Don't Let Your Pipes Freeze-Tips to Avoid Home Water Damage

       Most homeowners don't consider the damage from frozen and broken water pipes as catastrophic as a natural disaster, but the damages caused from water pipe failures are one of the most common and least recognized catastrophe losses homeowners suffer every year. Second only to hurricanes, frozen and broken water pipes cause more losses in terms of the number of homes damaged and the total amount of claims paid by insurance companies in the U.S. Repair costs of $50,000 are very common for homes that suffer damage from frozen and broken water pipes. These damages can be a homeowners worst nightmare. When a pipe bursts the water flows, gushes from the pipe, and can turn a basement into a river within minutes. Water damage from frozen and broken pipes causes the most extreme damage when homeowners are away from their house, at work or on vacation because the plumbing can rupture and water can run unnoticed for hours and often several days.

Damages caused by frozen, ruptured water pipes include:

• Soaked and ruined drywall.
• Wallpaper, and paint peal away and can turn moldy.
• Kitchen cabinets warp and may even pull away from a wet wall.
• Carpets and draperies ruined and may need complete replacement depending on how long they remain saturated.
• Lost family pictures and photo albums in most cases they can not be saved if wet.
• Important records and paperwork that in many cases cannot be replaced.
• Damage to antiques, furniture and clothing.

       It isn't uncommon for a home to need a complete reconstruction due to development of mold and mildew. Spores of mold, including the deadly Stachybotrys Mold can start reproducing within hours of a home becoming saturated by the water. Every year families return from vacations to find their homes not only water damaged but mold covering every inch of their home from floor to ceiling. We can't prevent the leading cause of water damage loss--hurricanes--but homeowners can take measures to prevent frozen and broken water pipes. Every homeowner with an insurance policy agrees as part of the terms of the policy to take steps to avoid the nightmares of water damage and help reduce the insurance claims and total losses that result. Insurance policyholders share the financial burden of frozen and broken water pipes with increased insurance rates. Prevention is the first line of action for risk management of broken water pipes.

       Homeowners can take a few precautions before the next freeze that may save your home from the devastating effects of frozen and broken water pipes.

Before it gets too cold be sure to:

• Disconnect all garden hoses and other outside water connections. Whenever possible, use an indoor valve to shut off and drain water from pipes leading to outside faucets. This reduces the chance of freezing in the short span of pipe just inside the house. Homeowners might also consider using the Foam insulation covers for outdoor faucets.
• Insulate any exposed pipes, check for water lines located in the basement, under the house, near or on exterior walls and water lines in attics. Be sure to protect pipes with northern exposures, and wrap UL-approved heat tape. The improper usage of heat tape or pipe insulation can cause a fire so be sure to follow the manufacturer's instructions.
• Seal any leaks in your home that might allow cold air inside where pipes are located, especially in the kitchen, and bathrooms.
• Keep thermostats set to at least 55 degrees when the house is vacant or while you are on vacation during the winter. It might be a good idea to have someone check on the home while you are away and make sure it's staying warm enough to prevent pipe freezing.
• If you plan to be away for a long period of time drain and shut off the water system completely, except indoor fire sprinkler systems there may be.

The most important thing to know is how to shut off the water supply if a pipe bursts. And be sure everyone in the family knows how to turn off the water in the event of a burst pipe because quick action will minimize damage.

Click Here for the Source of the Information.

NAHB Analysis Debunks Misleading Stereotype of the Large Suburban Home

A new research study from NAHB Economics finds there is considerably more to the story of the stereotypical large home in the suburbs than what appears in the misleading and misguided criticism often leveled against it.

The authors of the study, “The Geography of Home Size and Occupancy,” concede that there is an element of truth in the observation that owner-occupied homes are smaller in downtown areas and inner suburbs and larger in the outer suburbs.

But this characterization “overlooks how many people actually reside in these homes,” write NAHB economists Robert Dietz and Natalia Siniavskaia.

“That is, it is incorrect to claim that those larger homes mean more ‘housing space’ for people who live outside central cities,” they say, because those homes in outlying areas tend to be occupied by larger households.

Data from the biennial American Housing Survey for 2009 show that roughly three-fourths of the nation’s 76 million owner-occupied homes are located inside metropolitan areas.

Of the homes in metro areas, those in central cities account for a 22% share of the nation’s owned homes, or 17.2 million; those in urban or “inner” suburbs have a 36% share, or 27 mllion; and the homes in further out, less dense suburbs are 17% of the owned housing stock, or 13 million.

The remaining one-quarter of owner-occupied homes — or 18.9 million — are located outside metro areas.

Survey results also confirm, in part, the stereotype that owner-occupied homes grow in size as they push out from the central city to the suburbs and rural parts of metro areas.

Nationwide, the median square footage of an owner-occupied home is 1,800 square feet.

Homes in the central city are about 7% smaller on average, at 1,678 square feet.

The median size climbs to 1,800 square feet in urban suburbs and 1,900 square feet in the rural reaches of metro areas.

However, not only do homes grow in size when one moves away from the central city to suburbs, the NAHB economists say, “but households grow in size as well.”

The average number of people per home increases from 2.6 in central cities to 2.7 in urban and rural metro areas, the report finds.

“Furthermore, metropolitan families choosing larger houses outside of central cities are more likely to have school-age children,” the study says.

Families in the urban or rural suburbs of metro areas are likely to have more children than households in other areas.

Of the 26 million households nationwide with children under the age of 18, more than half reside in metropolitan suburbs — 39% in inner suburbs and 18% in rural suburbs. Only 22% of home owners with children live in the central cities.

Looking at the locations of homes as they are related to household size “challenges the stereotyped view of large homes in the suburbs," the study concludes.

Nationally, the median square footage per person in owner-occupied homes is 800 square feet, which is exactly the same size as for the urban and rural suburbs in metropolitan areas and areas outside metro areas.

Median square footage per person is somewhat smaller for central cities, but only by 4%.

Among other findings presented in the study:

• A household with two persons is the most common household, accounting for 36%, or 27.6 million, of home owners. But its share of home owners is only 34% in central cities and urban suburbs.

• The combination of larger household types — of three, four or more persons — adds up to a 42% share of home owners, or 32 million.

     In metro areas, these larger households are much more commonly found outside of central cities.

     For example, four-person households account for almost 18% and 17% of home owners in urban and rural suburbs of metro areas, respectively, while their share in central cities is only 14%.

• Single-person households are more densely concentrated in central cities. They account for 22% of all home owners in the U.S., but their share in central city locations is close to 26%.

     In rural parts of metro areas, single-persons are less than 18% of home owners.

• In the Northeast, homes tend to be smaller and homes in the South tend to be larger than the national median.

     In the Northeast, homes in central city areas have a median of 667 square feet per person, 15% below the national median of 767 square feet. Central city homes in the South have a median of 850 square feet per person, which is 27% higher than the national median.

     These regional differences are partly explained by the age of the housing stock. The median age of an owner-occupied home in the Northeast is 51 years, compared to 31 years in the South. Newer homes are larger on average.

Click Here for the Source of the Information.

Building vs. Buying a New Home

       Building versus buying is a major dilemma in the new home market. The freedom to make decisions about the details of your home and watch it take shape holds undeniable appeal.  But there's also something to be said for the security of comparison shopping, walking through a house and "kicking the tires" before you sign on the dotted line.

       When it comes to buying a new home versus building a new home, is one option really better than the other?  Not necessarily.  It all comes down to preference.  Only you can decide which option will work better for you.  To help you decide whether you should build or buy your new home, use this handy guide outlining the pros and cons of both choices.

Building a New Home

When you build a new home, you'll work with a builder to create a custom home that has all the features you want.  Depending on your budget, you can customize every aspect of your new home down to a T or you can choose from a range of already-existing floor plans and features.  The home building process can take as little as a few months or many as a few years.

Home Building Pros:

• Control: Building a home lets you have control over all the features and options that will affect you on a daily basis.
• Knowledge: As you monitor the construction process, you'll learn useful things about home construction and gain a sense of ownership that can only come from watching your house take shape step by step.
• Expert Advice:  You'll have the expertise of the builder, contractors, and an architect to guide you.  Have peace of mind knowing that the pros are thinking about code, permits, and energy efficiency -- not you.
• The Eco-Friendly Edge:  You have the option of using environmentally sound materials and energy-saving features that will both make your conscience feel good and keep more cash in your wallet over the years.

Home Building Cons:

• Cost Overruns:  You could have to pay extra for unexpected expenses.  Unexpected costs can occur in any home construction project.
• Time: Waiting for construction to finish can be disheartening, not to mention that having to come up with alternate living arrangements while you wait can be costly.
• Stress:  Every time a decision has to be made or a problem arises, you'll hear about it.  Dealing with those considerations on a daily basis throughout the home building process can take their toll unless you've got a positive mental attitude.

Buying a New Home

Buying a new home involves scouring real estate listings with an agent to find a home that suits your needs.  The process can take a few days or a few months, depending on how fast you want to move.

Home Buying Pros:

• Shopping Around:  You get to be a critical shopper, comparing different features until you find exactly the right combination at the right price.
• Bargaining:  You can drive a tough bargain and get the best deal possible, knowing that, in a competitive market, there are other options waiting for you right up the road.
• Taking Your Time: When buying a new home, you get to work at your own pace.  You can take your time house hunting.  And when it comes to moving in, you work with the seller to choose a date that's soon or a few months away.

Home Buying Cons:

• Concessions: When buying a home, may have to make concessions in regards to features you want.  You may not find the "perfect" house since you didn't design it yourself.  And you may need to spend money making updates or repairs.
• Stress:  Finding and making an offer on a new home can be stressful, especially if you are in a seller's market.  You may need to act fast or make an offer that's more than the listing price if you get stuck in a bidding war.

       In the end, buying a new home and building a new home both involve some headaches.  But if you've done your research and planned carefully, the end result is sure to be rewarding no matter which option you choose.

Fortunately, when you choose Conbeth Construction & Development you have the option to either build a new home or buy a new home from us.  We have existing new homes for sale, and we also build fully custom homes in and around the North Shore of New Orleans in St. Tammany Parish.  Contact Us Today to get started on buying or building your new home!

Click Here for the Source of the Information.

Why Buy New Instead of a Foreclosure?

 Be careful that the great “deal” you find in the foreclosure market doesn’t end up being a “money pit”.  Below are some things to consider before making your decision. It will be worth your while to do the research.

Warranty.  New homes come with a warranty. The purchase of a home by Conbeth Construction & Development includes a comprehensive 2/10 Warranty.  Foreclosures are sold AS IS, so make sure you have a thorough inspection and know what you are buying. At Conbeth Construction & Development we build a custom home with warranty!  Your new home will have nothing to fix or upgrade!  Our features include granite countertops, coffered ceilings, hardwood floors and many other upgrades.  All of this at about the same price you would pay for a foreclosure AND you don’t have to deal with the bank looking for the deed!

Maintenance. The homes by Conbeth Construction & Development are built to last, and inspected at various points throughout the warranty. On a foreclosed home, if the previous owners could not keep up with their mortgage payment, it is likely that they skipped even simple maintenance, which can be costly in the long run. Make sure to check all systems: heating and cooling, plumbing, etc. before you purchase.  When you buy a home by Conbeth Construction & Development there is a 2/10 Warranty!

Cleanliness. A home by Conbeth Construction & Development is brand new and spotless upon move-in. On a foreclosure, it is likely that the previous owners moved out without a thought to how the home looked or smelled.  There could be missing items that the bank did not replace such as appliances, toilets and copper piping!

Homeowners Association Fees. Many homes by Conbeth Construction & Development are in master-planned communities. Homeowners Association dues, if any, can be affordable. That may not be true of a foreclosed home. If the foreclosure is located in a new home neighborhood, find out how the HOA is funded. If you are one of just several homes completed in a large subdivision and the amenities are in place, you and your neighbors may be responsible for the pool, insurance, electricity and common areas.

Your Precious Time!   Sales consultants with Conbeth Construction & Development will assist you at every point in the sales and financing process. You will know quickly whether your offer was accepted and be on your way to living in your new home. Finding and purchasing a foreclosure, on the other hand, is often a time-consuming and frustrating process. And you may have to go through the process several times to be the successful bidder.

These are just a few comparisons of buying a new home or a foreclosure. Which is the better value? You decide.


Click Here for the Source of the Information.

It's About Payment, Not Price!

       For those consumers who are waiting to buy a home, are you aware that you could be "priced out" of the market by rising mortgage rates and tighter underwriting, even if home prices fall? Do you still want to wait?

       Potential home buyers are focused on the wrong metric. They are overly focused on home price because of the tremendous correction that has occurred and the focus on home prices in the media. The media is also overly focused on price because they tend to live in the expensive markets like New York and Washington D.C. What consumers and the media are ignoring is the monthly payment, which is absolutely fantastic right now and highly unlikely to get much better. Everyone is just assuming that mortgages rates will stay low forever.

       Did you know that if prices fall another 10%, but mortgage rates rise 1 percentage point, fewer people will be able to qualify to buy a house? Add to the equation the discussion in D.C. about reducing the allowable Debt/Income ratios on mortgages, and even more people will be unlikely to qualify.

       If prices stayed flat and mortgage rates inched up 1 percentage point from 4.5% to 5.5%, the same house would cost you 12% more per month to buy. A movement from 4.5% to 6.5% would increase your mortgage payment by 25%. Needless to say, the impact of mortgage rates is tremendous.

Nobody knows where mortgage rates will be several years from now, but let me share with you a 40-year history of mortgage rates. Perhaps this will help you realize just how favorable mortgage rates are right now.

Click Here for the Source of the Information.

Statement from NAHB Chairman Bob Nielsen on Changes to the Home Affordable Refinance Program

October 24, 2011 - Bob Nielsen, chairman of the National Association of Home Builders (NAHB) and a home builder from Reno, Nev., issued the following statement regarding today's announcement by the Federal Housing Finance Agency (FHFA) to enact a series of changes to the Home Affordable Refinance Program (HARP):

"It is encouraging that the Obama Administration is beginning to turn its attention to restoring the nation's housing market, which is crucial for the health of our economy.

"Making more borrowers eligible for refinancing their mortgages by enhancing the Home Affordable Refinance Program (HARP) will give a badly needed boost to consumer confidence. Enabling additional home owners to take advantage of today's low mortgage interest rates in cases where their loans are greater than the value of their homes will give some households more money to spend on other things and enable others to at least pay their mortgages off at a faster rate.

"However, for the many families who have fallen behind in their payments because of the weak job market, the changes to HARP will have no benefit. HARP is only open to mortgage borrowers who have remained current with their payments. Clearly, additional policy initiatives are urgently needed to prevent foreclosures and deal with the inventory of foreclosed homes.

"In addition, it is essential to address overly restrictive mortgage lending standards, inappropriate credit limitations on home builders and a broken appraisal system that is contributing to housing price instability. All of these factors are detrimental to the full-scale housing recovery we need to rally consumers and get a disappointing economic recovery moving forward.

"We still have an enormous amount of work to do to repair housing. The HARP changes are a good step, but our leaders in Washington need to quickly focus on a broader range of actions for improving the housing marketplace. It has taken a painfully long time for them to recognize that housing is indispensable to the job creation and growth that have been sorely lacking since the end of the recession. The American people are losing patience and they expect far better economic prospects than those they are finding today, which stem in large part from neglecting housing."

HARP Changes Aimed at Preventing More Foreclosures

In an effort to help families with underwater mortgages lower their monthly payments and avoid further foreclosures, President Obama on Oct. 24 announced a series of changes to the Home Affordable Refinance Program, or HARP. In general, the changes would make more borrowers eligible for refinancing their mortgages and help boost consumer confidence while providing some households more money to spend on things besides their mortgage. In an official reaction statement issued the same day that the program changes were announced, NAHB Chairman Bob Nielsen said it is encouraging that the Obama Administration "is beginning to turn its attention to restoring the nation's housing market, which is crucial for the health of the economy."  However, he noted that, "for the many families who have fallen behind on their payments because of the weak job market, the changes to HARP will have no benefit" since the program is only open to mortgage borrowers who have remained current on their payments. Clearly, said Bob, additional policy initiatives are urgently needed to prevent foreclosures and deal with the inventory of  foreclosed homes. "We still have an enormous amount of work to do to repair housing," he noted. "The HARP changes are a good step, but our leaders in Washington need to quickly focus on a broader range of actions for improving the housing marketplace. The American people are losing patience and they expect far better economic prospects than those they are finding today."

Click Here for the Source of the Information.

4 Green Features Customers Want

Selling clients on the environmental benefits—rather than the added value—of green homes is akin to asking them to write a check for charity. That wake-up call was delivered in a Greenbuild education session by Kathy Spence, LEED AP and marketing and sustainability director for Charlotte, N.C.-based Banister Homes. In the session, Spence discussed how to show clients that a sustainable home can save them money and improve their lives.

The highest-priority green feature for most clients is energy efficiency, Spence said, followed by indoor air quality, water efficiency, and materials. She provided advice on marketing each of these green features.

ENERGY EFFICIENCY. For most customers, the most pivotal benefit of a green, efficient home is reduced cost of ownership. “People want to be insulated from future expenses,” Spence said. “No one knows what energy will cost. We provide information on what might happen [to energy costs] in the future.”

During an economic downturn, reducing operating costs is particularly important to customers, many of whom are buying or remodeling their homes to stay for the long term, rather than sell in a few years, Spence said. She pointed to an NAHB study that found buyers are willing to pay $6,000 more on average for a home that saves $1,000 per year in energy costs, indicating a desired payback of six years. “A reduction in operating costs adds value to a purchasing decision,” she said.

Renewable energy will come up in a conversation with clients, so be ready to discuss alternative energy sources intelligently, Spence suggested. In particular, builders and remodelers need to know about available tax incentives and how the local utility handles energy generation—will they allow you to interconnect solar panels with the grid? The Database of State Incentives for Renewables & Efficiency is a good place to start.

Be honest when explaining the potential costs and payback times for renewable energy, Spence recommended. “You need to be an expert on green features, but you’re not making the decision for them,” she said.

INDOOR AIR QUALITY. While energy efficiency is a popular benefit, indoor air quality is critical to many buyers, Spence said. To avoid disappointing clients, find out in advance what their expectations are. You don’t want to specify low-VOC paints only to find out after painting that they were expecting zero-VOC finishes.

MATERIALS. Green materials can mean different things to different clients, so don’t assume you know what your clients want, Spence recommended. “Some customers may want construction waste to fit into the trunk of a Prius,” she said. “Some may want everything to come from within a 100-mile radius. Some want everything to be reused. Some want low-VOC.”

While fulfilling those wishes can sometimes be costly or difficult, you may be able to find mainstream products that are friendly to those goals but less expensive and easier to acquire, Spence said. She suggests explaining to your suppliers the qualities you’re looking for in green products. On one project, for instance, Banister chose lumber from Weyerhaeuser because it was sourced from a local Carolina forest, even though it carried SFI certification instead of the more stringent FSC certification.

DOCUMENTATION AND VERIFICATION. Certifying and documenting your green home adds credibility, Spence noted, and helps take away the liability that comes along with green claims. It can also help at appraisal time: “Appraisers need documents, not verbal assurances,” Spence said, adding that utility bills also provide a powerful way to tell a home’s energy efficiency story.

With all of these factors playing a role in the purchasing decision, don’t assume you know what motivates a client, Spence said. Remember that many clients are at least two people, and each is likely to have different motivations. The wife may want efficiency, while the husband simply wants a high-quality home.

“Green” can mean saving the planet, the latest fad, lower utility bills, comfort, or health, she said. The fact that the home is better for the environment is just one of many possible selling points.

Click Here for the Source of the Information.

10 Things to Turn Off Before Going on Vacation

Planning a vacation, time to get away from the hustle and bustle of life is fun and exciting, and if you remember to turn off these 10 things before you go on vacation, you will worry less about what’s going “on” at home and really enjoy your vacation!

1.  Lights: It might seem obvious to turn off the lights while you are away, but some people completely forget. You will save a bundle in electricity costs. Do consider, however, one or maybe two lights on a timer switch in a front room or bedroom, so it looks as if the lights are going on and off throughout the evening. Homes are less likely to be broken into if someone is home.

2.  Your coffee pot: don’t just turn off your coffee pot, and other small appliances, but unplug them completely. Many small appliances continue drawing electricity even when not in use. By unplugging them, you will be saving electricity as well as preventing a possible fire.

3.  Computer: Generally speaking, it is not good to have a computer sit idle, but when you are away from home, you must take extra care to protect your computer and files it contains. Unplug it from both the electrical service and disconnect it from the internet. Be sure to back up all your files before you leave either using an online service or external hard drive that is stored away from your computer.

4.  Wall Warts: Those little transformer boxes that charge electronic devices, cell phones, lap-top computers, etc; take a walk around your house and see how many chargers are plugged into electrical outlets with the other end open and waiting for some device to get charged up. Unplug them all before you leave!

5.  Garage door opener: Unplugging the motor of your garage door opener will ensure that no one will find a compatible opener and get your door open. Leave an extra key to the walk-in garage door with a trusted neighbor, so you won’t have any problems getting in when you get home.

6.  Mail delivery: Contact your post office to have your mail held until you return to pick it up. Nothing says, “Nobody’s home” like an overflowing mailbox.

7.  Newspaper delivery: Similar to mail delivery; contact your Newspaper distribution department and have a hold put on delivery. You can ask if they will consider extending delivery for a few weeks to make up for the issues you put on hold, or perhaps you could substitute an online version of the paper during the weeks of your vacation, so you can keep up with the news while you are away.

8.  Water Service: When taking an extended winter vacation, people living in areas where temperatures fall below freezing, it is a good idea to drain pipes and turn off the water at the main shut-off valve before leaving. Freezing water can cause pipes to burst leaving an incredible mess and an incredible water bill!

9.  Gas service- When taking an extended summer vacation, it might be a good idea to contact your gas service and have the gas to your home turned off. Usually utility companies will do this free of charge, so you can vacation without worrying about any kind of gas leak at home.

10.  Your “work” attitude: This may be one of the most difficult things to turn off before you leave home, but turn it off, leave it at home; you’re going on vacation- relax and enjoy yourself!

If you turn off all the non-essential bits and pieces at home, you will have a fun-filled vacation and an uneventful homecoming, just as you planned.


Click Here for the Source of the Information.

Strategic Building Market Intelligence

It's About Payment, Not Price!

For those consumers who are waiting to buy a home, are you aware that you could be "priced out" of the market by rising mortgage rates and tighter underwriting, even if home prices fall? Do you still want to wait?

Potential home buyers are focused on the wrong metric. They are overly focused on home price because of the tremendous correction that has occurred and the focus on home prices in the media. The media is also overly focused on price because they tend to live in the expensive markets like New York and Washington D.C. What consumers and the media are ignoring is the monthly payment, which is absolutely fantastic right now and highly unlikely to get much better. Everyone is just assuming that mortgages rates will stay low forever.

Did you know that if prices fall another 10%, but mortgage rates rise 1 percentage point, fewer people will be able to qualify to buy a house? Add to the equation the discussion in D.C. about reducing the allowable Debt/Income ratios on mortgages, and even more people will be unlikely to qualify.

If prices stayed flat and mortgage rates inched up 1 percentage point from 4.5% to 5.5%, the same house would cost you 12% more per month to buy. A movement from 4.5% to 6.5% would increase your mortgage payment by 25%. Needless to say, the impact of mortgage rates is tremendous.

Nobody knows where mortgage rates will be several years from now, but let me share with you a 40 year history of mortgage rates. Perhaps this will help you realize just how favorable mortgage rates are right now.

Click Here for the Source of the Information.

GSE and FHA Loan Limit Changes for 2011: Scope of Impact

       On October 1, 2011, some mortgage loan limits for the government-sponsored enterprises Fannie Mae and Freddie Mac (GSEs) and the Federal Housing Administration (FHA) will drop from their current temporary levels to reduced limits based on permanent criteria established by Congress in 2008.[1]

       This paper presents estimates of the number of homes in the affected counties that become ineligible for GSE and FHA mortgages given reasonable estimates of their market value and assumed levels of buyer downpayments. Affected homes, if they were to be placed onto the for-sale market, would likely require financing with higher mortgage interest rates and other less favorable loan terms, such as higher required downpayments and more stringent credit history thresholds. This would reduce housing demand and place downward pressure on prices. As home sales are inter-related (for example, starter homes are sold to first-time homebuyers by move-up buyers), this pressure on prices could spill over on other homes in the affected areas.

       NAHB’s analysis found that the scheduled declines in GSE loan limits will affect 204 counties, containing 1.38 million owner-occupied homes in the affected price ranges. Adding this number to the homes that are currently outside the temporary mortgage loan limits produces an estimated total of 5 million homes that will not be eligible for GSE funding if they were put on the for-sale market.

       The effects for the scheduled declines in the FHA limits are more expansive. These declines will affect 620 counties, adding 3.87 million homes to those outside the temporary loan limits, for a total of 12.2 million homes ineligible for FHA-insured mortgages.

Government-Sponsored Enterprises

       With respect to Fannie Mae and Freddie Mac, the mortgage loan limit, which defines the size of “conforming” mortgages that can be purchased and securitized by the GSEs, is currently in general $417,000. However, in high-cost areas, where a statutory formula based on local median home prices produces a level above the base limit, this limit can be as a high as the national ceiling of $729,750.

       The present, temporary high-cost area limits for the GSEs were initially established by the Economic Stimulus Act of 2008 and have been extended annually since then. Unless Congress acts to again extend these levels, they will revert on October 1, 2011 to the lower permanent criteria for high-cost areas determined according to the Housing and Economic Recovery Act of 2008. The base limit will remain at $417,000, but the formula for establishing limits for high-cost areas will change from 125 to 115 percent of the area median home price and the national ceiling will drop from $729,750 to $625,500.

       Given the scheduled lower loan limits, there is an expectation of additional non-conforming loans being originated. The spread between mortgage rates allocable to conforming loans and non-conforming loans is a reflection of both the interest rate cost of the mortgage not being available for securitization by the GSEs and underlying financial risk conditions. Today the spread is approximately 60 basis points (0.6 percentage points), although it has been higher, particularly during late 2008 at the peak of the credit crunch. A FHFA report on the scheduled increases for the GSE loan limits suggests that rates for affected homebuyers would be 50 to 75 basis points higher.[2]

       It is worth noting that loans falling outside the conforming loan limits would also likely be subject to higher downpayment requirements and tighter credit score requirements, further decreasing demand for such homes and placing downward pressure on prices.

       According to the limits published by the Federal Housing Finance Agency (FHFA), 204 of 3143 counties in the United States (the 50 states and the District of Columbia), or 6.5% of the total, will see a decrease in the applicable high-cost conforming loan limit.[3] Many, but not all, of the affected areas are concentrated along the coasts and other high cost areas.

       However, examination of most recent (2009) data from the American Community Survey (ACS) shows that these counties also represent relatively dense concentrations of population and housing. In fact, the affected counties contain 20.7 million owner-occupied housing units of the 75.3 million nationwide or 27% of all owner-occupied housing in the U.S.

       For counties facing a decline, the average decline in the loan limit is $67,018 or 11% from current levels.

       To estimate the range of homes that will be directly affected by the change, we assume an average 10% downpayment. Using home value data from the ACS, we interpolate prices by county. With this approach, we estimate the following impacts concerning affected homes:

• Under present law, 3.63 million owner-occupied homes are priced above the conforming loan limits
• Under the changes set to take place on October 1, 2011, an additional 1.38 million owner-occupied homes will be put above the limit, bringing to 5 million the number of homes that will not be eligible for GSE funding.

Federal Housing Administration

       As with the GSEs, on October 1, 2011, the loan limits for the FHA will also decline due to changes set in law. FHA loan limits are set slightly differently than those for Fannie Mae and Freddie Mac. By law, the lowest limit for any county for one-unit homes is $271,050. The ceiling for FHA currently cannot exceed $729,750, but that ceiling is set to decline on October 1, 2011 to $625,500.

       For counties that lie between these limits, the mortgage loan limit is equal to the area median house price multiplied by 125% (currently) or 115% (as of October 1, 2011).

       According to the limits published by the Federal Housing Administration, 620 of 3143 counties in the United States (the 50 states and the District of Columbia), or 20% of the total, will see a decrease in the applicable FHA loan limit.[4] As with the GSE limits, many, but not all, of the affected areas are concentrated along the coasts and other high cost areas such as California. It is also worth noting that every county that will realize a decrease in its applicable GSE loan limits is also among the 620 counties that will face a decline in the FHA loan limit.

       We again use the American Community Survey (ACS) to demonstrate that these counties include significant concentrations of population and housing, more than the share of the counties affected (one in five) would suggest. In fact, the affected counties contain 44.3 million owner-occupied housing units of the 75.3 million nationwide or 59% of all owner-occupied housing in the U.S.

       For counties facing a decline, the average decline in the FHA loan limit is $58,060 or 14% from current levels.

       Similar to the GSE scenario, to estimate the range of homes that will be affected by the change, we assume an average 3.5% downpayment (the minimum required under present law by the FHA). Using home value data from the ACS, we interpolate prices by county. With this approach, we estimate the following impacts concerning affected homes:

• Under present law, 8.32 million owner-occupied homes are priced above the existing FHA loan limits
• Under the changes set to take place on October 1, 2011, an additional 3.87 million owner-occupied homes will be put above the limit, bringing the total number of homes that are not eligible for FHA-insured mortgages to 12.2 million.

A Final Note on VA Mortgage Loan Limits

       The loan limits for mortgages guaranteed by the Department of Veterans Affairs (VA) will not change again until January 1, 2012. Congress enacted temporary and permanent limit provisions for VA-guaranteed mortgages that generally track the limit provisions applicable to the GSEs but did so in legislation that was enacted separately from the bills governing the GSEs and FHA. The VA provisions included different effective dates. On January 1, 2012, VA high-cost county loan limits will experience declines similar to those that will occur on October 1, 2011 for the GSEs, although the new VA limits may be lower in some cases if VA continues to utilize more recent median home price data than FHFA and FHA.[5] The effective base VA limit will continue to match the GSE limit of $417,000.

[1] Limits for mortgages guaranteed by the Department of Veterans Affairs (VA) will not change until January 1, 2012, as explained in the note at the end of this paper.
[2] See the FHFA Mortgage Market Note 11-01, “Possible Declines in Conforming Loan Limits.” March 29, 2011, (http://www.fhfa.gov/webfiles/20671/MMNote_2011-01_LoanLimit.pdf). The report covers some of the analysis in this report, including an analysis of the share of loans that would be affected by the change.
[3] The FHFA reports 250 total counties (or county equivalent jurisdictions) are affected by the pending decrease in some county loan limits. Our analysis produces a smaller number of affected counties because it excludes U.S. territories and only analyzes the 50 states and the District of Columbia. Nonetheless, the effects for the U.S. territories will be significant. For example, as the FHFA notes, 41 of the 43 counties experiencing the largest high-cost area loan limit decreases are in Puerto Rico. We exclude those areas from our analysis to provide a consistent basis for calculating the average declines.
[4] Potential Changes to FHA Single-Family Loan Limits beginning October 1, 2011 from Implementation of the Housing and Economic Recovery Act of 2008. May 26, 2011. U.S. Department of Housing and Urban Development.
[5] The VA has adopted a policy of using the latest median home price data when calculating high-cost guarantee limits, which has resulted in year-to-year declines in some areas, while FHFA and FHA have followed a policy of not allowing declines in local median home prices to result in declines in the published high-cost area limits.

Click Here for the Source of the Information.

The Cook Report: The Home Front

       Last week’s confirmation that the gross domestic product grew only 1.8 percent in the first quarter came when economists were already busily revising their growth forecasts downward for the rest of this year. A double-dip recession remains unlikely, but this is the weakest recovery since the Great Depression and the first one not being led by housing. The nearly moribund housing sector is, in fact, weighing down the recovery.

       The conundrum is very real. On the one hand, the subprime-mortgage crisis and easy money—loans with minimal down payments and scant documentation—brought the U.S. economy to its knees just three years ago. Clearly, changes had to be made to prevent that from recurring. On the other hand, housing-industry leaders now fear that the pendulum is swinging too far the other way, potentially decimating an already battered sector and further stifling the anemic recovery. Although we hear the perennial debate over limiting the homeowners’ mortgage-interest deduction, which would hurt the middle and higher end of the housing market, other proposed regulations really terrify the industry. These rules include increased down-payment requirements and loan restrictions for all but those with near-bulletproof credit ratings.

       A bipartisan national poll of 2,000 likely voters to be released next week by the National Association of Home Builders makes clear the unique position that homeownership holds in Americans’ minds and the delicacy required in dealing with the issue.

       The May 3-9 telephone survey, conducted by Celinda Lake and Jonathan Voss of the Democratic polling firm Lake Research Partners and by Neil Newhouse and Robert Blizzard of the GOP outfit Public Opinion Strategies, found that 75 percent of voters believe “that owning a home is the best long-term investment they can make and is worth the risk of ups and downs in the housing market.”

       Interestingly, a high percentage of people in different financial situations felt this way, including 81 percent of those who own their homes outright, 76 percent with mortgages, 67 percent who are renters, and 65 percent with underwater mortgages. Respondents were also asked whether they would recommend buying a house to a close friend or family member just starting out. Eighty percent of all voters said yes, including 78 percent who had underwater mortgages. Seventy-three percent of the respondents who do not own a home said that their goal is to eventually buy one. Clearly, the decline in home values and economic turmoil have not diluted their dream of homeownership and the aspirational element that makes the notion a core value.

       Some have suggested that the government end tax incentives for homeowners, but the survey suggests a hostile voter reaction to that plan. Told that “since the federal income tax was introduced in 1913, the federal government has used the tax code to encourage home­ownership,” respondents were then asked: “In general, do you think it is appropriate and reasonable for the federal government to provide tax incentives to promote homeownership, or do you think it is not a good idea?” Seventy-three percent of all voters thought those incentives should be provided, including 71 percent of Republicans, 68 percent of independents, 79 percent of Democrats, and even 68 percent of those who support the tea party movement.

        When asked about requiring a 20 percent down payment to purchase a home, respondents split evenly, with 49 percent supporting such a threshold and 49 percent opposing it. But among those most likely to be affected, mortgage holders and renters ages 18 to 54, opposition was strong, with 58 percent of younger mortgage holders and 59 percent of younger renters opposed to adding that hurdle to buying a home.

       Given this kind of visceral connection to homeownership, it’s not surprising that 71 percent of respondents oppose eliminating the mortgage-interest deduction and 63 percent oppose lowering it. Moreover, 58 percent oppose eliminating the deduction for home-equity loans or limiting the deduction for those who earn more than $250,000 a year. Fifty-seven percent of voters said they would be less likely to support a candidate for Congress who wanted to eliminate the mortgage-interest deduction; only 26 percent said they would be more likely to support such a candidate.

       These numbers are pretty much across the board: Sixty-three percent of Republicans, 56 percent of independents, 55 percent of Democrats, 61 percent of tea party supporters, and 58 percent of those voters in congressional districts held by freshman Republicans would be less likely to support a candidate who favored killing the deduction. With the unusually large sample, the pollsters segmented respondents who live in congressional districts that The Cook Political Report rates in the swing category. Fifty-eight percent of that group were less likely to support such a candidate, with 56 percent of those voters in swing Senate states and 54 percent in states that The Washington Post’s Chris Cillizza rates as swing presidential states.

The clear message is that owning a home is among the values that Americans most cherish—an important part of the American Dream.

Click Here for the Source of the Information.

7 Mortgage Interest Deduction Myths

Think losing the mortgage interest deduction would be no big deal? We bust seven myths to show why the cost is bigger than you think.

Proposals floating on Capitol Hill to curb the mortgage interest deduction gloss over all the ways home owners, and even renters, would be hurt by the change. Let’s set the record straight.

Myth #1: The mortgage deduction is just for rich people.

The mortgage interest deduction helps mostly middle- and lower-income families. 65% of families who use it earn less than $100,000 per year. 91% earn less than $200,000 per year (that’s where most economists draw the line between rich and middle-class). Only 9% earn more than $200,000 per year.

This myth may have arisen because of a related fact: If you buy a house, you’re much more likely to accumulate wealth by the end of your life. Home owners have an average net worth of $200,000, while the average renter’s net worth is $5,000, according to the Federal Reserve’s Survey of Consumer Finances.

Myth #2: I'm not affected by the mortgage deduction because I don't own a home.
 
If the mortgage interest deduction goes away, home values would fall by 15%, the NATIONAL ASSOCIATION OF REALTORS® estimates. When home values fall, tax revenues follow suit, giving your local government two choices:

• Raise property taxes. Not only will home owners pay more in taxes, renters won’t escape unscathed either as landlords raise rents to cover their costs.
• Cut services that everyone—renters and owners—enjoys.

Myth #3: Switching to a 12% mortgage interest credit would be a wash for most.

One proposal floating around Congress is to replace the mortgage interest deduction with a 12% nonrefundable mortgage interest tax credit. (Deductions reduce your taxable income; credits reduce your tax liability.) This plan would increase taxes for many home owners.

Example: If you paid $10,000 in mortgage interest, and you’re in the 25% bracket, you’d pay $1,300 in extra taxes.

• The $10,000 deduction you have now saves you $2,500 on your taxes (25% x 10,000).
• The 12% credit would save you only $1,200 (12% x 10,000) on your taxes.

In this scenario, if the mortgage interest deduction is changed to a 12% credit, you’d lose $1,300 (the current $2,500 savings minus the $1,200 you’ll save under the 12% plan).

Myth #4: Not that many people take the mortgage interest deduction.

There are 75 million American home owners, and 38.5 million of them take the mortgage interest deduction. The average mortgage interest tax deduction is $12,200, and a typical benefit for home owners is $3,050 a year.

The mortgage deduction is a key benefit to first-time home owners and trade-up buyers because you pay the most mortgage interest when you first take out a mortgage. (You won’t pay equal amounts of principal and interest until year 13 or later, depending on your interest rate.)

People with large families also get a lot of bang from mortgage interest deductibility—they buy relatively big houses for their big families.

Myth #5: Getting rid of the deduction won't affect me or my housing market.

It will mean lower property values for all American home owners, including the one-third who own their homes outright and the 12 million who take the standard deduction.

Even if you don’t have a mortgage, getting rid of the MID will affect how much home you can afford to buy—and how much a buyer will pay for your home.

Myth #6: People will still buy my house without the mortgage interest deduction.

Yes, people will still value home ownership, but it will be harder for them to buy your house. The mortgage interest deduction makes it cheaper to buy a home because it saves real money at tax time.

If you bought a home last year with a $200,000, 30-year, 5% fixed-rate mortgage and you’re in a 25% tax bracket, you’d save about $2,500 from the mortgage interest deduction alone in the first year you own your home. That’s money you can use to pay down other debts, save for your children’s college education, or put away to buy a move-up house.

Myth #7: Solving the U.S. budget problems requires everyone to sacrifice.

Home owners already pay 80% to 90% of the federal income tax collected. If mortgage interest deductibility disappears, you and your fellow home owners could foot 95% of federal income tax.

If you’re at the beginning of your mortgage, losing the mortgage deduction will cost you a bundle:

• $26,685—a 15% drop in value for the median home valued at $177,900.
• A proportionally smaller gain in overall home equity over your lifetime, because your home now starts from a lower value.

Click Here for the Source of the Information.

Your Best Financial Chance at Buying A Home

       If you are thinking of buying a home in the near future or even several years from now, it is necessary that you qualify for a mortgage. Mortgage companies are becoming stricter on approval requirements so it is necessary that you take all the proper precautions to insure that you will qualify for a loan. Having a steady income and high credit score are important as well as not making any large purchases and not moving your money around.

       It is important not to make any large purchases before you buy your home. Creating any kind of debt could hurt your chances of getting approved. Major purchases such as cars, furniture, appliances, electronic equipment, jewelry, vacations, etc. are a big reason why so many potential home owners do not qualify for loans. Mortgage companies look at your debt to income ratio – the percentage of a consumer's monthly gross income that goes toward paying debts vs. the amount of money you make each month – to determine if you are eligible for a loan. Large purchases can lower the amount you are able to borrow from the bank because lenders don’t look at what you’ve you paid on these items…they look at what you owe.

       Another important tip is to not move money around. Jumping money from your savings or checking account and moving banks can be harmful to your loan approval status. When a lender reviews your package for approval one thing they must look at is your funds to determine your ability to make a down payment and pay your closing costs. When getting approved for a loan, you will most likely be asked to provide statements for the past few months of all of your assets such as checking accounts, saving accounts, money market funds, certificates of deposit, stock statements, mutual funds, and even your company 401K and retirement accounts. If you move money it may show large withdrawals as well as deposits that may be hard to track by the mortgage underwriter who is reviewing your file. They are required to have a complete paper trial of all withdrawals and deposits, and this process could get quite tedious if you move money around. In order to ensure it goes smoothly, try not to move too much money in and out of your accounts in order to make sure the lender can process your documents properly.

       Loan approval may be getting harder, but it is not impossible. Following the tips above and having good credit and high income can help to improve your chances for getting approved. If you are in need of finding a mortgage company in St. Tammany Parish  to see if you qualify, Contact Conbeth Construction & Development Directly at 985-898-2214 or via e-mail at info@conbeth.com.  We are here to help you with your mortgage needs as well as your new home purchase in Mandeville, Madisonville, Covington, Abita Springs, and the Greater New Orleans Area.   Call us today!

Common Real Estate Terms

A

Acceleration clause - States that the lender has a right to collect the balance of a loan if a payment is missed by the borrower.

Acceptance - When the buyer makes an offer that the seller accepts.

Addendum - An addition or change to the original contract. This is used to correct errors, state changes, or update information to an original contract.

Additional principal payment - Additional money paid in addition to the monthly payment, in order to reduce interest and shorten the term of the loan.

Add-on interest - Interest that is paid on the principal for the entire term of the loan.

Adjustable-rate mortgage (ARM) - Is a mortgage loan where the interest rate is adjusted periodically to reflect changes based on an index. This can benefit a borrower if interest rates fall but can hurt the borrower if interest rates rise.

Adjustment period - In an (ARM) adjustable rate mortgage it is the time period in between which adjustments are made to the interest.

Agreement of sale - The document that details the price and terms of the contract that the buyer gives to the seller and the seller approves.

Allowances - Money given to the buyer, offered by the builders for the buyer to make changes to the home.

Amenities - Additional services offered by a development such as swimming pools, fitness centers, tennis courts and other features that appeal to a buyer.

Annuity - Payments made that recur periodically over a certain period of time.

Appraisal - An opinion of the value of a property, usually the market value of the property.

Asking price - The initial price the seller wants to sell the property for.

B

Back-to-back escrow - Arrangements that an owner makes to oversee the sale of one property and the purchase of another at the same time.

Backup offer - A second bid made on a particular piece of property that the seller will accept if the first offer fails.

Balloon loan - A loan in which the monthly interest is low therefore not enough to repay the loan by the end of term causing one large payment upon maturity of the loan.

Balloon payment - The large final payment that is due at the end of a balloon mortgage.

Bankruptcy - The inability for a lender to pay back the debts owed, this agreement relieves the lender from payment, but remains on the credit record for years and can limit the ability to borrow.

Bargain sale - The sale of a piece of property for less than market value.

Bidding war - When more than one buyer makes an offer for one piece of property.

Bilateral contract - A mutual contract made when both parties involved promise to each fulfill something in the future.

Bill of sale - A document made by the seller to the buyer that states that on a particular day, at a particular time, and for a particular amount of money that the seller sold something to the buyer.

Book value - The cost of an asset minus the depreciation value.

Breach of contract - When someone fails to abide to their side of a particular agreement or contract without reasonable legal explanation.

Breach of warranty - When a seller promises something to the buyer and does not come through with the promise.

Bridge loan - A short-term loan pending the arrangement of a longer term loan.

Broker - The person that mediates between the buyer and the seller.

Brokerage - The business that acts as a broker.

C

Cancellation clause - A clause which states, under certain conditions when it is acceptable to break an agreement.

Cap - In an adjustable rate mortgage, it is the limit on the amount of interest or payment that can increase.

Capital - Cash or goods used to generate income.

Certificate of occupancy - A document that states that a building or home is in proper condition to be occupied.

Certificate of sale - A document issued which states that the buyer will receive a deed after the purchase of property.

Closing - The final step in the buying process where documents are signed and property is transferred.

Closing costs - Expenses incidental to the sale of real estate, including loan, title and appraisal fees.

Custom home - A home that is designed specifically how the person commissioning the home wants it to be.

D

Days on the market - The period of time a property is listed for sale until it is sold or taken off the market

Disclosure - The revealing of information about a home or piece of property in compliance with legal regulations.

Draw - A payment made to subcontractors or suppliers from a construction loan.

Dual agency - When the real estate agent or broker represents both the buyer and seller.

E

Early occupancy - When the buyers are allowed to occupy a property before the close of escrow.

Equal Credit Opportunity Act - A federal law that prohibits a lender or other creditor from refusing to grant credit based on the applicant's sex, marital status, race, religion, national origin or age. The law also prohibits a creditor from refusing to grant credit because the applicant receives public assistance.

Equity - A determination of the value of a property after existing liens are deducted.

Escrow - An account where a neutral third party holds the documents and money involved in a real estate transaction and ensures that all conditions of a sale are met.

Estate - The total assets of a person, including real property, at the time of death.

F

Fannie Mae - The official name of the Federal National Mortgage Association, it is a congressionally chartered, shareholder-owned company that buys mortgages from lenders and resells them as securities on the secondary mortgage market.

Fee simple - The absolute ownership of property, limited only by the four basic government powers of taxation, eminent domain, police power, and escheat.

FHA loans - A federal assistance mortgage loan insured by the Federal Housing Administration. FHA loans have historically allowed lower income Americans to borrow money for the purchase of a home that they would not otherwise be able to afford.

First mortgage - The primary mortgage on a property that has priority over all other voluntary liens.

Fixed-rate mortgage - A mortgage where the interest rate on the loan will remain the same through the duration of the loan.

Foreclosure - The bank or lender repossesses the property due to a loan that has been defaulted.

G

Good-faith estimate - An estimate of fees due at closing, also called settlement costs, include the fees such as inspections, insurance, and taxes.

Grace period - The amount of time that is allowed after the due date of a loan payment, before penalties are charged.

Graduated-Payment Mortgage (GPM) - A mortgage where the payment starts low and gradually increases over time (usually 5-15 years) until the increase stops and the borrower will then pay a set monthly payment.

Gross income - The total income generated before the deduction of taxes or other expenses.

Growing-equity mortgage - A fixed-rate mortgage where payments increase over time; the extra funds are applied directly to the principal of the mortgage.

H

Home equity conversion mortgage - A mortgage that allows older homeowners to convert some of the equity in there home into money. 

Home equity loan - A loan that allows owners to borrow against the equity in their homes.

Home inspection - The inspection of a home’s condition by an inspector before the purchase of a home.

Homeowners' association - A group that governs a modern subdivision or planned community. An association that collects monthly fees from all owners to pay for maintenance of common areas, handle legal and safety issues, and enforce the covenants, conditions and restrictions set by the developer.

I

Income property - Property used to generate income that is not occupied by the owner.

Installment contract - A contract where the buyer takes over the property but does not receive the deed or title until all of the payments have been made.

Insurance - Payments made over a period of time in exchange for a promise of compensation in case a potential or future loss occurs, usually caused by some type of natural disaster or accident.

Interest - The fee paid on borrowed assets. It is calculated based on a percentage of the total amount of the loan.

Interest accrual rate - The interest accumulated from the initial investment.

Interest rate - The sum, expressed as a percentage, charged for a loan. Interest payments on most home loans are tax-deductible. 

Interest rate buy-down plans - Plans for cash-short buyers, some sellers are willing to advance funds from the sale of the home to buy down the interest rate and reduce the buyer's monthly obligation.

Interest-only loan - A loan in which all the payments being made toward the loan are only going toward the interest of the loan, therefore not declining the overall balance of the loan.

Investment property - Property purchased that generates income, such as apartments or rental units.

L

Lender - The institution or company that gives loans.

Letter of intent - The document outlining an agreement between the two parties involved before the agreement is finalized.

Liabilities - Anything that puts the borrower at a disadvantage such as debts or other financial obligations.

Liability insurance - A policy that protects owners against any claims of negligence, personal injury or property damage.

Listing - A piece of property placed on the market by a listing agent, this gives a real estate agent permission to find a buyer for the property.

Listing inventories - The known number of houses for sale within a given market.

Loan application - The first step toward submitting a home loan, requires the borrower to itemize basic financial information.

Loan origination fee - Most lenders charge borrowers an origination fee (or points) for processing a loan. A point is 1% of the total loan

M

Margin - The collateral that the holder has to deposit to cover credit risk that may incur.  The lender's "retail markup" on the mortgage. For example, if the index rate for an adjustable-rate mortgage is 5 percent but the lender has a 2.5 percentage-point margin, the rate the borrower will pay is 7.5 percent.

Market value - The current quoted price for a piece of property at a particular point in time.

Money market account - Accounts that work like money market funds and allow individual investors to participate in certain managed investments and withdraw funds under most conditions.

Mortgage - A legal document that states specific payments and interests rates usually used for the purchase of a home.

Mortgage acceleration clause - In the event of default on a loan, or the title of the property is changed, it is the clause that states that the lender is immediately entitled to the full outstanding balance of the loan.

Mortgage insurance - Insurance that is paid to the lender that may be required in the purchase of a loan, in order to protect the lender in case of default.

Mortgage life insurance - A special type of insurance that will pay off a mortgage if the borrower dies before the debt is paid.

Multiple Listing Service (MLS) - This service combines the listings for all available homes in an area (except For-Sale-By-Owner (FSBO) properties) in one directory or database.

N

Non-recurring closing costs - One time fees that are incurred during the closing process, these fees are only charged once and include such things as loan points, credit reports, and appraisal.

O

Open house - An event where listing agents open a home for sale to the public for view.

Option - A situation in which a buyer puts down money for the right to purchase a piece of real estate within a set time period but does not have an obligation to buy.

Origination fee - The fee paid to the lender when a new loan is started for the processing of the loan.

Owner financing - When the owner of the property agrees to finance part or all of the purchase to the buyer.

P

PITI (Principal, Interest, Taxes, Insurance) - The four components of a mortgage payment. These components together represent the borrower’s actual monthly mortgage-related expenses.

Power of attorney - A document that gives someone permission to act on behalf of someone else in a legal or business matter.

Pre-approval letter - A letter from a lender that informs a seller about the amount of money that a potential buyer can obtain.

Pre-paid interest - Interest you pay at closing to cover the time between the closing period and when the first payment is due.

Pre-qualification - The first stage of a mortgage application where lenders will run a basic credit report to determine the debt to income ratio, in order to determine loan amount for which the buyer qualifies.

Private Mortgage Insurance (PMI) - A special type of loan insurance that many lenders require borrowers to purchase if the borrower's down payment is less than 20 percent of the home's purchase price.

Property tax - A tax that the owner pays on the property being taxed, property taxes are calculated at about 1.5% of the current market value.

R

Rate lock - A commitment by a lender guaranteeing a specified interest rate or a specific time period.

Real estate agent - Either a buyer or seller with a state license who is qualified to represent either the buyer or seller in a real estate transaction and gets a certain commission once the property is either bought or sold.

Real estate broker - A real estate broker is a party who acts as an intermediary between sellers and buyers of real estate and attempts to find sellers who wish to sell and buyers who wish to buy.

Real Estate Investment Trusts (REITs) - A tax designation for a corporation investing in real estate that reduces or eliminates corporate income taxes. These trusts are publicly traded companies that own, develop and operate commercial properties.

Rent loss insurance - A policy that covers any loss of rent or rental value in the event of fire or other damage that renders the property uninhabitable.

Renter's insurance - A policy that covers the replacement value of possessions.

Resale value - The future selling value of a piece of property that would be negotiated by the seller with the buyer for the home or property; this value can be affected by many factors: that include the surrounding neighborhood, school scores, and economic and housing market conditions.

Return On Investment (ROI) - The ratio of money that is gained or loss on an investment.

Reverse mortgage - A mortgage which provides seniors with funds from the equity of their homes; no payments are made until the borrower sells the property or moves to a retirement community.

S

Seller's market - A hot real estate market in which sellers have the advantage and multiple offers are common.

Speculation home (Spec Home) - A home that is constructed without a buyer with the assumption that a buyer will be found.

Square footage - The number of square feet of livable space in a home or building.

Standard payment calculation - The equal monthly payments that are required in order to repay the balance of a loan over the remaining term of the mortgage.

Starter home - The first home purchased by a buyer that usually falls into a lower than average market price range.

Subdivision - The division of a larger development’s land into smaller pieces in order to have a better chance at resale.

T

Tax deduction - An expense incurred by a taxpayer that is subtracted from gross income, a tax break given by the government. Mortgage interest, loan points and property taxes can be deducted.

The 72-hour clause - The situation in which a contingency buyer (a buyer who has a house to sell) writes a contract. Before they can purchase another home, most sellers insist on a 72-hour clause. In the event of a better offer coming in before the contingency is settled, this clause entitles the seller to give the buyer 72 hours to remove the contingency or lose the house.

Title - A legal document that shows evidence of ownership.

Title company - A company that specializes in ensuring titles to real estate.

Title insurance - An insurance policy that  protects the lender from any dispute over the ownership of property.

Townhouse - A row of houses usually connected by at least one common wall, usually two stories.

Truth-in-Lending Act - A Federal law that protects consumers by ensuring that lenders provide certain information including annual percentage rate, fees or credit insurance, minimum payment and other such fees.

Two-step mortgage - An adjustable mortgage with two interest rates, one for the first five or seven years of the loan, and the other for the remainder of the loan term.

U

U.S. Department of Housing and Urban Development (HUD) - A federal agency that oversees the Federal Housing Administration and a variety of housing and community development programs including urban renewal and public housing.

Unrecorded deed - A deed which transfers ownership of property from one party to another without being officially recorded.

Unsecured loan - Any loan that is given based only on the borrower’s promise to pay and is not backed by collateral.

V

VA loans - A loan that is backed by the Veteran’s Administrations that allows most veterans to purchase a house with little or no down payment.

Variable interest rate - A rate that moves up or down based on current rates in market place.

Variable rate - An interest rate that changes with fluctuations in such indexes as the U.S. Treasury bill index.

Variable rate mortgage - A loan with an interest rate that hinges on factors such as the rate paid on bank certificates and Treasury bills.

W

Walk-through - A buyer's final inspection of the home to determine if conditions in the purchase agreement have been satisfied or if there are additional issues that need to be addressed before closing.

Warranty - A legally binding promise that the final product is without defect or will meet specific levels of performance over the period of time that the warranty is good for.

Wrap-around mortgage - A loan to a buyer for the remaining balance on a seller's first mortgage, and an additional amount requested by the seller.  Payments on both loans are made to the lender who holds the wrap-around loan.

Z

Zero-lot lines - When a building or house is built near or on the lot line giving the property either little or no yard.

Zoning variance - A one-time modification of an existing zoning law.

Why Buy a NEW Home?

       Even in our current economy today, there are many reasons why you, as a home buyer, would want to buy a new home instead of a used (previously-owned) home.  If the reasons were to be listed, there would be too many to write about, so we at Conbeth Construction and Development are just covering a few of the most basic but important points.  Whether you are interested in building a home from a floorplan that you have been dreaming of for awhile on your own lot, or you are interested in purchasing a new home in the St. Tammany Parish area, think about buying a new home for the following reasons.

Appreciation
       Residential real estate experiences a life on its own, similar to the growth of an individual, many experts agree. The first five to seven years are usually its "formative" years, where the most appreciation can occur. It is during this time that a new home can have the most appeal, and appreciate with its surrounding area and economy. The second stage may be referred to as the "maturing" period. This can extend into year 15 or so, and may find the now "not so new" home stabilizing in terms of appreciation. This is when depreciation can add to the equation. The home's features and trappings can begin to look "dated" and some items may need to be replaced, such as A/C, roofing, flooring, carpeting, etc. Keeping up with these items as the years go by may help buyers hang on to a good chunk of the original appreciation from its first few years. However, a few buyers willing to invest in updating their homes in a given neighborhood may not be enough to convince an appraiser that the entire neighborhood is as concerned with keeping the values up.

       Years 15-30 are sometimes referred to as the period of "built-in obsolescence."  By this amount of time home builders have so significantly changed features, energy efficiency, and floor plans to suit the buying public's emerging lifestyles that a major re-model of an aging home may need to take place, should the occupants be interested in getting top dollar for their home. Appreciation becomes an issue primarily when selling or refinancing your home. Neither of these issues are usually of significant importance to those wishing to stay put through retirement, have a tolerable interest rate for their home loan, or own their homes outright. Without knowing the future, it is difficult to tell when homeowners may need to sell, accept employment relocation opportunities, or decide to downscale as their families grow up and move out. This is why homeowners tend to remain concerned with their investments in terms of appreciation and future value.

Better Product
       Up to date technology in new construction, more and more timely inspections required by city and county entities, and features that reflect buyers' changing needs and desires are showcased in new home construction. Builders want protection from defect litigation by enlisting suppliers who help eliminate warranty work.

       Requirements to increase energy efficiency by local utility companies literally force builders to find new and better ways to lower your utility bills and save the environment. Many new homes are now equipped with dual-paned "low-E squared" glass, likened to putting sunglasses on a new home, providing more energy efficiency and less fading to furniture, cabinetry and carpeting in brutal sun-lit areas. The newer vinyl frames are less prone to leakage from moisture and air, provide more noise abatement, and even glide more easily than aluminum or wood frames. Innovations such as these in new home construction help contribute to a lower budget for utilities, less frequent home repairs, and more peace of mind in the future. Innovations in insulation, trusses, and concrete continue to be showcased at major builder conferences nationwide, adding to the appeal and quality going into new homes.

Pride of Ownership
       It's new and it's yours and no one else has ever lived in it. A new home is typically an expression of its first owners. Options to the floor plan, colors and materials chosen to decorate it, and even the excitement felt during the walk-through with the builder, make up a snapshot of you and you alone. No one else's cooking smells, pet odors, cigarette smoke, or family squabbles ever took place in your new home. The pride taken in fine-tuning a home's trappings and landscaping the first few years adds to its character and fills up photo albums. The neighborhood is filled with people reflecting much of the same pride and concerns for the future of the neighborhood. A natural commonality created by everyone being literally in the same boat at the same time (putting in landscaping, pools, or enhancing their new homes) breeds a rapport unlike established neighborhoods. This is your history and of those around you, taking pride in either your beginnings or your accomplishments. It is a place where Thanksgiving dinners, new babies, the eventual empty nest, and family memories are happening.

       Buying a home is, of course, a very special and very emotional decision for most people. Whether to buy new or used will continue to be a topic of discussion for some time.  In the building industry, however, many professionals will smile when asked why to buy a new home instead of one with previous experience. "Well," they'll smugly reply, "because it's brand new!".

       Contact Conbeth Construction & Development today for more information on buying a home from a local builder in St. Tammany Parish.  As a builder, we can direct you to the best plan for your house buying needs, as well as help you design the perfect home for you and your family.  Contact Us Directly at 985-898-2214 or via e-mail at info@conbeth.com.  We are here to help you build your dream home!

Tip of the Quarter

Build for Tomorrow, Today

Future-Proof for Technology

       No matter the stage of life your clients are in today, it will not always be the same. The choices that your clients make when building or remodeling a home not only affect them today, but down the road as well.

       “I always tell my clients that it is imperative to future-proof their homes,” said Victoria Martoccia, president of Martoccia Custom Construction. “Even if it isn’t in the budget right now, you still need to discuss the dream home ideas as well as the ‘what if’ scenarios so that you can design a home that can handle whatever the future might bring.”

       Creating a home that can accommodate a young family, an aging parent and a disabled friend simultaneously is a concept that is gaining traction throughout the United States. Simultaneously, homes are becoming more dependent on technology components. As Generations X and Y, who grew up using computers and cell phones, start to take responsibility for their baby boomer parents, it will only become more important. Ensuring that each and every home builder has the foresight to pre-wire homes to support new technologies is paramount to survival in the industry.

Listen. Plan. Design. Build.

       There are four major steps to ensuring a home owner’s lifestyle today and tomorrow are addressed when building or remodeling a home. First, the builder and ESC must sit down with the homeowner to ask questions and listen to gain an understanding of how they need the home to perform. Second, all parties need to discuss available technology options and plan ahead for future additions. Third, the ESC and home builder ought to work together to design the desired systems. Finally, when all of those steps have been completed, to the approval of all parties involved, the project can officially begin.

       In terms of building and remodeling homes, it is imperative to spend time with your client, asking important lifestyle questions before commencing with any project.


The Importance of Give and Take

It is impossible to build one style of home with one set of features that suits every lifestyle. But, it is possible to create a space and pre-wire for future technology. Dialogue between the homeowner, builder and ESC ensures that all possible options are discussed and addressed throughout the building process and beyond.  Questions to ask are:

• How long do you intend to live in this home?
• Do you have health concerns? This could not only lead to a discussion about increasing the doorway widths and non-slip flooring, but also lighting control, remote access entry points, whole home speakers and telehealth options.
• Where do you spend the most time in your home? This could lead to discussions about home theaters, multi-room audio or upgraded kitchen appliances located at different levels to accommodate a wide range of heights and abilities.

       “Life is anything but predictable. It is imperative that all builders sit down with their clients to have frank discussions about the future,” said Martoccia. “The best builders and ESCs work together with their clients to determine how to best future-proof their designs. This includes pre-wiring with Cat5 cable throughout regardless of which technologies are in the original budget. We need to work together to think of everything with an eye toward utilizing it for a later function.”

       “When building or remodeling a home, it is difficult to think about future resale value, but that’s really an important aspect of future-proofing,” said Anika Ruff, project manager for Electronic Systems Design (ESD). “Things happen every day to affect your daily life including possible job relocations or a younger family outgrowing their residence. By future-proofing homes through universal design and aging in place concepts — with pre-wires and well-thought out design aspects — your homeowners will insulate themselves against costly renovations and retrofit options that will appeal to the population at large.”

       In the words of American movie rebel James Dean, “Dream as if you’ll live forever; live as if you’ll die today.”  Dean was incredibly perceptive in that you should always dream big, but be aware that things happen in your life and you should enjoy what you can today because tomorrow is an entirely new day.

       As more Americans approach retirement age over the next five years, builders and ESCs alike need to address the changing needs of the nearly 78 million seniors of whom nearly 90% want to remain at home. With this in mind, the use of technology and universal design concepts will help ensure that this is a possibility.

As a green builder, Conbeth Construction & Development keeps informed of all of the latest green building technologies for energy efficient systems.  Conbeth also understands that technology is rapidly changing over weeks and months, not years.  If you are looking for a builder that is proactive in keeping up with all of the latest trends in the real estate market, look no further than Conbeth.  For more information, you can Contact Us Directly at 985-898-2214 or via e-mail at info@conbeth.com.

Click Here for the Source of the Information.

Building Leaner Could Be a Matter of Survival in Challenging Housing Market

        In a housing market that is beginning to show some signs of life and an economy that continues to challenge consumers, lean building methods are the way to go for builders who need to gain better control over their construction costs, Scott Sedam, president of TrueNorth Development, said at the NAHB International Builders’ Show in Orlando in January.

The savings can be dramatic.

       Over the past four years Sedam’s company has facilitated 65 implementations of the lean building approach. More than 700 builders have been enlisted in that process — including all levels of personnel and every department in the organization — not just the senior managers who ultimately are responsible for the waste in the first place.

        Also on board were more than 1,400 suppliers, trades, distributors and manufacturers — who turn out to be a greatly underestimated source of savings when they are encouraged to look for improvements in their building products and processes, which is an opportunity for them to fatten their profits as well.

       Using a highly structured process, more than 10,000 suggestions for building more efficiently have been considered.

       As a result, “more than $125 million in improvements have been identified to date and we know we are just scratching the surface,” said Sedam.

        For the most part, lean building hasn’t been taken seriously by the housing industry, but a brutal housing downturn that has decimated the ranks of U.S. builders by as much as 50% to 60% could be the opportunity that brings it to prominence.

       With factory capacity down as a result of the recession, adding an even greater sense of urgency will be impending product shortages which, along with serious labor shortfalls, could be only a year and a half or so away, he added.

        “A minimum of $1 out of every $3 spent in product and process is waste,” said Sedam, including 15% to 20% in wasted materials and another 20% to 25% wasted in the building process.

        “Product waste is far easier to identify, quantify and eliminate than process waste,” he said, because “the product is tangible.” But “for every $1 you find in product, you will find $1.50 in process.”

        For instance, he estimated there are 50 unnecessary trips to the average house from the 30 to 40 supply and trade companies that typically come onto the construction site. At an average cost of $200 per trip, that pencils out to $10,000 worth of unneeded visits.

        “Lean design is a highly structured process,” Sedam emphasized, “and it can’t be done informally.” An ad hoc approach may yield 10% to 15% in savings, but “a year later you still are working on the same problems.”

Among the Many Principles of Building Green:

• “For the largest profit, use the smallest possible number of suppliers and trades,” he said. “Sole sourcing can be remarkable, but you have to have the absolutely right trade to work with.”

      Each extra trade drives up the complexity of the job exponentially, he said.

• Be wary of the lowest bid because it rarely results in the lowest cost.

      State workers comp insurance payments are worth ferreting out, he said, because the trades who are paying the lowest premiums tend to be the    safest, and that is a predictive factor in the quality of their work. “Accidents cost you more,” he said.

• Measure the process, in close to real time.

      Sedam will go to a builder’s office and ask to be shown each phase of production for the year, with maybe five average cycle days in each phase and for different communities and different models.

      If the amounts of time involved are “all over the map, it really tells you something,” Sedam said. “It should take the same number of days no matter what you build. Build them on the same schedule, build them all fast, everything is predictable.”

• At least monthly, audit the materials that are dropped off at the site.

      “You need to audit things,” he said. For example, problems with cracking concrete can be remedied by recording the temperature and slump rate of the material when it is delivered. “It takes three minutes. Write down the measurements, give a copy to the driver and send it to the concrete company. Whether it is a good temperature or not, they know you are paying attention.”

• Avoid backcharges, which “are a poor substitute for good management.”

      He cited the example of a company that produces 500 units a year that had no backcharges in 2010 because it was able to manage the process.

      “You need to have the right suppliers and rates and the right people managing them,” he said.

      Backcharges cost money, create a “he said, she said” situation and instigate consternation and arguments. “Continual backcharging is indicative of problems in the company, and it creates ill will and problems.”

• Monitor how materials are being used because waste is rampant everywhere — in concrete, wood, engineered wood, brick, block, siding, roofing, et. al.

      In a 1995 study of lumber usage, construction management students measured every board inch of material that went into comparable homes in Chicago and Detroit. The yield on the wood in the Chicago home was 85.1%, compared to 74.9% in the second home — a $1 million difference in value between the two.

      “Measure the yield on the lumber that goes into your house,” he advised.

• Avoid high-sided dumpsters, and at least use ones with low sides. “They actually create waste, they bring things in,” he said.

      Sedam said he had participated in an exercise in which 30 workers emptied out a 30-cubic foot dumpster on the site, sorted the contents and found $1,600 worth of usable materials.

• Builders need to count their process numbers.

      The wasteful cutting of drywall is a prime example. Excluding the garage, builders should determine the sheetrock ratio of their homes — the installed square feet of material divided by the square feet of the living area.

      There will be differences and where the ratio is higher, builders should look for ways to bring it down. “Look at how you are doing the design,” he said. The difference in the drywall needed for a 12' square bedroom versus a room that is 12', 2" can represent $500 in savings.

      Also, “look at the ratio of the amount of board purchased over the amount of board actually installed in the house,” and find ways to reduce the waste.

• Spend time and money on getting the plan right up front because 50% of waste in product and process is designed into the house.

      Construction drawings should be site-specific and fully detailed. “With today’s technology, not having great plans is inexcusable,” and it ends up costing significantly more in expenses. “Fully detailed plans pay off 50 to one, 100 to one,” he said.

      Also, “you cannot eliminate waste designed-in up front, until you understand and measure the costs down-stream.”

• Hardly anyone does it, but a post-construction review and analysis with suppliers and trades “is essential,” he said. “Look at how to improve the plan and take waste out of it. Do every house individually before the drywall.”

       Sedam also told builders that they need to keep in touch with their customers though the sales staff. “You have to have feedback about what the customer wants and will pay for.”

        Builders also need to keep in mind that “dumbing down houses, making them ugly and hard to sell, is not lean. Lean is about value.”

       Conbeth Development is a green builder in St. Tammany Parish and has been building new homes for 40 years.  Conbeth believes in adjusting their procedures to match the cutting edge processes and technologies in the construction industry today.  Home buyers can be assured that they are getting the best home for the best price from Conbeth Construction and Development regardless of the price increases in the current market.   If you as a new home buyer are interested in building a totally "green" house, do not hesitate to Contact Us Directly at 985-898-2214  or via e-mail at info@conbeth.com.  We look forward to hearing from you!

Click Here for the Source of the Information.

How to Pay Off Your Home Faster in Five Steps

       For homeowners, the key to becoming debt free for life is paying off your mortgage as quickly as possible. Of course you can't even think about doing that unless you have the right kind of mortgage -- which is to say, a 15- or 30-year fixed mortgage with payments you can afford to make. If you don't have that kind of mortgage, I'm going to tell you how you can get one. But for the moment, let's assume you either have that kind of mortgage or are shopping for a mortgage and can choose. How do you make the right choice so you can pay it off as quickly as possible?

Step 1: If You're Loan Shopping, Choose a 15-Year Mortgage.

       If you can manage the higher monthly payments, signing up for a 15-year fixed mortgage is the way to go. Not only will you be free of your mortgage debt sooner, but you will also save A LOT of money in the process.

       Let's say you have a $300,000 mortgage with a 6% interest rate. Paying it off in 30 years will cost you $647,515, and $347,515 will be interest.

       But if you have a 15-year fixed mortgage for the same amount, you would only pay $155,683 in interest -- a savings of roughly $192,000! Of course, your payments would be $733 higher with the shorter term ($2,532 a month vs. $1,799), but that will pay off for you big-time in the long run.

Step 2: Pay Off Your 30-year Mortgage Early.

       I know that, especially these days, most people simply can't afford to make the higher monthly payments that go along with having a 15-year fixed mortgage. But that doesn't mean there's nothing you can do to speed up the day when you will own your home debt free.

       The problem with a 30-year mortgage is that it's designed to make you spend 30 years paying it off. If we stick with our $300,000, 30-year fixed mortgage example, that means you're paying the bank nearly $348,000 in interest! But what if you were to take that same mortgage and make the payments on a biweekly-instead of a monthly schedule? This simple change can cut the total payment time by six years and save you $72,000 in interest payments.

       It's not a trick. Here's how it works. All you do is take your 30-year mortgage and instead of making the monthly payment the way you normally do, split it down the middle and pay half every two weeks. In the beginning, paying every two weeks probably won't feel any different from paying once a month. But as you should know, it's not really the same thing.

       A month, after all, is a little longer than four weeks. Therefore, over the course of a year you gradually get further and further ahead in your payments, until by the end of the year you have paid the equivalent of not 12 but 13 monthly payments. Best of all, because it is so gradual, you will hardly feel the pinch.

       The impact of that extra month's payment is awesome. Depending on your interest rate, you will end up paying off a 30-year mortgage somewhere between five and seven years early, and a 15-year mortgage three years early. You will be debt free years ahead of schedule, saving you tens of thousands of dollars in interest payments over the life of your loan.

       If you'd like to figure out how much you could save on your own mortgage, visit finishrich.com. First, click on the Free Stuff tab then select See All Calculators under the calculator section, then click the Get a biweekly mortgage payment plan" calculator under the mortgage section. You can then plug in your own numbers and quickly see how much you could save by switching to a biweekly payment plan.

Step 3: Set Up An Automatic Biweekly Payment Plan with your Lender.

       These days most mortgage lenders offer programs designed to totally automate the process I've just described. To enroll, all you need to do is phone your lender or go to its website. Many banks also offer this service for free to customers who do all their banking with them. Those that don't usually refer you to an outside company that runs the program for them. These companies generally charge a set-up fee of between $200 and $400. In addition, there's a transfer charge of $2.50 to $6.95 that's assessed every time your money is moved from your checking account to your mortgage account.

       A lot of companies now provide these services. To be sure you're dealing with a reputable firm, you should probably use one that is referred to you by your bank.

Step 4: Do the Same Thing Yourself for Free.

       Why spend hundreds of dollars when you could just as easily use your bank's online automatic bill-paying service to schedule biweekly mortgage payments for yourself? Unfortunately, it's not that simple. The problem is that if you split your monthly mortgage payment in half and send it in to your mortgage lender every two weeks yourself, the lender will simply send it back to you because they won't know what to do with it. Or worse, they'll stick the money in an escrow account and just let it sit there.

       What you can do is add 10% to your regular mortgage check each month and have the money applied toward the principal. The effect will be the same. That's my suggestion. Add an extra 10% per month -- and make the payment automatic. Make a point of asking your bank to make sure that this extra payment is credited toward your principal -- and then check your monthly statements to make sure they did it correctly.

Step 5: Get the Right Kind of Mortgage.

       My early pay-off plan won't work unless you have the right kind of mortgage -- a 15- or 30-year fixed mortgage with payments you can afford. So, if you plan to be in your home more than five years and you have anything but a 15- or 30-year fixed mortgage -- say, one of those adjustable-rate deals that have gotten so many people in trouble -- then you should refinance NOW. Rates are at historic lows as I write this -- but this won't last forever.

       First, go to a website like lendingtree.com, quickenloans.com or bankrate.com and see what mortgage lenders are offering. Then call your current lender and ask if they can match the best deal you found online.

       Lending standards are much tighter than they used to be, but if you can meet the requirements, most banks will be happy to refinance your mortgage. The three basic criteria are:

• Your debt-to-income ratio, or DTI. Mortgage lenders want your DTI to be less than 38%. That is, your monthly mortgage payments shouldn't total more than 38% of your monthly income.
• Your loan-to-value ratio or LTV. Most lenders want it to be less than 80% -- meaning the total amount you owe on your house should be no more than 80% of what the house is worth. (For example, if your house is worth $200,000, they will not refinance a mortgage of more than $160,000.)
• Your credit score. You'll generally need a FICO score of at least 620 to even be considered for a loan and at least 740 to get the best interest rates.

       Refinancing only makes sense if the savings you enjoy from lower interest payments more than cover the cost of closing the new mortgage. If you're going to be in your home for more than another three years, you'll generally come out ahead as long as your new interest rate is at least one full percentage point lower than what you are currently paying. Have your bank run a "break-even analysis" for you, they can tell you,

       Yup, the cost of refinancing will be paid off in 28 months [or whatever]. You need to know this before you pull the trigger.

       It's time to go back to the basics of homeownership: buy less house than you can afford and pay off your home as fast as possible. A debt-free home is really a nice home to live in and it's absolutely worth striving for! For more tips on paying off your mortgage faster, visit me online at finishrich.com.

Click Here for the Source of the Information.

Changing Jobs Could Affect your Mortgage

       Changing jobs brings about a lot of lifestyle changes – from new opportunities to a possible new location. Many of these changes are positive changes, but if you are looking to buy a home along with your new career, changing jobs may not be the smartest move. Change in salary and home employment time structure will have an important role in your ability to qualify for a loan. To guarantee loan approval, you may want to wait to make the big career move until after you have purchased your home.

       If you are a salaried employee, earn no additional income from commissions or bonuses, and you do not qualify for overtime; then switching employers could create a problem. If you must switch jobs, it is best to stay in the same line of work, and hopefully you will be earning a higher salary which could improve your chance at loan approval.

       If you are paid on an hourly basis and you work 40 hours a week consecutively without overtime, then changing jobs should not affect your ability to qualify for a loan.  If you are a part-time employee, a lender will average your earnings over the past few years. If you switch jobs then there will be no way to track your income at your new job. In this situation it is important to stay at your current job until after you have qualified for a loan.

       If most of your earned wages comes from commission, then changing jobs could affect you the most, due to the way your income is calculated by a mortgage lender. Lenders calculate your income based on the average income over the past two years. If you switch jobs then there is no way to track or calculate what your commission will be at your new job. The same goes for employees who earn a big part of their income through bonuses. It is best, in these situations not to change jobs before buying your home.

       Switching from corporate employment to self-employment before purchasing a home could be detrimental to your mortgage application. Your salary will be untraceable. Therefore if you are considering becoming self-employed before purchasing a home it is advised that stay at your current job.

       It is important to keep all of these situations in mind if you are thinking of purchasing a home in the near future. If you are looking for a home to buy, visit Real Estate for Sale for more information. In order to speak to the builder about purchasing or building a new home, please Contact Us Directly at 985-898-2214 or via e-mail at info@conbeth.com.

Buying The Right Home

       Buying a new home can be a stressful experience – there is so much to think about such as budgeting, location, and all of the extras to accommodate you and your family.  If you are on our website, chances are that you are looking for a new home right here in St. Tammany Parish, but if you are thinking of building a home or custom home in the Greater New Orleans area, Conbeth Development can assist you with this process as well.  After all, buying a new home is not something you do very often. A house not only represents where you live; it also serves a place for you and your spouse to build a family, make memories and call home. So in order to ease your frustration in buying the right home, here are a few simple tips to keep in mind before making your selection.

1. Create A Budget – Before you begin looking for a home, it is a smart idea to create budget. It is important to know your income versus your monthly expenses to make sure you do not purchase a home that is out of your price range. A budget will help you to discover what sort of payment you can afford on a monthly basis and still allow you to live comfortably. Creating a budget will help you to stay stress free and will allow you to love your home instead of stressing out about making monthly payments.

2. Get Pre-qualified – Getting Pre-qualified for a mortgage is the next important step. Getting pre-qualified by a mortgage company will give you an idea of what you will be able to borrow from a bank, and will give you an idea of what price range to stay in when looking for a home. If you are unable to get pre-qualified for a certain home price, at least you won’t waste time looking in that price range when you are unable to buy.

3. Create A Wish List – Creating a wish list of you and your family’s needs will make sure you choose the right home to accommodate your family. Decide what is important in finding a home – such as a pool, yard space, bedroom size and number, and the number of bathrooms. Deciding the area in which to live is also important. For example do you want to live near schools, parks, shopping, restaurants, and etc.? A wish list will help you narrow down your home search, so you are not wasting time looking for homes that will not suit your lifestyle.

5. Write A Journal – While viewing homes it is smart to keep a walk-through journal about your experiences of each home you visit. Creating a journal including positive and negative points of each home helps you to weigh your options. A smart idea is to create a check list or rating list including all of the things you listed in your wish list then rating these features for each home you view. The homes with the highest scores are the ones you may want to consider viewing again before making your decision.

       Finding your home should be a fun experience – by following these tips you can save stress and time. Finding your perfect home may be just around the corner so Happy House Hunting! If you would like more information about searching for existing homes in St. Tammany Parish and the Greater New Orleans area, please visit Real Estate for Sale from Conbeth Construction & Development to find a home, Contact Us Directly at (985) 898-2214 or e-mail us at info@conbeth.com.