For many home-buyers, a new property is an exciting way of going into a new home. There has been a tremendous increase in first-time homebuyers who started with new construction homes. Because of this, you may not be sure of what to do while the home is being built. Here are 5 steps you need to take during construction:
1) - Call homeowner's insurance companies. You have the extra time, so shop around for your homeowner's insurance. I'm in Texas and that is especially good advice here. Many companies got out of the homeowner's insurance business 4-6 years ago during the "black mold" scare and are recently adding new and improved policies. Call around to more than one company and make sure you know the size of the home, number of fireplaces, how much of your home will have carpet vs. tile, and if you will have a security system.
2) - Call your mortgage loan officer weekly. If you are making a 10% or greater down-payment then perhaps every other week is appropriate. If not, and especially if you are doing 100% financing, call your loan officer every week. Why? Loan programs are changing very rapidly right now. If your loan officer is a broker who is placing your loan with a mortgage lender you want to make sure that the loan is still available. When lenders change their guidelines it can happen suddenly. When you talk to your loan officer, ask what interest rates are doing, ask what conditions remain on your loan, and ask if there is anything you can help the loan officer get to further your approval with the undewriter.
3) - Schedule a visit with the builder weekly. Due to liability issues, most home builders will not allow you to show up on the worksite unescorted and without protective headgear. Many people may break this rule, but understand that you have liability if something breaks while you are there. A homebuilder friend of mine told me of a client who came to look at the house and broke the stair-rail which was not fully set. They charged the home-buyer the cost of the repair because he shouldn't have been in the home unescorted at that time. So weekly, have your builder or sales person walk you through the home. Look at EVERYTHING. It is appropriate for you to have lots of questions and ask them until you understand the answer. Consider bringing someone with you who is knowledgable in construction. By showing an active and on-going interest in the home's construction you can catch issues early, you can make changes (for a fee) if you see something that isn't exactly how you want it, and you can enjoy the PROCESS of this home you will someday move into.
4) - Hire a home inspector. You should do this before the foundation is poured. If you didn't, then hire one right now before the sheetrock is up. Too late for that? Hire one anyway. If you hire a property inspector early on, they will make sure the work was done correctly BEFORE the foundation is poursed, BEFORE the sheetrock goes on the wall, BEFORE the final city inspection is done, and BEFORE you close on the home. You may think the city inspector will take care of these things for you, but that is often not true. City inspectors vary tremendously from city to city and you have no recourse if they don't do a thorough job. Hire someone who sees you as their client to look for the things that need to be corrected, changed, etc. If nothing else, you will get a lot of piece of mind from knowing things were built well.
5) - Meet the future neighbors. Why not? You are going to live next to these people for years. Now is the time to find out if you can't stand them. Knock on doors and introduce yourself, if you find out the person next door is someone completely freaky you can still get out of this home. After closing....it's too late.
Lastly, remember to enjoy the process and not be too stressed out by it. Keep in mind that if you built a pre-existing home it has many of the same flaws but you just can't seem them because the roof, brick and sheetrock is already there.
©2007 Ken Stampe
Ken Stampe is a Mortgage Loan Originator, Mortgage Author and Mortgage Loan Officer Instructor living in Dallas, TX. Ken provided his first client a mortgage loan in 1996 and writes about home buying and mortgages to help clients make smart home mortgage loan decisions. Contact by email at Ken@KenStampe.com
What resource do SMART home buyers use?... Mortgage Calculator Bank.com
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