(I shared more details prior to this post in a previous post)
Tomorrow morning at 9 am, my wife and I go to close on our new home. Just to make sure we come prepared, we called the builder today to find out what the specific amount of closing costs would be. To our surprise, I was told that the only thing we needed to bring with us is a picture ID, and in fact, we would be receiving money from them. That's right, we get money back. In a nutshell then, what has occurred is that my wife and I put $500 down on a $178,000 home which was built for us from the ground up, and when we sign the papers tomorrow to take the keys and move in, they are handing us back almost $300. No down payment, no closing costs out of pocket, and out a total of only $200 that we spent. Oh, and they gave us a 5.3% interest rate. America (and Centex), you totally rock.
You Can Do It Too!
Some of the details, in case anybody would like to duplicate what has been a very rewarding and satisfying home buyer's experience for my wife and I...
First of all, you really need to get yourself to Texas just as fast as you can (seriously), especially the San Antonio area. Real estate prices are some of the best (if not THE best) in the country, the winters are pretty mild, the people and culture are great, jobs are in decent supply, and the cost of living is quite tolerable. Secondly, find yourself the nearest Pulte or Centex subdivision where building is still going on and walk into the sales office. They'll take it from there. My wife and I, on a whim, stopped in on a Saturday and by end of day Sunday had all of our options and amenities picked out and our new home process had begun. Now a mere 5 months later, we're moving in to our brand new home.
A few fun facts
Incentives
Centex (and probably most home builders) will very often have a wide variety of incentives designed to, well, give you incentive to buy :) . They change all the time though, and from one weekend to the next may be completely different. Make sure when you walk in that you ask about available incentives, because depending on what's most important to you, certain ones may appeal more than others. For instance, my wife and I are looking at buying a new home almost exclusively as an investment of our money and resources. So, knowing that we are going to sell in 5 to 7 years from now, we wanted to include everything possible that will make the home stand out and be more appealing to potential buyers. Centex just happened to have (that particular weekend) three lots that had a $5,000 dollar upgrade incentive, meaning that if we chose to build on one of those, we could select up to $5,000 worth of upgrades without upping the purchase price! So, we added that fireplace, and we upgraded that AC unit, etc.. Make sure you ask about upcoming incentives, too. The sales people usually have heard what's coming down the pipe, so if a more appealing incentive will be in place next weekend, you may want to wait till then to make a decision on which lot to build on.
VA Benefit
If you've spent any time in the military, then you can use your VA home buyers benefit during the purchase. In a nutshell what this does for you is allow you to not have to put any money down towards the purchase. It doesn't necessarily mean there won't be any closing costs (money paid to the title company for doing their paperwork, etc.), but it does mean you won't have to come up with a giant chunk of cash if you don't want to. Oh, and it used to be that a VA benefit could only be used towards ONE home. Not anymore. Now they pro-rate it, and your certificate is worth a certain amount. I'm not sure what that amount is, I believe they said 300k. So, if I use it to buy a home worth 85K, I still have 215K worth of certificate left to use towards another home! That's exactly what we did, too. If you're young and reading this, you should seriously consider giving 4 years of your life to the guvment. You'll have a steady job for 4 years with all benefits and probably some travel, and when you get out you'll be able to pay for your education AND your first home. It's a pretty sweet deal.
HUD
If you don't have VA home buyer's benefits, you will also want to know this little tidbit: if you get financed through the HUD program, you will only be required to come up with 3% down payment, and NOT the 10% or more that we typically think we do. That's a HUGE difference, and it can make a purchase completely do-able when going through the builder for financing instead of an "on the street" lending institution. So, whereas that $180,000 dollar dream home may have been out of your range due to having to come up with $18,000 as a down payment, through HUD you'd only have to save up $5,400! Still a lot of money for someone on a budget, but MUCH more achievable!
Realtors
Another tip: use a realtor. Even when buying from a builder, you are still entitled to a realtor. Cool thing about that: the builder pays the realtor's fees, not you. Don't ask me why, I have no clue, but nothing comes out of your pocket to compensate the realtor. Their primary job in this is to just act as a second set of educated eyes and ears on your behalf, making sure nothing gets overlooked and that you understand the process as it happens.
Credit
Credit. Most of us really hate that subject, but unfortunately it's a fact of life we have to live with. The good news is that Centex/Pulte are not robots like so many other institutions, and will actually evaluate items on your credit report to determine their validity. For instance, I am still legally bound to the first home I bought over ten years ago which my ex spouse got in the divorce, so every time she makes a late payment, it shows up on my credit. All I had to do was provide proof that the home was no longer mine, and the Centex underwriter didn't count it against me.
A year and a half prior to beginning the home buying process, I did what has turned out to be a very wise thing, and invested $400 with a local credit repair company to get my report cleaned up. They were totally awesome and their work in combination with me being fiscally responsible for the past couple of years has resulted in a credit score in the low 700s! Something I have NEVER had in my whole life. You really do want to reap the rewards of decent credit, so I highly recommend finding and using a reputable credit repair company to give that process a boost...it has really paid off for me.
Conclusion
When I share my home buying experience with some people, I'm often amazed at how DISinterested they are. I think it has a lot to do with their age, as the younger among us (physically or mentally) tend to think of buying a home as the equivalent of taking a spouse: some kind of life long commitment that they just aren't ready to make. But au contraire, buying a home is nothing but an investment of your hard earned money, a place to put it where it can grow and become much more than it would sitting in a bank account. You have to pay to live somewhere, right? You might as well pay yourself! If you don't, you are without a doubt giving your money to someone else so that THEY can reap the rewards of YOUR money. Exactly...that makes zero sense except in only a few circumstances. Buying a house doesn't mean you HAVE to live in it, either. You can always rent it out, or sell it. Of course you can't force it to sell, so the possibility exists that you may be stuck making the payment when you really didn't want to, but if you're willing to at least commit to living in the same city for 5 to 7 years, you should put your money into your own home.
All in all, the experience of buying a home through Centex (now Pulte) has been absolutely incredible, and I couldn't have wished for it to have been more pleasant. They treat you truly like a valued customer every step of the way.
Post number 2 on this subject! "Post-Closing" :)
