I’m so excited that my loan is approved and I am moving forward! I take every opportunity I can to visit the community and explore all of the various amenities available to me now that I have an approved contract! I shot this quick video tour of the Paw (Dog) Park, the Community Garden, the River House Amenity Center and the Amphitheater. I also took a quick swing by my lot to see if anything was happening yet, but knowing I would still be in the permitting stage for the first 2-3 months. Thank you St. John’s County!! This is part of the reason why Leslee warned me early on that it takes about 8 months from Contract to Close.
Loan Approved!
As it turned out, my accountant had done a little too good a job limiting my taxable income on my last two tax returns, so they didn’t meet Mattamy Home Lending’s requirements. (Be careful with your write-off’s if you will be applying for a home loan in the next year! You may need to pay more taxes than you’d prefer!)
Although this appeared to be a hick-up at first, as I started looking at my options, I discovered that one of my favorite lenders, SWBC Mortgage, is a back-up preferred lender for Mattamy Homes, and my inability to qualify with their in-house lender allows me to use another preferred lender of my choice and still qualify for my incentive. In my case, what looked like a bad outcome actually will save me some fees in the long run! SWBC will base my final approval on one year’s tax return, and since I won’t close until next Spring, it can be my 2018 return. Hallelujah! Now all I need to do is sell enough houses by the end of the year and limit my expenses to show the required income on this year’s tax return.
Crisis averted—I’m Pre-Approved and able to move forward!!
Applying for Financing
As I do for all of my clients, I had already done cost sheets analyzing my estimated closing costs and explored the various options available to me to actually obtain the home of my dreams. I also explored the financing options with my trusted in-house mortgage professional, Teresa Sox with Prosperity Mortgage. Teresa provided me with ideas and options with various interest rates, even though she knew it would not result in an actual deal for her. This is because the builder’s incentives are always tied to the use of their own in-house mortgage lender. Teresa’s willingness to help me and my clients, regardless of whether she might profit is one of the reasons I love working where I work.
This step had me collecting information on all of my accounts and other assets and requesting a credit report. Because I had an investment property foreclosed back in 2010, I was very nervous about what it would say, but was thrilled that my credit, 8 years later, is completely repaired. FYI, if you’ve had a short sale or foreclosure over 7 years ago, it will no longer affect your credit. Having paid off all of my debts, including the loans on my car and my current home, I felt pretty good about what my debt/income ratio would be.
My first choice is to keep my current home as a rental property, with the anticipated rent covering most of the mortgage payment on my new home. Then once I retire, I will most likely sell my current home and pay off the mortgage on my new home in order to simplify my finances. My goal is to eventually be able to keep my expenses low enough that when I retire I can cover my basic living expenses with my retirement income. If there is a problem qualifying for the loan, I know I can always sell my current home, which I own free and clear, and pay cash for the new house. However, I know from experience with other clients, the timing on selling a home prior to purchasing another one is always challenging.
My Design Center Visit
Because I had already made many of my selections at my preview, my official visit to the Design Center was pretty stress-free. I was already aware of how disappointing most of the standard selections are, especially the cabinets and the flooring, so I was prepared for the costs related to upgrading both of these features and already had them in my contract. My design specialist, Debbie, walked me through each selection, starting with cabinets and moving on through the minute details of hardware and lighting.
In my case, I did not allow myself to be tempted by most of the available upgrades because my budget was so tight. I did allow myself a few extravagances such as the frameless shower stall upgrade and some accent tile, but for the most part, stayed pretty close to budget with only a $1,900 increase over my already written contract amount. And for the most part, I was able to include all of my wish-list that could not be changed or added at a later date. I escaped after only 2 hours (appointments can run as much as 4 hours), within $3,000 of my original budget.
Moving From an Idea to a Contract!
Pricing on a new build home is quite complicated, with several different layers to work your way through. You start by choosing your floor plan, which has several different base prices, depending on the elevation you choose. At RiverTown, each floor plan has 5 different style elevations, (Craftsman, Coastal, Farmhouse, Low Country, and Territorial Ranch, from highest to lowest cost) with base prices that can vary by as much as $12,000. In order to stay within my budget, I had to compromise on the elevation, choosing the least expensive style in order to save the dollars I needed for upgrades. Then of course, there is the site selection, which can add $10,000 to $20,000 in lot premiums to your base price. I was lucky enough to get the last $0 premium lot in Homestead II, which saved me a minimum of $10,000 that I could spend on my upgrades. The other thing to be aware of is that included upgrades vary depending on lot size. For instance, within Homestead I, lots vary from 45 and 50 foot wide lots where the base selections of plastic laminate countertops and white or black appliances are standard, to 55’ wide lots in Homestead II, where granite countertops and stainless steel appliances are included in the base price. This is how I was able to afford a 500+ s.f. larger house for only a few thousand dollars more.
My Site Agent, Leslee, walked me through the various Architectural Options and their costs—extended lanai, larger sliding glass doors, trey ceilings, and that sort of thing. The cost of these upgrades are added to the base contract amount by the site agent. Because I had taken the time to do a preview visit to the design center prior to sitting down to write my contract, I was able to include most of my additional design upgrade costs in my original contract. If you don’t do that, your base contract will be missing many of the heftiest costs and you should be prepared for your bottom line to increase significantly at the design center.
Leslie and I refined the costs to come to a bottom line (or close to it, pending a final visit to the design center), and submitted my offer to her Sales Manager, who it seems works pretty much 24/7! About an hour later we received her response, I countered, and before I knew it I had an accepted offer. From there we went through the entire contract and disclosures (prepare yourself, the paperwork I’m sure killed several whole trees). 5 hours later I walked out with a lovely file bearing my contract and a head full of ideas. Additionally, Leslee went ahead and submitted my application for access cards to all of the amenities, which my family and I will be able to enjoy throughout the 8-month construction period. I was so excited, I signed up for ballroom dancing lessons at the RiverHouse Dance Studio the very next day!
