Should you buy or build a home – this is a question many home buyers are contemplating. According to Walter Molony of the National Association of Realtors, there is a big price difference between buying an existing home and building a new one.  The main advantage to having a home built is that you can customize it, but financially, buying an existing home is often the better financial choice.  Building a home is also an lengthy process that requires a lot of work on the part of the buyer  What would be the advantages of buying an existing home?

• The home is already there in an established neighborhood so you know what the neighborhood looks like and who lives there.
• If you build, you not only have to take into account the cost of the home but you have to buy the lot to build it on.
• Construction of a new home is not always smooth sailing. Things always come up and more often than not you end up spending more than you originally thought. With an existing home you pay one price and know exactly what you are getting.
• When you buy an existing home there is not much work for the buyer besides securing the financing and the transaction is usually complete within 6-8 weeks.  If you build the process can take 4-6 months or more and you have decisions to make all along the way, meetings with the builder and more.

There is nothing wrong with building your new home but be aware that is it is long process that can be a lot of work and end up costing a lot of money, it is not a decision that should be made lightly.

Although mortgage rates are at their lowest point in at least 40 years and the current 30 year rate is at about half of the historical average are loan rates boosting the home market?  These low rates are helping to jump start the housing market but there a few problems that are still keeping the market from coming back in full force.

• Many homeowners still cannot sell their homes as they owe more on their home than what they can sell it for so until prices really increase they are stuck where they are.
• Financing guidelines have really tightened up and in many cases banks are requiring higher down payments which many buyers do not have.
• With the tight lending practices, many buyers are unhappy that they cannot qualify for the amount of home they really want to buy.
• Lenders do not refinance loans on homes that are under water, so if you owe more than your home is worth and you cannot afford to make up the difference in cash you cannot refinance.
• The best interest rates are only available to those with excellent credit.

Overall the market is up and is continuing an upward trend but it will take time for everything to be back in balance.

If you are thinking about buying a home one of the first things you need to do is check on and perhaps improve your credit score. Whether or not you can get financing and what kind of financing you can get depend a lot on your credit score.  If you score is not up to par you will need some time to work on it before you can get pre-qualified for a mortgage which also has to be done before you can buy a home. (more…)

I am often asked what is HomePath?  The HomePath sign is appearing in the windows of  homes or on for sale signs but many people don’t know what this is. HomePath is financing offered by Fannie Mae as a home renovation loan and is available on Fannie Mae foreclosures.  It is not the same as an FHA 203K loan. (more…)