VOL17 ISS2 2017

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THE ORIGINAL RELOCATION GUIDE — TRIANGLE NC | VOLUME 17 — ISSUE 2 80 BUILDING OR BUYING A HOME To Build or To Buy: some things to consider BY STUART JAMES Regardless of whether you decide to buy an existing home or to build a new one, there are a few steps that you must follow in the beginning. If you've started this evaluation process by answering the very first question affirmatively: 'Can I afford to buy or build a new home?' then it's time to proceed to the next step and perhaps the one we all least want to talk about: getting your finances in order. Your credit reports (or scores) are an ongoing, ever- changing organism. These reports are a look at how you manage your finances on a year-to-year, month- to-month, week-to-week basis. You must know exactly what your credit reports say about your financial history before you apply for a mortgage. Why? Because these reports play one of the most important roles in the mortgage approval process and in determining the interest rate and other loan terms that the lender will offer you. If you haven't looked at your credit reports recently, you might be surprised at their contents; errors are common. While researching this story, I found four different errors that needed to be corrected in just one of my scores. That's right I said "one" of my scores. Lending institutions usually consider the scores of three different major reporting companies when evaluating customers for loans. The big three currently are: Equifax, Experian, and TransUnion. A low score in any one of the three or a combination thereof can either cost you thousands of dollars in the long run or sometimes cost you the loan approval entirely. To learn more about credit reports, how credit scores are calculated, and how they affect what you'll pay for your new home, go to one of the governmental or independent internet sites such as: Next, get familiar with the mortgage industry. Finding the right loan and lender is crucial to a successful and less stressful home-buying or building process. It's up to you to determine which lender is best for your needs, and it's always a good idea to educate yourself about the loan process before you talk to a lender. For instance, are you eligible for a FHA loan, VA loan, HUD conforming or non-conforming loan? Find out what these terms mean and whether you meet their criteria. It's also recommended that you get at least one competing mortgage offer before making your final decision. More than two offers is even better. Getting a loan pre- approval will also save you thousands over the lifetime of the loan if you're willing to take the time to "shop" it around. After all, this will be the single largest purchase most families make in their lifetime. Now that you've checked into your credit history and are well-versed in how the mortgage industry works, it's time to set a spending budget/ceiling for the home of your dreams. Once your budget is set, you can start the "fun" part: picking out all the special things that will truly make it yours. From here on it may seem like a game of give and take but realize that everyone goes through the same process whether they're spending $100,000 or $1,000,000. Rarely does one house or house plan "have it all". If you want each of the kids to have their own room along with a large master suite, you may have to give up a little of the family space or that giant deck that wraps around the house. The professional kitchen may cost you the "state-of-the-art" media room, and so on, and so on. Just keep in mind compromise is not always a bad word. Building versus buying is a major dilemma in today's new home market. The freedom to make decisions about the details of your home and to 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 tires that are already inflated" before you sign on the dotted line. To further muddy the waters is the unbelievable number of underpriced foreclosure homes that have appeared on the market over the past few years. This may once again make buying even more attractive. Perhaps the single most enticing part of choosing to build your home as opposed to buying is the chance to employ green technology from the ground up. This practice of creating structures and using processes that >>

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