Residential neighborhood, aerial view, Baden Wurttemberg, Germany.

HUD Looks to Eliminate Regulatory Barriers to Affordable Housing

The Department of Housing and Urban Development published a request for information to dig into how regulations could be creating barriers to affordable housing.

The RFI is seeking public comment on federal, state, local and tribal laws, regulations, land use requirements and administrative practices that raise the cost of affordable housing and contribute to housing shortages.

“Owning a home is an essential component of the American Dream,” HUD Secretary Ben Carson said. “It is imperative that we remove regulatory barriers that prevent that dream from becoming a reality.”

“Through this request, communities across the country will have the opportunity to identify roadblocks to affordable housing and work with state, federal, and local leaders to remove them,” Carson continued.

Earlier this year, President Donald Trump signed Executive Order 13878, “Establishing a White House Council on Eliminating Regulatory Barriers to Affordable Housing,” saying that, for many Americans, the supply of available housing has not kept pace with the demand for housing by prospective renters and homebuyers, driving up housing costs.

Now, HUD is looking for the following information points:

  • Specific HUD regulations, statutes, programs, and practices that directly or indirectly restrict the supply of housing or increase the cost of housing
  • Policy interventions, solutions, or strategies available to State, local, and Federal decision makers to incentivize State and local governments to review their regulatory environment or aid them in streamlining, reducing or eliminating the negative impact of State and local laws, regulations and administrative practices
  • Ways that State-level laws, practices, and programs contribute to delays in the construction industry and specific laws, practices, and programs that could be reviewed
  • Common motivations or factors that underlie local governments’ adoption of laws, regulations, and practices that demonstrably raise the cost of housing development, and whether such factors vary geographically
  • Peer-reviewed research and/or representative surveys that provide quantitative analyses on the impact of regulations on the cost of affordable housing development
  • Performance measures, quantitative and/or qualitative, the Council should consider in assessing the reduction of barriers nationally or regionally and advantages and disadvantages of each measure
  • Recommendations on how to best utilize HUD’s Regulatory Barriers Clearinghouse for States, local governments, researchers and policy analysts who are tracking reform activity across the country

This RFI is a part of the work Carson is undertaking as the chair of the White House Council on Eliminating Regulatory Barriers to Affordable Housing. The Council’s eight federal member agencies are engaging with governments at all levels—state, local and tribal—and other private-sector stakeholders on ways to increase the housing supply.

Source: https://www.housingwire.com/articles/hud-looks-to-eliminate-regulatory-barriers-to-affordable-housing/

Deep snow has been shoveled, cleared and piled along the sides of the front yard footpath of this colonial style home. Two small holiday Christmas trees at the end of the walkway are decorated with Christmas ornaments and wide, bright red ribbon Christmas bows. Heavy blizzard snow continues to come down hard and blow around in all directions - already starting to re-coat the slippery surface and cover the fresh footprints. Nothing surprising here - just another early January winter snow storm in a rural suburban residential district neighborhood near Rochester, New York.

Tips for Winterizing Your Home

Winter is coming! See below for a list of top tips for winterizing your home.

CHECK THE EXTERIOR, DOORS AND WINDOWS

  • Inspect exterior for crevice cracks and exposed entry points around pipes; seal them.
  • Use weather stripping around doors to prevent cold air from entering the home and caulk windows.
  • Replace cracked glass in windows and, if you end up replacing the entire window, prime and paint exposed wood.

HVAC SYSTEMS

  • Get your HVAC system serviced, and have your duct work checked to be sure the air flow is uninterrupted and free of holes from pests.
  • Reverse all ceiling fans in the house.  This will help push warm air downward and force it to recirculate.
  • Change the air filters in your home.
  • Check the cold air return vents and make sure they are not blocked by furniture.  Your furnace needs these to operate at high efficiency.

CHECK FOUNDATIONS

  • Rake away all debris and vegetation from the foundation.
  • Seal up entry points to keep small animals from crawling under the house.
  • Tuckpoint or seal foundation cracks. Mice can slip through space as thin as a dime.
  • Inspect sill plates for dry rot or pest infestation.
  • Secure crawlspace entrances.

SMOKE AND CARBON MONOXIDE DETECTORS

  • Install a carbon monoxide detector near your furnace and/or water heater.
  • Replace batteries in smoke and carbon monoxide detectors.
  • After replacing batteries, test all detectors to make sure they work.
  • Buy a fire extinguisher or replace your existing one if it is older than 10 years.

PREVENT PLUMBING FREEZES

  • Locate your water main in the event you need to shut it off in an emergency.
  • Shut off the water to your hose bibs inside your house (via turnoff valve), and drain the lines. Then  insulate the spigot itself.
  • Insulate exposed plumbing pipes that pass through unheated areas of your home, like the garage for instance.
  • Flush your water heater to remove built-up sediment.
  • If you do go on vacation, leave the heat on, set to at least 55 degrees.

GET THE FIREPLACE READY

  • Cap or screen the top of the chimney to keep out rodents and birds.
  • If the chimney hasn’t been cleaned for a while, call a chimney sweep to remove soot and creosote.
  • Buy firewood or chop wood. Store it in a dry place away from the exterior of your home.
  • Inspect the fireplace damper for proper opening and closing.
  • Check the mortar between bricks and tuckpoint, if necessary.

PREPARE LANDSCAPING & OUTDOOR SURFACES

  • Trim trees if branches hang too close to the house or electrical wires.
  • Turn off your sprinkler system.
  • Clear the gutters of fallen leaves and debris.
  • Ask a gardener when your trees should be pruned to prevent winter injury.
  • Plant spring flower bulbs and lift bulbs that cannot winter over such as dahlias in areas where the ground freezes.
  • Seal driveways, brick patios and wood decks.
  • Move sensitive potted plants indoors or to a sheltered area.

Click here for a printable version.

Important Compliance Update from TREC

Realtors Subject to New TREC Rules Prohibiting Pay-to-Play Programs

Reminder: RESPA, P-53 and Anti-Rebating Statutes Remain in Effect for Title Agents and Are Enforced

The Texas Real Estate Commission (TREC) recently amended their rules related to rebates and specifically highlighted the prohibition of pay-to-play arrangements in the real estate marketplace. TREC said their amended rules are intended to strengthen settlement service provider independence and provide clarity for TREC license holders regarding consumer protections that also exist under state and federal rules and statutes.

To enhance your understanding of TREC’s expanded regulations, we recommend you read TREC’s explanation of their pay-to-play rule revisions. 

Here’s TREC’s expanded §535.148 related to receipt of undisclosed commissions or rebates:

(d) A license holder may not pay or receive a fee or other valuable consideration to or from any other settlement service provider for, but not limited to, the following:

  1. the referral of inspections, lenders, mortgage brokers, or title companies;
  2. inclusion on a list of inspectors, preferred settlement providers, or similar arrangements; or
  3. inclusion on lists of inspectors or other settlement providers contingent on other financial agreements.

(e) In this section, “settlement service” means a service provided in connection with a prospective or actual settlement, and “settlement service provider” includes, but is not limited to, any one or more of the following:

  1. a federally related mortgage loan originator;
  2. a mortgage broker;
  3. a lender or other person who provides any service related to the origination, processing or funding of a real estate loan;
  4. a title service provider;

Read TREC’s explanation of the changes »

Title Agents Are Subject to P-53, RESPA, and Anti-Rebating Statutes 

Title agents are subject to federal and state rules and statutes–including the Real Estate Settlement Procedures Act (RESPA) and TDI’s Rule P-53–prohibiting marketing-related rebating practices.

In response to questions from title industry professionals regarding the continued applicability of TDI’s P-53 rule, TLTA has compiled background information, FAQs, and other helpful resources related to the state and federal statutes that prohibit marketing-related rebating practices.

TLTA’s Anti-Rebating Resources for Title Professionals »

Background
In 2004, the Texas Department of Insurance (TDI) adopted Procedural Rule 53 (P-53), which prohibits rebates and discounts for the soliciting or referring of title insurance business. P-53 is an important market conduct rule that serves to protect consumers and maintain an ethical Texas title insurance industry.  

There are also federal and state statutes that prohibit marketing-related rebating practices, as follows:

Federal Law

Under the federal government’s Real Estate Settlement Procedures Act (RESPA), kickbacks and unearned fees are prohibited, and a person cannot give or accept anything of value for a referral incident relating to or part of a settlement service involving a federally related mortgage loan. Consumer Financial Protection Bureau (CFPB) is responsible for enforcing RESPA, as well as state attorneys general.

Review the federal statute: RESPA – Section 8
Review CFPB’s rule: 12 CFR § 1024.14 

State Law

The state statute goes a step further than federal law, specifically citing the title insurance industry. In addition to prohibiting rebates and discounts, the statute states that any “thing of value” may not be “directly or indirectly paid, allowed, or permitted by a person engaged in the business of title insurance or received or accepted by a person for engaging in the business of title insurance or for soliciting or referring title insurance business.”

Review the state statute: Texas Insurance Code  §2502.051

FAQs

Is P-53 enforced?
Yes, TDI’s disciplinary orders include P-53 violations. Disciplinary orders dated 2013 and older must be requested via open records request.

What is the difference between RESPA and P-53?
RESPA is the federal statute addressing the referral of settlement services and includes the typical activities of Texas title agents. RESPA is enforced by the CFPB. Procedural Rule 53 implements and clarifies the Texas statute as it relates to discounts and things of value used to solicit or refer title insurance business. TDI enforces P-53.

How do I determine if I’m in compliance?
In general, the TDI rule and other applicable statutes were not written with black-and-white examples to guide you. If you’re unsure about your actions and how P-53 might be applied to them, please consult your regulatory counsel.

The statute and rule do offer some clear guidance on how to comply, however. For instance, a title agent or company cannot give a thing of value conditioned on the referral of title insurance or provide a rebate to the consumer.

Past examples of violations include any activities that subsidize or pay for what would be business expenses for a Realtor or any other producer of title insurance business, such as printing sales materials or providing meeting or office space. Additional examples include reducing other fees in the transaction such as an escrow fee on an ad hoc or conditional basis. These are just some examples and there are many others – this is not intended to be an exhaustive list. Again, the best course of action if you are unsure is to consult legal counsel to ensure you are in compliance.


What should I do if I have information about a P-53 violation?
First, consider contacting the management at the companies involved, and alert them that they are engaged in activity that concerns you. If the suspected violation of P-53 does not stop, you can submit a formal complaint to the Texas Department of Insurance. Once you file a complaint, TDI will keep you informed of the progress and final resolution of the complaint.

The complaint you submit will be publicly available (i.e., this is not an anonymous process).

Source: TLTA

signing papers republic title

Does Extending the Closing Date Extend a Contingency Date?

Below, please find helpful information that was posted on TexasRealEstate.com.

 

Members have called regarding situations where a contract is signed with an attached Addendum for Sale of Other Property by Buyer (TXR 1908) and the buyer will not obtain proceeds from the sale of her other home by the contingency date stated in Paragraph A. Callers ask if extending the closing date on the sales contract will also extend the contingency date in Paragraph A, thereby giving the buyer the additional time she needs to obtain her proceeds. No. An amendment extending the closing date does not automatically extend the contingency date in Paragraph A. Paragraph A of the Addendum for Sale of Other Property by Buyer states that if the contingency is not satisfied or waived by the contingency date then the contract will terminate automatically. A buyer wishing to continue in a transaction past the contingency date without having obtained her proceeds would have to waive the contingency. Alternatively, if the parties want to change the contingency date in Paragraph A, then that change must be specifically addressed in an amendment.

 
 
Sold house sign in Midwest suburban setting. Focus on sign.

Texas Home Sales Continue To Increase In 3rd Quarter

Texas home sales increased 6.4%—to 100,733 sales in the third quarter of 2019—compared to the same period last year, according to the 2019 Q3 Texas Quarterly Housing Report released today by Texas REALTORS®.

The statewide median home price for the quarter also increased to $245,000, a 4.3% increase over the third quarter of 2018. Of all sales during the third quarter of 2019, 33.4% were priced from $200,000 to $299,999. Homes priced from $100,000 to $199,999 represented 26.9% of sales for the quarter.

“Texas ended the summer selling season with continued growth in home sales and median price in most of the major markets,” said Tray Bates, chairman of Texas REALTORS®. “Our housing market remains healthy due to strong demand and steady increases in housing inventory.”

There was an increase of active listings from the previous year of 3.5% for 111,013 listings in the third quarter of 2019. Texas homes spent an average of 54 days on the market, two days longer than the same quarter last year. 

“The Texas housing market continued to spur strong demand during the third quarter,” said Jim Gaines, Ph.D., chief economist with the Real Estate Center at Texas A&M University. “Based on sales activity, we saw prices, months of inventory, and active listings all experience significant growth in most of the markets across the state. During the remainder of the year, we expect attractive interest rates to incentivize homebuyers. In addition, new home construction will continue to pick up in markets such as Houston and Dallas, leading to an increase in housing inventory availability.”

Source: https://www.texasrealestate.com/members/posts/texas-home-sales-continue-to-increase-in-3rd-quarter/

Sold Home For Sale Real Estate Sign in Front of Beautiful New House.

After Closing Reminders For Sellers

Your house has sold and the deal is closed.  Now what do you do?

Here are some reminders for you as the seller:

  • Cancel your homeowners insurance with your insurance agent once the transaction has closed, funded and your personal items have been removed from the home. There may be a prorated refund of your homeowner’s policy, based on the latest renewal date, owed to you. If you are remaining at the property after closing, you should notify your insurance agent of this change.
  • Cancel your auto deduction for your house payment with your current lender if applicable.
  • Your lender will refund all monies left in your escrow account approximately 15 to 30 business days after receipt of the payoff funds. The lender will mail a package containing your original Promissory Note marked “PAID” and the other loan file documents. Retain these for future reference. When you receive this confirmation, you may also receive a “Release of Lien” or “Reconveyance of Lien” from your lender. If the release does not appear to have been recorded with the County Clerk’s office, please forward it to your closer at the title company. We have collected for the recording of the document at closing and will send it to the County to be filed, thereby releasing the lien of record.
  • Depending on what time of the year you sold your property, the Taxing Appraisal District may not have updated the account to show a change in ownership. If you receive a Tax Bill for the property that you sold, refer to your closing statement and send the bill to the new owners.
  • You will receive a Substitute Form 1099-S from Republic Title within 30 days of closing. In addition, retain your closing statement, it serves as a Substitute Form 1099-S for tax purposes.

We hope these tips have been helpful to you in answering any post closing questions you may have had. As always, please do not hesitate to contact your closer should you have any questions. Thank you for allowing us to be a part of this transaction.

Click here for printable version.

Home For Sale Real Estate Sign in Front of Beautiful New House.

Updated Seller’s Disclosure Notice Effective September 1st

The Texas Real Estate Commission has released an updated Seller’s Disclosure Notice for mandatory use Sept. 1.

It’s available for voluntary use immediately.

As of Sept. 1, 2019, the new Seller’s Disclosure Notice has questions in paragraphs 6, 7 and 8 relative to floodplains, and includes definitions of the various categories according to FEMA.  In addition, questions about previous claims for flood damage or assistance from FEMA or SBA are also included.

The notice must also disclose a seller’s knowledge of water damage not due to a flood event and requires a seller to disclose whether a prior flood-related insurance claim was filed with an insurance provider or the seller received aid from FEMA.

Click here for the red-lined seller’s disclosure notice and click here for the blank seller’s disclosure notice.

 

Businessman holding modern buildings hologram, and home icon. Real estate business, building technology and smart home concept

Effective September 1, 2019: Texas Title Rate and Rule Revisions

Please note that beginning September 1, 2019, there will be a change to the basic premium rate for title insurance including an overall adjustment of -4.9 percent.  Changes made in 2019 affect 2020 Texas title rates.

The Texas Commissioner of Insurance has issued an order adjusting the basic premium rate for title insurance and amending R-5, R-8 and R-20.

Summary of Changes

Basic Premium Rate – Includes an overall rate adjustment of -4.9 percent, a starting base rate of $25,000 and three new rate tiers for policies with face values over $25, $50 and $100 million.

Refinance Rate Amendment – Amends Rate Rule R-8 to provide for a 50 percent credit within the first four years and a 25 percent credit between four and eight years.

Simultaneous Issue Discount Expansion in R-5 – Allows a simultaneous issue rate credit for 90 days on transactions $5 million and above. The premium is $100 for each loan policy under these circumstances.

Construction Credit Expansion in R-20 – An extension of the credit for developers of large construction projects from one year to two years with a simultaneous issue rate for the loan policy.

These new rates will go into effect on all transactions that close (the date the papers are signed) starting on September 1, 2019.

Read the Order and View the Amendments

These changes are outlined in TDI’s adoption order. The revised rate chart and amended rules can be found in the following exhibits:

  • Exhibit A – Basic Premium Rates; Calculation for Policies in Excess of $100,000 with Examples
  • Exhibit B – (R-5) Simultaneous Issuance of Owner’s and Loan Policies
  • Exhibit C – (R-8) Loan Policy on a Loan to Take Up, Renew, Extend, or Satisfy an Existing Lien(s)
  • Exhibit D – (R-20) Owner’s Policy After Construction Period

Republic Title Online Resources

Please visit our website for additional online resources including:

As always, please feel free to contact your escrow officer if you have any questions about the new rates.  If you would like printed rate cards or need help using our online calculator, please contact one of business development representatives.

14 First-Time Homebuyer Mistakes To Avoid

Here is some great advice for the first-time homebuyer.

Buying your first home comes with many big decisions, and it can be as scary as it is exciting. It’s easy to get swept up in the whirlwind of home shopping and make mistakes that could leave you with buyer’s remorse later.

If this is your first rodeo as a homebuyer or it’s been many years since you last bought a home, knowledge is power. Along with knowing what issues to avoid, it’s important to glean first-time homebuyer tips from the pros so you know what to expect and what questions to ask.

First-time homebuyer mistakes

Here are 14 common first-time homebuyer mistakes, along with first-time homebuyer tips on how to avoid them:

  • Looking for a home before applying for a mortgage.
  • Talking to only one lender.
  • Buying more house than you can afford.
  • Moving too fast.
  • Draining your savings.
  • Being careless with credit.
  • Fixating on the house over the neighborhood.
  • Making decisions based on emotion.
  • Assuming you need a 20 percent down payment.
  • Waiting for the ‘unicorn.’
  • Overlooking FHA, VA and USDA loans.
  • Miscalculating the hidden costs of homeownership.
  • Not lining up gift money.
  • Not negotiating a homebuyer rebate.
  • 1. Looking for a home before applying for a mortgage

    Many first-time buyers make the mistake of viewing homes before ever getting in front of a mortgage lender. In some markets, housing inventory is still tight because there’s more buyer demand than affordable homes on the market. And in a competitive market, you could lose a property if you aren’t preapproved for a mortgage, says Alfredo Arteaga, a loan officer with Movement Mortgage in Mission Viejo, California.

    How this affects you: You might get behind the ball if a home hits the market you love. You also might look at homes that, realistically, you can’t afford.

    What to do instead: “Before you fall in love with that gorgeous dream house you’ve been eyeing, be sure to get a fully underwritten preapproval,” Arteaga says. Being preapproved sends the message that you’re a serious buyer whose credit and finances pass muster to successfully get a loan.

    2. Talking to only one lender

    This one is a biggie. First-time buyers might get a mortgage from the first (and only) lender or bank they talk to, potentially leaving thousands of dollars on the table.

    “A good mortgage loan officer can look at your situation and diagnose any potential roadblocks ahead to give you a clear understanding of your home-buying options,” Arteaga says.

    How this affects you: The more you shop around, the better basis for comparison you’ll have to ensure you’re getting a good deal and the lowest rates possible.

    What to do instead: Shop around with at least three different lenders, as well as a mortgage broker. Compare rates, lender fees and loan terms. Don’t discount customer service and lender responsiveness; both play key roles in making the mortgage approval process run smoothly.

    3. Buying more house than you can afford

    It’s easy to fall in love with homes that might stretch your budget, but overextending yourself is never a good idea. And with home prices still rising, this is easier said than done.

    How this affects you: Buying a home that exceeds your budget can put you at higher risk of losing your home if you fall on tough financial times. You’ll also have less wiggle room in your monthly budget for other bills and expenses.

    What to do instead: Focus on what monthly payment you can afford rather than fixating on the maximum loan amount you qualify for. Just because you can qualify for a $300,000 loan, that doesn’t mean you can afford the monthly payments that come with it. Factor in your other obligations that don’t show on a credit report when determining how much house you can afford.

    4. Moving too fast

    Buying a home can be complex, particularly when you get into the weeds of the mortgage process. Rushing the process can cost you later on, says Nick Bush, a Realtor with TowerHill Realty in Rockville, Maryland.

    “The biggest mistake that I see (first-time buyers make) is to not plan far enough ahead for their purchase,” Bush says.

    How this affects you: Rushing the process means you might be unable to save enough for a down payment and closing costs, address items on your credit report or make informed decisions.

    What to do instead: Map out your home-buying timeline at least a year in advance. Keep in mind it can take months — even years — to repair poor credit and save enough for a sizable down payment. Work on boosting your credit score, paying down debt and saving more money to put you in a stronger position to get preapproved.

    5. Draining your savings

    Spending all or most of their savings on the down payment and closing costs is one of the biggest first-time homebuyer mistakes, says Ed Conarchy, a mortgage planner and investment adviser at Cherry Creek Mortgage in Gurnee, Illinois.

    “Some people scrape all their money together to make the 20 percent down payment so they don’t have to pay for mortgage insurance, but they are picking the wrong poison because they are left with no savings at all,” Conarchy says.

    How this affects you: Homebuyers who put 20 percent or more down don’t have to pay for mortgage insurance when getting a conventional mortgage. That’s usually translated into substantial savings on the monthly mortgage payment. But it’s not worth the risk of living on the edge, Conarchy says.

    What to do instead: Aim to have three to six months of living expenses in an emergency fund. Paying mortgage insurance isn’t ideal, but depleting your emergency or retirement savings to make a large down payment is riskier.

    6. Being careless with credit

    Lenders pull credit reports at preapproval to make sure things check out and again just before closing. They want to make sure nothing has changed in your financial picture.

    How this affects you: Any new loans or credit card accounts on your credit report can jeopardize the closing and final loan approval. Buyers, especially first-timers, often learn this lesson the hard way.

    What to do instead: Keep the status quo in your finances from preapproval to closing. Don’t open new credit cards, close existing accounts, take out new loans or make large purchases on existing credit accounts in the months leading up to applying for a mortgage through closing day. Pay down your existing balances to below 30 percent of your available credit limit, and pay your bills on time and in full every month.

    7. Fixating on the house over the neighborhood

    Sure, you want a home that checks off the items on your wish list and meets your needs. Being nitpicky about a home’s cosmetics, however, can be short-sighted if you wind up in a neighborhood you hate, says Alison Bernstein, president and founder of Suburban Jungle, a real estate strategy firm.

    “Selecting the right town is critical to your life and family development,” Bernstein says. “The goal is to find you and your brood a place where the culture and values of the (area) match yours. You can always trade up or down for a new home; add a third bathroom or renovate a basement.”

    How this affects you: You could wind up loving your home but hating your neighborhood.

    What to do instead: Ask your real estate agent to help you track down neighborhood crime stats and school ratings. Measure the drive from the neighborhood to your job to gauge commuting time and proximity to public transportation. Visit the neighborhood at different times to get a sense of traffic, neighbor interactions and the overall vibe to see if it’s an area that appeals to you.

    8. Making decisions based on emotion

    Buying a house is a major life milestone. It’s a place where you’ll make memories, create a space that’s truly yours, and put down roots. It’s easy to get too attached and make emotional decisions, so remember that you’re also making one of the largest investments of your life, says Ralph DiBugnara, president of Home Qualified in New York City.

    “With this being a strong seller’s market, a lot of first-time buyers are bidding over what they are comfortable with because it is taking them longer than usual to find homes,” DiBugnara says.

    How this affects you: Emotional decisions could lead to overpaying for a home and stretching your budget beyond your means.

    What to do instead: “Have a budget and stick to it,” DiBugnara says. “Don’t become emotionally attached to a home that is not yours.”

    9. Assuming you need a 20 percent down payment

    The long-held belief that you must put 20 percent down payment is a myth. While a 20 percent down payment does help you avoid paying private mortgage insurance, many buyers today don’t want (or can’t) put down that much money. In fact, the median down payment on a home is 13 percent, according to the National Association of Realtors.

    How this affects you: Delaying your home purchase to save up 20 percent could take years, and you could limit cash flow that could be put to better use maximizing your retirement savings, adding to your emergency fund or paying down high-interest debt.

    What to do instead: Consider other mortgage options. You can put as little as 3 percent down for a conventional mortgage (note: you’ll pay mortgage insurance). Some government-insured loans require 3.5 percent down or zero down, in some cases. Plus, check with your local or state housing programs to see if you qualify for housing assistance programs designed for first-time buyers.

    10. Waiting for the ‘unicorn’

    Unicorns do not exist in real estate, and finding the perfect property is like finding a needle in a haystack. Looking for perfection can narrow your choices too much, and you might pass over solid contenders in the hopes that something better will come along. But this type of thinking can sabotage your search, says James D’Astice, a real estate agent with Compass in Chicago.

    How this affects you: Looking for perfection might limit your real estate search or lead to you overpaying for a home. It can also take longer to find a home.

    What to do instead: Keep an open mind about what’s on the market and be willing to put in some sweat equity, DiBugnara says. Some loan programs let you roll the cost of repairs into your mortgage, too, he adds.

    11. Overlooking FHA, VA and USDA loans

    First-time buyers might be cash-strapped in this environment of rising home prices. And if you have little saved for a down payment or your credit isn’t stellar, you might have a hard time qualifying for a conventional loan.

    How this affects you: You might assume you have no financing options and delay your home search.

    What to do instead: Look into one of the three government-insured loan programs backed by the Federal Housing Administration (FHA loans), U.S. Department of Veterans Affairs (VA loans) and U.S Department of Agriculture (USDA loans). Here’s a brief overview of each:

    FHA loans require just 3.5 percent down with a minimum 580 credit score. FHA loans can fill the gap for borrowers who don’t have top-notch credit or little money saved up. The major drawback to these loans, though, is mandatory mortgage insurance, paid both annually and upfront at closing.

    VA loans are backed by the VA for eligible active-duty and veteran military service members and their spouses. These loans don’t require a down payment, but some borrowers may pay a funding fee. VA loans are offered through private lenders, and come with a cap on lender fees to keep borrowing costs affordable.

    USDA loans help moderate- to low-income borrowers buy homes in rural areas. You must purchase a home in a USDA-eligible area and meet certain income limits to qualify. Some USDA loans do not require a down payment for eligible borrowers with low incomes.

    12. Miscalculating the hidden costs of homeownership

    If you had sticker shock from seeing your new monthly principal and interest payment, wait until you add up the other costs of owning a home. As a new homeowner, you’ll pay for property taxes, mortgage insurance, homeowners insurance, hazard insurance, repairs, maintenance and utilities, to name a few.

    How this affects you: Bankrate.com survey found that the average homeowner pays $2,000 annually on maintenance services. Not having enough cushion in your monthly budget — or a healthy rainy day fund — can quickly put you in the red if you’re not prepared.

    What to do instead: Your agent or lender can help you crunch numbers on taxes, mortgage insurance and utility bills. Shop around for insurance coverage to get compare quotes. Finally, aim to set aside at least 1 percent to 3 percent of the home’s purchase price annually for repairs and maintenance expenses.

    13. Not lining up gift money

    Many loan programs allow you to use a gift from a family, friend, employer or charity toward your down payment. Not sorting who will provide this money and when, though, can throw a wrench into a loan approval.

    How this affects you: “The time to confirm that the Bank of Mom and Dad is ready, willing and able to provide you with help for your down payment is before you start home shopping,” says Dana Scanlon, a Realtor with Keller Williams Capital Properties in Bethesda, Maryland. “If a buyer ratifies a contract to purchase a home with an understanding that they will be getting gift money, and the gift money fails to materialize, they can lose their earnest money deposit.”

    What to do instead: Have a frank discussion with anyone who offers money as a gift toward your down payment about how much they are offering and when you’ll receive the money. Make a copy of the check or electronic transfer showing how and when the money traded hands from the gift donor to you. Lenders will verify this through bank statements and a signed gift letter.

    14. Not negotiating a homebuyer rebate

    The concept of homebuyer rebates, also known as commission rebates, is an obscure one to most first-time buyers. This is a rebate of up to 1 percent of the home’s sales price, and it comes out of the buyer agent’s commission, says Ben Mizes, founder and CEO of Clever Real Estate based in St. Louis.

    How this affects you: Homebuyer rebates are available in most U.S. states, but not all. Ten states prohibit homebuyer rebates: Alaska, Alabama, Iowa, Kansas, Louisiana, Mississippi, Missouri, Oklahoma, Oregon and Tennessee.

    What to do instead: If you live in a state that allows homebuyer rebates, see if your agent is willing to provide this rebate at closing. On a $300,000 home purchase, this can be a $3,000 savings for you so it’s worth asking.

    Source: Deborah Kearns https://www.bankrate.com/real-estate/first-time-homebuyer-mistakes/

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