2219 square feet. There are many plans available from Windsor/Aughtry between 1512 and 2973 sqft. Buyer/buyer's agent to verify all information about this new home in Kingsport.

8 Tips for Finding Your New Home

8 Tips for Finding Your New Home

A solid game plan can help you narrow your homebuying search to find the best home for you.

1. Know thyself. Understand the type of home that suits your personality. Do you prefer a new or existing home? A ranch or a multistory home? If you’re leaning toward a fixer-upper, are you truly handy, or will you need to budget for contractors? Where have you searched for new homes in Kingsport? Have you been to the Edinburgh?

2. Research before you look. List the features you most want in a home and identify which are necessities and which are extras. Identify three to four neighborhoods you’d like to live in based on commute time, schools, recreation, crime, and price. Then hop onto REALTOR.com to get a feel for the homes available in your price range in your favorite neighborhoods. Use the results to prioritize your wants and needs so you can add in and weed out properties from the inventory you’d like to view.

3. Get your finances in order. Generally, lenders say you can afford a home priced two to three times your gross income. Create a budget so you know how much you’re comfortable spending each month on housing. Don’t wait until you’ve found a home and made an offer to investigate financing.

Gather your financial records and meet with a lender to get a prequalification letter spelling out how much you’re eligible to borrow. The lender won’t necessarily consider the extra fees you’ll pay when you purchase or your plans to begin a family or purchase a new car, so shop in a price range you’re comfortable with. Also, presenting an offer contingent on financing will make your bid less attractive to sellers.

4. Set a moving timeline. Do you have blemishes on your credit that will take time to clear up? If you already own, have you sold your current home? If not, you’ll need to factor in the time needed to sell. If you rent, when is your lease up? Do you expect interest rates to jump anytime soon? All these factors will affect your buying, closing, and moving timelines. A new home in Edinburgh, Kingsport, can be constructed in 120 days.

5. Think long term. Your future plans may dictate the type of home you’ll buy. Are you looking for a starter house with plans to move up in a few years, or do you hope to stay in the home for five to 10 years? With a starter, you may need to adjust your expectations. If you plan to nest, be sure your priority list helps you identify a home you’ll still love years from now.

6. Work with a REALTOR® Ask people you trust for referrals to a real estate professional they trust. Interview agents to determine which have expertise in the neighborhoods and type of homes you’re interested in. Because homebuying triggers many emotions, consider whether an agent’s style meshes with your personality.

Also ask if the agent specializes in buyer representation. Unlike listing agents, whose first duty is to the seller, buyers’ reps work only for you even though they’re typically paid by the seller. Finally, check whether agents are REALTORS®, which means they’re members of the NATIONAL ASSOCIATION OF REALTORS®. NAR has been a champion of homeownership rights for more than a century.

7. Be realistic. It’s OK to be picky about the home and neighborhood you want, but don’t be close-minded, unrealistic, or blinded by minor imperfections. If you insist on living in a cul-de-sac, you may miss out on great homes on streets that are just as quiet and secluded.

On the flip side, don’t be so swayed by a “wow” feature that you forget about other issues—like noise levels—that can have a big impact on your quality of life. Use your priority list to evaluate each property, remembering there’s no such thing as the perfect home.

8. Limit the opinions you solicit. It’s natural to seek reassurance when making a big financial decision. But you know that saying about too many cooks in the kitchen. If you need a second opinion, select one or two people. But remain true to your list of wants and needs so the final decision is based on criteria you’ve identified as important.

No Excuse Not to Buy a Home Now

Could it be that some people waited too long to get a good deal on a home? Birmingham, Alabama REALTOR® Charita Cadenhead says ‘yes’ and shares her reasons why in a recent post.

“Potential homebuyers [have] chose[n] the absolute worst time to stall on buying a home. Interest rates are at an all time low, foreclosures are rampant, presenting an endless possibility of getting more house for their money, and more choices than they’ll ever have. And yet, they waited and waited and continue to wait. What they have done is ‘waited’ themselves out of an opportunity.

Now on the seller side (and we’re talking about traditonal, non-foreclosure sellers), a small window of opportunity has opened the door for owners of non-foreclosure properties to capitalize on the current processing freeze on foreclosure properties. Current sellers have been complaining about having to compete with foreclosures in their neighborhoods. Now that banks such as Bank of America have put a freeze on foreclosures (listed, processing and pending sales, etc.), a boatload of the competition has suddenly vanished.

That being said, what excuses do home sellers have now to wait?

• They have less competition in the market place
• More negotiating power in the interim
• The attention of more buyers who are now intimidated by foreclosures (they’re thinking that foreclosures may not be such a great deal after all)

While sellers may not get maximum dollar, if they play their cards right, they can certainly get more than they thought. This current real estate market is a market of opportunity and sometimes there’s only a small window of opportunity. Sellers can be like buyers have been and ‘wait’ themselves out of a golden opportunity. Or they can ‘get off the pot’, as they say, and take advantage of the best opportunity in the past two years.

Any seller that has been contemplating the sale of their home would be wise to jump not only at this window of opportunity, but through it. Sellers should learn a valuable lessons from the many potential buyers who missed their window of opportunity. Just for once in their lives, they need to take the leap of faith and be an opportunist.”

Click here to read more blog posts by Charita Cadenhead.

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If you are looking to buy are sell a house, please don't hesitate to give us a ring at 423-218-2008

The Ten Biggest Mistakes in Home Buying

The Ten Biggest Mistakes in Home Buying

1. Not doing your homework
You’ve probably heard the old maxim: “Knowledge is power.” Nowhere is this truer than in real estate. With a price tag that’s two or three times your annual salary, if ever a purchase demanded preparation it’s home buying.

It can be overwhelming when you think about all the factors that can affect a home’s value: its location, the school district, deed restrictions, taxes, amenities. That’s why it’s imperative that you do your homework before you start. With all of the information available today on the Internet, from Realtors and in housing guides, there’s really no excuse for entering the market ill-prepared.

2. Trying to make a shrewd investment
It’s easy to think we are all financial geniuses. No doubt some of you are. So, Mr. Gates and Mr. Buffet, you have my permission to move on to the third biggest mistake in home buying. As for the rest of you, forget everything they told you in that late-night infomercial. While real estate investing can make a great career, it’s no place for amateurs.

As simple as it may sound, when it comes to buying a home, your best bet is to choose one that appeals to you. The chances are very good that if you like it others will, too.

Am I suggesting that you throw caution to the wind? Lead with your heart and not with your head? Absolutely not, but if you choose a neighborhood where you and others like you want to live and a home that’s attractive and structurally sound, then you probably won’t go wrong. If you want to be known as a shrewd real estate investor, then wait at least three to five years before selling and you can tell everybody that you outguessed the market.

3. Choosing a poor location
OK – you’ve found the perfect home. It’s in a good school district, it’s got great curb appeal, a terrific floor plan that fits your family and the price is right. The only drawback is the bowling alley that backs up to it. Walk away.

Nothing spoils life and resale value like a poor location. If it bothers you now, don’t think you will learn to live with it. The flood lights from that office building across the way will only get brighter with time. The planes on final approach to the airport will only get louder and more frequent.

The best looking home, the most extravagant landscaping, tall fences, and insulated windows will never overcome a homesite near a pig farm (no offense to pig farmers).

4. Overlooking an inferior floor plan for an attractive exterior
I don’t mean to downplay the importance of curb appeal. A home that turns your head as you drive down the street can be a real asset. Resale will be a lot easier if you don’t have to stand on the curb shouting, “No, wait! I know it looks bad, but this home’s got great personality!” If the romance doesn’t continue when you open the door, then you’ve got a problem that will be difficult to unload.

You want a home that makes your heart beat faster when you first open the door. It’s got to have a layout that makes people feel comfortable, one that responds to the way we live today. Open. Friendly. Functional.

I’ve seen it happen a hundred times. Buyers approach a home with an exterior they’re not crazy about, then they discover a fantastic floor plan, and when they come back out, the exterior seems to have magically improved.

If I had to choose between a good-looking exterior or a knockout interior – and I couldn’t have both – I’d choose the great interior any time. After all, that’s where you live every day.

5. Not considering how your family wants to live
We all carry around a mental picture of the perfect home. If you’re a child of the 60’s your ideal home probably looks like the Cleaver’s house. Younger shoppers may be searching for the Brady’s or the Cosby’s home, or maybe even the Taylor’s home from Home Improvement. These images seldom fit the way we really live.

It’s also not about finding a home your parents would like (unless they’re helping with the down payment). It’s not choosing a home your best friends would want.

This home only needs to fit one family – yours. Your comfort and happiness depends on how well you can judge that fit.

Start by thinking of how you live now. Try not to be influenced by those fantasies of how life would be if only you had the right home. If your idea of fun is watching reruns of Jeopardy in your pajamas, then look for a TV room that accommodates your favorite naugahyde reclining lounger. If you like to have friends and family over for informal get-togethers, then look for a large kitchen that’s open to the Family Room. How many rooms do you need? How should they be arranged? Master up or down? Will you have use for a home office?

Don’t overlook how your family lives outside, as well. Will you use a pool or would a hot tub suffice? Do you like to garden and work in the yard, or would you rather have less maintenance?

If you’re buying a used home, you’ll have to look beyond the current owner’s décor and furnishings. If it’s a builder’s furnished, new model home, the toughest part will be facing the fact that the decorator and furniture don’t come with it. If you’re honest with yourself, you can find a home that will fit your family and feel like…well, home.

6. If buying a resale, not having the home properly inspected

I can’t emphasize this one enough. When you find your dream home, it’s love at first sight. As with all love affairs, you begin to lose your objectivity and see only what you want to see. “OK, so the foundation is cracked. But, isn’t this the cutest little window you’ve ever seen?” Now is a good time to seek professional help.

They’re called structural and mechanical inspectors. Good ones are worth every penny you pay them. A good one is licensed by the state (ask to see his or her certificate) and has no personal relationship with you, the seller, or the Realtor. This is someone you pay for a professional, unbiased opinion about the structural integrity and mechanical performance of the home you’re planning to buy. They will inspect every major component of the house from the foundation to the rafters, including the central air, furnace, water heaters, plumbing and electrical. You will also want to have the home inspected for termites. As much as it may hurt to hear something negative about the one you love, this is when you want the ugly truth.

Many resale homes were built when energy codes were more lenient or nonexistent. Independent third-party performance verification inspections that test for energy-efficiency can make a big difference in the performance of your home and its effect on your pocketbook.

You and the seller will be given a written report with a list of items that must be repaired before you close the deal. Usually the contract spells out limits on what the seller is obligated to pay for repairs. If the cost of recommended repairs exceeds this amount and the seller is unwilling to pay for them or to adjust the sales price, DO NOT proceed. (You may elect to pay the difference if the overall deal is still a good one.) This could be the toughest decision of your life, but ignore the engineer’s warning and you will live to regret it

7. If buying new, failing to check out the builder’s reputation

If you’re shopping for a new home, you probably know where you want to live, so you’ll be comparing Home Builders in that area of town. You’ll look for home designs that appeal to you in a price range you can afford. Once you’ve narrowed your search to one or more builders’ homes, your next step should be to take a long hard look at the builders. Here are the most important questions you should answer about any builder before you let them build your home:

How long have they been in business?

How many homes have they sold?

What do their Homeowners think of them?

How many of the Homeowners would buy from the builder again?

What do other builders say about them?

What industry recognition have they received?

What does the Realtor community think of them?

What kind of warranties do they offer?

Do they have a department solely dedicated to warranty issues?

Do they have an energy-efficiency or green building program?
The best way to check out a builder is to ring some doorbells and knock on doors. Visit the neighborhoods where they build and ask Homeowners about their experiences. You should talk to at least three to five neighbors and get a consensus before you make one of the largest investments of your life.

If you don’t get satisfactory answers to most of these questions, choose another builder. If none of them pass this test, choose another part of town. Beyond all the fancy advertising and hype, builders have only one thing of real value: their reputation. If the one you’re considering doesn’t have a good one, they shouldn’t get your business.

8. Not getting what you want because you’re impatient

To borrow a phrase from the Rolling Stones, time is on your side. Show me someone in a hurry to buy and I’ll show you someone who pays too much. There are a lot of things you can rush into and recover from later, but this does not include marriage or buying a home. Never, ever, ever, rush into buying a home. Have I made my point yet? It is the single largest investment most of us ever make. It requires an enormous amount of energy, effort and research. It takes time to do it right.

You need time to do your homework. You’ve got schools to check, tax rates to compare, mortgage companies to shop, neighborhoods to drive, and – if it’s a new home – you need to check the builders’ reputations (See #7 above).

If it’s a used home, you need time to negotiate. Seldom should you pay the “asking price” on a used home. The longer you can take, the better the deal you can usually make. If you find yourself in an unavoidable time bind because of a transfer or the impending sale of your home, try to make arrangements to delay the purchase. You can always store your non-essential things and rent in the interim. Sometimes people who purchase your home are willing to lease it back to you on a pro-rated basis if you need extra time. It doesn’t hurt to ask and it could save a lot. Do the math. If patience can save you $5,000 on the purchase price, wouldn’t that be worth it?

Whatever you do, even if you don’t have time and you must move forward, try not to show it until after the price is set.

9. Waiting for a better time to buy based on the market
and interest rates

Buy low. Sell high. It’s a great plan if you’re a fortuneteller, but for the rest of us mere mortals, here is the best advice for when to buy a home: There is no time like the present. You know what houses cost. You know what interest rates are. You know you have a job (If not and you’re not independently wealthy, maybe you should consider putting it off).

Warren Buffet says, “the rear view mirror is always clearer than the windshield.” Looking back, we can all see when the best time to buy a home would have been –it is hard to find a better time than the present. Who can predict the future? The best we can do is learn from the past. History shows that those who purchased homes and kept them for three to five years or more did better than those who didn’t. How can you argue with that?

Will interest rates be lower some day? Maybe – then you can refinance. Will home prices ever be significantly lower? Probably not. Will you be making money in the future? We all hope so. Do you have a crystal ball? Stop your waiting. Just do it.

10. And the biggest home buying mistake…drum roll, please…

not buying at all!

- From David Weekley

Should I Buy a New Home or an Old One?

Advantages of Buying a New Home versus Older One

Posted in: Home Builders, Homes for SaleTags: Easy Maintenance, green features, new homes, New vs Old, Older Homes, Safety of Newer Homes

No matter what the current economic situation is, buying a new home will always have distinct advantages over purchasing an older home. From being able to customize your floor plan and features to more updated technology and appliances, there are a number of reasons you should consider purchasing a newly built home over a pre-owned home for you and your family.

Everything is New
One of the most obvious advantages to purchasing a new home vs an older home is the fact that everything in your home will be brand new. When purchasing a pre-owned home, the carpet, fixtures, walls, appliances etc… have been used by at least one family before you. Any stains, chips or holes are yours to keep and will remain for the duration of your lease. Purchasing a new home ensures that everything will be clean and unused when you move-in.

Customization
When purchasing a new home, you are given the opportunity to customize certain aspects of your home; the level of customization varies from builder to builder. Cabinets, flooring, bonus rooms and energy efficient features are just some of the many amenities you get to pick out when building your home.

Green Features
Many new homes today are built with your comfort and the environment in mind. These homes often are constructed with green materials and are designed to include other environmentally friendly amenities as well, such as solar panels, tankless water heaters, better insulation and indoor air filtration systems. These features are both kind to the environment and to your wallet, as they save you money each month on utilities. Ussually any pre-owned home you purchase will not have these added benefit of green features.

Safety
Some older homes were built with hazardous materials, such as asbestos and lead-based paint. For families moving into an older home, these dangerous and outdated building methods can seriously threaten the health and safety of you and your family. In addition, overtime, mold may have developed in a home and can greatly affect the health of you and your family. In choosing to buy a new home, you will be moving into a house that is not only free of these hazards, but it is also up to date on all plumbing and wiring regulations, ensuring a safer environment for your family.

Easy Maintenance
Newer homes are built using durable and lasting materials, which translate into to less upkeep and maintenance. In an older home, you may have to deal with worn out appliances, run-down materials, wiring and plumbing that may be in constant need of repair, or any number of other issues. As a new home owner, you’ll run into fewer issues and if you do, you can call your home builder’s customer service team for quick resolution. In most cases, you are protected by a builder warranty and manufacturer warranties on materials and products.

re-posted with Permission

What Borrowers Should Know about FHA Loans

What Borrowers Should Know about FHA Loans

1. FHA loans are not only for lower-income borrowers. FHA loans are available to everyone. There is no maximum income restriction associated with FHA loans, but borrowers do need to substantiate income and assets by submitting proper documentation. This requirement ensures that borrowers are well-vetted and truly able to afford their future homes.

2. FHA loans are not only for first-time buyers. Many people believe FHA loans are available only to first-time home buyers, but this is not the case. Whether borrowers are making their first home purchase or their fifth, they can look to FHA loans as a home financing option.

3. FHA loans are not just small loans; in fact, loan amounts can be as high as almost $800,000. The government recently raised the maximum loan amount from its original cap of $362,790 to $793,750 as a way to help stabilize the housing market. The amount a buyer can borrow varies from county to county, though. Later this summer, condo buyers interested in FHA loans can visit www.checkfhaapproval.com to instantly identify FHA-approved condo associations and review maximum loan amounts for a given location.

4. FHA loans are not affiliated with the Section 8 housing program. While both programs are administered by the U.S. Department of Housing and Urban Development (HUD), FHA loans have nothing to do with low-income subsidized housing. FHA loans are simply mortgages insured by FHA. This insurance provided by the federal government allows lenders to lend more freely by assuring them that they will be repaid in the event of default. Most traditional lenders, including Wells Fargo & Co., JP Morgan Chase and Citigroup are able to provide FHA loans to their customers.

5. FHA loans are often more affordable than conventional loans. While FHA loans typically offer the same interest rates as other loans, borrowers benefit from a much lower down payment of as low as 3.5%.

6. FHA-approved condo developments are more desirable to buyers. With 87% of home buyers indicating that they plan to use FHA loans, condo associations that are not FHA approved are missing out on a significant pool of prospective buyers. Under rules in place since February 2010, an entire condominium development must now apply to HUD and be granted FHA approval before a buyer can purchase a unit in an association with an FHA loan or before an existing unit owner can refinance into an FHA loan.

Due to the general challenges with today’s lenders extending credit with respect to conventional loans, many borrowers may find that FHA is their best bet. Lenders don’t mind lending when the federal government (FHA) assures them of repayment.

Homeowners associations (HOAs) should note that although FHA-insured mortgages might be easier to obtain, they are not “risky” loans, due in large part to the strict “full documentation” requirements placed on borrowers. Individual buyers or sellers can initiate the approval process or current owners can encourage their HOA to apply.

7. FHA loans are assumable. In addition to lower down-payment and credit-qualifying requirements as compared to conventional loans, FHA loans are assumable. This means that when a seller with an FHA loan sells his or her property, the loan and its financing terms (interest rate) can be transferred to the new buyer. This unique feature will certainly make a property more valuable in times of rising interest rates.

Both Edinburgh and Edinburgh both fully qualify under FHA guidelines. Call Eric Kistner with Keller Williams/The Edinburgh Group to learn about all of your financing options. 423-218-2008 edinburghhomes@gmail.com

Tips for Hiring Remodeling Contractor

Given the economic difficulties that still exist, it’s not surprising that many homeowners are looking to home improvement and renovation, rather than buying a new home.

When deciding to undertake a remodeling project, however, there are several invaluable tips to keep in mind as you discuss your home makeover with potential contractors.

Thanks to our network of leading real estate professionals, the Top 5 in Real Estate Network®, I, along with my team, can offer tips to make your home renovation a more streamlined, more palatable experience, courtesy of Stageoflife.com:

Tip #1: Does Your Contractor Have Proof of Insurance?
Ask the contractor to have his insurance company mail or fax a copy of his current contractor insurance card to you. If the contractor can’t do this, stay away. Why? If there is an accident at your home, you are then liable. This also applies to any sub-contractor or employee that the contractor may use; those individuals should have active insurance cards faxed or mailed to you as well.

Tip #2: Did You Check References and See Photos?
Ask for at least three references — with two of them being for the same type of project you are planning — and then call the references. Additionally, ask the contractor to provide photos of previous work, especially for the same type of project. If he produces lawn and garden photos and you’re planning a bathroom remodel, you may want to check out another contractor.

Tip #3: Does Your Contractor Take Debit or Credit Cards?
Besides your ability to earn a few points, bonus miles or cash back on your project, a good sign that a contractor is financially savvy and has a bank behind his business is his ability to take debit and credit cards. This doesn’t just apply to big contracting companies. Many small, one-man shops will take cards if they have a good relationship with their business bank or credit union.

Tip #4: Manners and Appearance?
If the contractor drove his vehicle to your home to give you an estimate, take a look at the way he keeps the equipment and vehicle. Are things clean? Neatly arranged? If not, that’s a big warning. The way a contractor treats his tools is a direct connection to how he’ll treat your home. During the initial meeting, does the contractor present himself in a professional way? Do you feel comfortable around him or his employees? They will be working in your home after all.

Tip #5: Clean-Up Policy?
Ask about the clean-up policy. For example, if your home improvement is a multi-day project, will the contractor be cleaning up at the end of every day or will he leave the dust, wood chips, and other mess laying there for day two? The more mess in your home … the more it gets tracked around. Many homeowners find themselves with mouths gaping wide after the contractor has left for the day and their floors and home are dirty and messy around the project area.

Tip #6: Will the Contractor Put It In Writing?
Is your contractor willing to put both his bid and the scope of work in writing? If not, walk away immediately. You’ll be surprised how many homeowners have been duped by contractors who verbally tell you what’s included in their scope of work, but will then, in the middle of everything, require extra money to finish the remodel, thus holding you hostage with an uncompleted home project.

Tip #7: Availability?
Can the contractor get the job done in your timeline rather than his? There’s nothing more frustrating than if a contractor tells you that a job will be done by a certain date and then it isn’t. On the flip side, if you can’t find a good contractor that’s willing to commit to your timeline, your expectations may be too high and you may need to adjust your timeline.

Tip #8: Does Your Contractor Use “Subs?”
Does your contractor plan on doing everything himself? Or will he “sub out” work to the “trades?” For example, if you are remodeling a bathroom, you may need a plumber, electrician and carpenter. It’s okay if the contractor subs work out to these specific trades — it shows he wants the work done right.

Tip #9: Quoting & Billing Procedure?
Ask the contractor about his quoting procedure. Will it contain general information, or will it be specific? For example, most contractors will charge you for a fuel surcharge, material up-charges, waste removal, labor, etc. Some will show you these exact costs in a line item invoice, but others roll it up into one big bill. How much detail do you want? You should clarify that with your contractor upfront.

Also, what is the payment or billing policy? Is money required upfront? If so, go back to #1 and #2 above to make sure you have the contractor’s references checked and have a copy of his contractor’s insurance.

Tip #10: Did Your Contractor Get the Permits?
Ask your contractor to take care of the permits. Although permits cost you money, the inspection process is meant to protect you from poor workmanship and to make sure that everything is being built to code.

The Edinburgh Group has a list of Preferred Remodeler Partners list for all of our current and future homeowners. Please call Eric at 423-218-2008 or email EdinburghHomes@gmail.com