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Electric Heat Pump Benefits

Electric Heat Pump Benefits

Heat pumps are pretty neat as they offer an alternative to running your air conditioner. If your home needs moderate heating or cooling a heat pump is a great alternative because it moves heat from a cool space to warm space, which makes the cool space cooler and the warm space warmer. During the heating season, heat pumps move heat from the cool outdoors into your warm house and during the cooling season, heat pumps move heat from your cool house into the warm outdoors. Because they move heat rather than generate heat, heat pumps can provide equivalent space conditioning at as little as one quarter of the cost of operating conventional heating or cooling appliances.

On average you save $1,000-$2,000 annually according to energy reports. On top of those savings heat pumps come equipped with filter systems so bacteria spores don’t have an opportunity to settle in your home. Heat pumps are extremely efficient in brand new constructions homes so definitely check out McKee Homes to find your next home with the electric heat pump already installed! To see this electric heat pump feature as well as read about all of our other energy-efficient features click here.

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5 Tips for Choosing the Best Mortgage for You

The type of mortgage you choose could save you thousands of dollars over the life of your mortgage. Take your time and make sure you have all the facts before making a final decision.

Download Your Home Loan Toolkit  for a free step-by-step guide with worksheets that help you work through each step in the process listed below and get the best mortgage for your situation.

  1. Define what affordable means to you
    A mortgage lending rule of thumb is that your total monthly home payment should be at or below 28% of your total monthly income before taxes. Lenders may approve you for more or for less depending on your overall financial picture, but how much are you comfortable paying each month for your total home loan? The total home loan cost includes the mortgage principal plus interest, mortgage insurance, property taxes, homeowners insurance, and any HOA or other neighborhood fees.  See pages 3-5 in Your Home Loan Toolkit (YHLT) for more information and worksheets.
  2. Understand your credit score
    Your credit, your credit scores, and how wisely you shop for a loan that best fits your needs have a significant impact on your mortgage interest rate and the fees you pay. To improve your credit and your chances of getting a better mortgage, get current on your payments and stay current. About 35% of your credit scores are based on whether or not you pay your bills on time. About 30% of your credit scores are based on how much debt you owe. That’s why you may want to consider paying down some of your debts. See page 6 in YHLT for more information.
  3. Pick the mortgage type that works best for you
    There are many different types of mortgages with the main differences being loan term, interest rate type, and loan type. Loan term indicates the length of the loan such as 30 years, 15 years or other. Interest rate type generally refers to either fixed-rate or adjustable-rate mortgages. Loan type includes categories such as conventional, FHA, VA, and USDA. Government programs often include low down payment or no down payment options. See page 7 in YHLT for more information.
  4. Understanding the difference between points and interest rate
    Points are a percentage of a loan amount. For example, when a loan officer talks about one point on a $100,000 loan, the loan officer is talking about one percent of the loan, which equals $1,000. Lenders offer different interest rates on loans with different points. There are three main choices you can make about points. You can decide you don’t want to pay or receive points at all. This is called a zero point loan. You can pay points at closing to receive a lower interest rate. Or you can choose to have points paid to you (also called lender credits) and use them to cover some of your closing costs. See page 9 in YHLT for more information.
  5. Choose your mortgage and avoid pitfalls
    Once you’ve done your homework and figured out how much total loan cost you can afford each month, reviewed your credit score and decided on the type of loan you want, it’s time to shop for a mortgage. This important step could save you thousands of dollars over the life of your mortgage. Take your time and make sure you have all the facts before signing any documents.

    • Make a list of several lenders you will start with
    • Get the facts from the lenders on your list
    • Compare Total Loan Costs

See pages 10-15 in YHLT for worksheets and more information on choosing the best mortgage for you as well as avoiding common pitfalls and handling any problems that should arise.

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5 Things To Do To Improve Your Credit Score Before Buying a New Home

The home buying process begins long before your start looking at new home listings online. One of the first steps in the home buying process is getting a handle on your finances and understanding your credit. Here are five things to do to improve your credit score before buying a new home.

5 Things to do to Improve Your Credit Score

  1. Know what’s on your credit report.
    When was the last time you checked your credit report? If it hasn’t been in the last year, then you could be missing something that could be hurting your credit score. Every year, you can get your credit report, for free, from TransUnion, Equifax and Experian by going to annualcreditreport.com. While this doesn’t provide you with your credit score, it does show you what the lenders see.
  1. Identify and fix any errors.
    Once you’ve reviewed your credit report with a fine-toothed comb, you need to start fixing any errors. On each of the credit bureau websites there are step-by-step instructions on how to dispute errors, and your credit report will have instructions as well. When contacting the credit bureaus, keep detailed notes on what you submit to them and copies of any documents.
  1. Always be on time.
    It may seem like commonsense but if you’re looking to increase your credit score pay your bills on time every month and don’t miss a payment. Paying more than the minimum balance, even if it’s just a little more, looks good to the lenders. It also helps you pay your bills off faster.
  1. Pay off your credit cards, but don’t close them.
    Paying off your credit cards is a great way to lower your debt-to-income (DTI) ratio. Every lender has different standards for DTI ratios, but according to Consumer Financial Protection Bureau, a DTI of 43% is, in many cases, the highest ratio a borrower can have and still qualify for a mortgage.
  1. Be smart with new and old lines of credit.
    If you are under contract to buy a new home, opening up new lines of credit or making any large charges on your current credit card can negatively alter your DTI. This makes you look risky to lenders. If you are building a new home, it can sometimes be a six-month or longer process, so be sure to plan ahead. It is recommended to wait until after closing to buy a new car, new furniture or book that all-inclusive vacation. If you have any thing that comes up before closing consult your lender. While not opening new lines of credit is important, keeping old lines of credit open is advised. These old lines of credit show your credit history and closing them could change your DTI for the worse.

Source: Forbes.com; HGTV.com

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Should A Veteran Always Use A VA Loan?

The VA loan program is a great benefit for veterans and with 21 million VA home loans it seems like a no-brainer that veterans would take advantage of this benefit. But should a veteran always use a VA loan? The answer is no, but let me explain.

There are many reasons to use the VA loan program. One of the biggest perks of this program is the no down payment. The VA does not issue the loans but they are guaranteed by the government which gives lenders confidence in issuing the loans.

  • You don’t have to have a down payment as long as your loan doesn’t exceed $417,000.
  • Lower closing costs as the VA restricts the types of closing costs a veteran can pay.
  • No monthly mortgage insurance premiums like you find with other loan programs.
  • VA loans also allow for those with higher debt ratios and lower credit scores to qualify for loans.

Now all this may make you wonder, well why wouldn’t I want to use a VA loan? Well there are a few things that may make you consider not using a VA loan.

  • If you’re buying a fixer-upper home, you won’t be able to use a VA loan as they are mainly for “move-in ready” homes.
  • While you can reuse a VA loan, you can’t get another VA loan before you pay the other one off.
  • If the home you’re buying isn’t going to be your primary residence then you’ll need to consider another loan program.
  • There is a limit on VA loan co-borrowers who are not a spouse or another veteran.
  • If you have a 20% or larger down payment it may be wise to consider not using a VA loan to avoid the VA funding fee.

So when you start your home search it would be a good idea to check into all of your home loan options. Knowing what’s available to you can save you time and money, and even if you are a veteran, you may not always want to use a VA loan.

Source: Marketwatch.com; VeteransUnited.com; Military.com

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The Difference Between Due Diligence and Earnest Money

What Is The Difference Between Due Diligence Money and Earnest Money?

If you are shopping for a home and are hearing terms you aren’t familiar with such as due diligence money and earnest money, you might be wondering what the difference between the two is, how they affect you, how much they will cost you, and if you can get your money back if the contract is cancelled. This article should help answer some of your questions starting with the difference between due diligence money and earnest money.

“Due Diligence” is the buyer’s opportunity to engage in a process of further investigation of the property and the transaction as described in the Offer to Purchase form within a period of time agreed to by the seller and buyer. The buyer will want to inquire about anything bearing on a decision to either move forward with the contract or to terminate it.  Some common considerations of the “Due Diligence” period are; home, pest, and septic inspections, property survey, appraisal, title search, loan qualification and application, repair negotiation, etc. The buyer has until 5:00 PM on the expiration date of the due diligence period to terminate the contract for any or no reason at all. The due diligence fee is Non-Refundable however, if the buyer terminates the contract during the due diligence period, the Earnest money deposit is refundable.

Deciding how much due diligence time is needed requires thinking about how long it will take to schedule appointments for inspectors to come out and inspect the home and how long it takes to review documents like the HOA rules and regulations. During the due diligence time the buyer is able to cancel the contract for any reason, or no reason at all.  Due diligence money is non-refundable The good news is the money is typically credited towards the purchase of the home at closing.

Earnest money is “good faith” money. The buyer is showing the seller they are serious about buying the home.  If the seller is unable to fulfill the contract the buyer will get the earnest money back.  If the buyer is unable to fulfill the contract the seller can keep the earnest money.  Earnest money is refundable if the contract is cancelled within the due diligence time period and is credited toward the purchase at closing if the sale goes through.

In general, there is no definite amount set for due diligence or earnest money.   The amount of earnest money paid could be a percentage of the purchase price but both the due diligence fee and earnest money deposit will be decided between the buyer and seller and written into the contract.

For more information, please visit http://www.ncrec.gov/Brochures/EarnestMoney.pdf
North Carolina Offer to Purchase and Contract, standard form 2-T Revised 1/2015

“Due Diligence” Questions and Answers

Contact us for more information about how much earnest money is required to start building a new home.