New homes are they the best kept secret?

FREE, the one word that most can't ignore. If you want more free when buying your next home be sure and continue reading this.

Like any business new home builders want to finish the year strong. This is why Nov-Dec may be the best time to purchase a new home. They have inventory that they need to move and they are offering lots of incentives to get it done. I recently helped a client purchase a new home that was already built in the subdivision. I was able to save her 10% on the asking price and we got her all upgraded appliances included with the purchase. I am going to list three aspects of getting a deal on a new home that you should consider. On a side note many of these concepts apply to any sales related business, i.e. car dealerships and the like.


Why does the 4th quarter matter? 

It is simple really, the builders have inventory that they will have to pay taxes on if they don't sell it. This means you are likely to get the best deal on a new at the end of the year. The market slowed down because people aren't looking to move over the holidays and the builders understandably don't want to pay taxes on inventory. You can get many incentives like large reductions in price, all closing cost paid or all appliances thrown in.

The inventory-

The only catch is that in most cases you have to purchase existing homes to get these great incentives. They need to move the properties they have already built so if you are looking to build a new custom home then you may be out of luck on getting the incentives. Assuming you are ok with an existing home then you can purchase and be in your new home by Christmas.

The Alternative-

If you are thinking about buying a new home but are not quiet ready to purchase yet you may still have options. Find out when the builders quarter ends and go in to purchase towards the end of the quarter. These builders are in business to make money and to make money they have to show a profit, sold homes = a profit in most cases. That being said they will typically be more motivated to move inventory at the end of any of the first three quarters, but they will be the most motivated to move inventory at during the fourth quarter.


You don't want to go it alone so get a REALTOR!

Many people wander into new home builders quiet by accident sometimes but when you are purchasing a home you want someone to watch you back. The sales agents at the builders subdivision is just that an agent for the Subdivision. He works for the subdivision and therefore is not going to have your best interest in mind. A realtor is dedicated to you and bound to do what is in your best interest so who do you want negotiating your next purchase?

Using a Texas Vet loan to buy a San Antonio house?

A home purchase is likely the biggest transaction you will ever make and picking the wrong lender can cost you big. If you are a Texas Veteran you are most likely eligible for a Texas Vet loan. A Texas Vet loan is a great option because the interest rate is not contingent on your credit score and you still get all the benefits of a traditional VA loan. If you are VA Eligible that you should strongly consider using Texas Vet loan to buy a San Antonio House. If you Qualify for a VA Loan and are a Texas Vet than you will almost certainly be eligible for a Texas Vet loan. Qualifying is easy, you can qualify with a short period of active duty or with six years of reserve duty. 

 

 

Not all loans are created equally, know what your VA financing options are before you commit.

 

I personally used a Tex Vet loan to purchase our home and we got an interest rate a full 1% below what we could have gotten with a VA or Conventional loan. The great thing about using a Tex Vet loan is that you get the lowest possible interest rate regardless of your credit score. All you have to do is qualify and you automatically get the lowest possible rate. You will also avoid the mortgage insurance that comes with Conventional and FHA financing. If you are planning on using a VA loan but don't have 20% down and stellar credit score than you should strongly consider trying to get a Tex Vet loan. 

 

 

If you are thinking of using a VA loan you will hear the term funding fee thrown around. This is the fee that you pay to use a VA loan however it is typically waived if you have a disability rating from the VA. A Texas Vet Loan has a slightly higher funding fee than a traditional VA loan, but in many cases it is more than made up for by the reduction in the interest rate that you receive. 

 

I had a client that wanted to use a VA loan but she went with an online lender that is based out-of-state. The out-of-state lender while licensed to do business in Texas did not offer her the option of using a Texas Vet loan. They approved her for a traditional VA loan which had an interest rate 0.75% higher than what she could have gotten with a Tex Vet loan. This is not to say that all online lenders are not going to offer state specific loans but this is where it pays to know your stuff. At the end of the day you and your real estate agent need to advocate for your interest. With Internet-based lenders you will never meet in person and most of your communication will likely be electronic. There is no personal touch with this, for me when I am making the biggest purchase of my life I want to be able to do business face to face. 

 

 

Whatever your communication preference whether face to face or electronic it pays to fact check what your’e being told. Know your options before you make a decision, at the very least if you do go with an online lender sit down with someone local and get a second opinion. It is not going to cost you anything and it could potentially save you big money in the long run. 

Hope, a simple word but one which carries with it the very fabric of existence. The effects of hope are undeniable and should not be underestimated. 

I am going to tell you why I believe hope is the most important motivator that exists. There are not many things that can break a person as quickly as a lack of hope can. This is true of any situation that you want to apply it to: goals, lifestyle, freedom, marriage, finances or even a shipwrecked victim. I will tell you how to keep hope alive or reignite it if it has gone out. 

To begin with let us define hope. 

• Hope is defined as-a feeling of expectation and desire for a certain thing to happen. That is generally true but I believe hope is that unseen force that keeps us moving forward and gets us out of bed every day. Deeper than that is the fact that will power is a finite thing. We only have so much will power to go around beyond that we need something more to pull us through the hard times.

Take goals for example

• Any goal is really fine, the specific goal doesn’t really matter because the underlying concept is the same. Any goal you set has a largely psychological side to it. It is not something tangible that you can touch or feel. Despite this it is always in the back of your mind (literally) telling you you're going to succeed or fail.

•  Dave Ramsey (a well know financial coach) advocates paying your debts off from smallest to largest. This may seem counter intuitive because it would seem to make sense to pay the highest interest debt off first. Paying off your smallest debt gives you a feeling of hope in the form of progress. If you don't feel like you're making progress that will power is going to fade and you're going to lose hope. No hope means what's the point of continuing to try? 

POW and Shipwrecked victims know it well

• These are both classic example that many have probably read in a book or seen in a movie. Take a shipwrecked victim on a deserted island or a prisoner in a foreign land for example. Both are in some of the most extreme circumstances you could imagine. What keeps a person going in a situation where they are in extreme or complete solitude? If you said HOPE then gold star for you. Hope can take many different forms, for a prisoner it may take the form of hope that he will be rescued or hope that he will see his family again. Hope will look different for different people but without it most will fail.

Don't let hope die

So all this to say that you need to keep hope alive. If you are lacking hope then try re-evaluating your goals. Set smaller more achievable goals or set daily, weekly and monthly goals. You don’t need to focus on the final or end result, if you are struggling just focus on today or tomorrow. Focusing on a goal that's to big can seem unachievable and cause you to lose hope of ever reaching it. Celebrate your success, don’t wait till you reach your final goal to celebrate. You need to keep hope alive and celebrate the weekly or monthly successes.  

Dont be house poor, three things to consider before you buy

You may or may not have heard of the term house poor, not to be confused with the poor house. It has a meaning just as it sounds, having a house that is making you poor. Along with your mortgage payment you should consider how, taxes, utilities and Home Owner Associations as well when looking for a home. Don't roll the dice on your future, have a plan.

Firstly you want to consider taxes, because unlike your mortgage payment interest rate taxes don't remain fixed. 

• For example, if you live in a big city like San Antonio, Texas that is rapidly growing then you have likely noticed home prices climbing. While on the surface this may seem like a good thing, along with the climbing home prices are climbing property values. 
• Why does this matter you might be thinking, it is an important factor to keep in mind because as your property value goes up so does your property taxes. In San Antonio, Texas taxes increase by as much as $200 a month in a single tax year for a average priced house. This means that your formerly affordable payment is no longer so affordable. 

The next thing to consider is the price of utilities and any extras that may be involved. For example does the home have a pool, hot tub or water softener? 

• If so what are your cost going to be to maintain said equipment. If it is a pool, you will have to pay to have it cleaned, there will be equipment repairs and the extra electricity usage for the pumps and equipment. 
• The average cost of owning a pool is $256 a month, this adds $256 to your monthly expenses. Water softeners will use electricity but more importantly many systems run on salt which has to be regularly replenished. There is also the consideration of whether the system is rented or owned. If it is rented then what is the cost associated with transferring ownership over. 

The final thing to consider also has the potential to cost you the most. Carefully consider the HOA (home owners association) before you sign on the dotted line. 

• While this may not seem like a significant deal but if you have a mandatory HOA then there can be significant expense associated in the form of dues. But beyond that the HOA has the authority to enforce any and all the bylaws. This can cover anything from the height of your grass, to exterior paint color and even the breed of you dog. 
• Depending on the laws of your state many HOA's have the ability/authority to foreclose on your home or sue you for things like unpaid dues or fines. It can get extreme and sounds a bit crazy but I have seen it happen, people lose everything over a dispute with the HOA that they legal may not be able to win. 
• This being said your realtor should ensure that you get all the deed restrictions and information related to the HOA. Make sure that your realtor does a mandatory HOA addendum to protect you as the buyer. 

The biggest problem with money is...

How much do you value money over happiness? 

According to a pew research poll men are more likely than not to put earning over enjoyment when it comes to work. Why is it that men put money over enjoyment of their job? I want to examine a few questions below that I and I am sure some of you have struggled with.

How much is enough money to make me happy? 

• While the answer to this may vary from person to person it is probably along the lines of "enough so I don't have to worry about it". This is an understandable and reasonable response to the question but is it true? If you didn't have to worry about money would you really consider it enough. Maybe, maybe not, people tend to adapt to their circumstances whether they be good or bad. 

• If you had enough money that you didn't have to worry about it and could maintain your current lifestyle would you really be happy? I tend to think not, the fact that you didn't have to worry about money would satisfy until you tired of not working or got tired of your current lifestyle. 

Why we work...

• I believe that people work for a purpose, even if that purpose is not something that satisfies them. You are working because you love or enjoy what you do or you are working for the money. You really cant have it both way though. If you are working because you enjoy what you do then money is a bonus. If you are working for the money then you are not working because you enjoy what you do. Most people that take a job for money over enjoyment (which is most men) are doing it because they value money or something that money can bring more than they value job satisfaction. There is nothing wrong with this, I have had more jobs that I hated and did for the money than I did jobs that I enjoyed. 

Do you want something different

• I am a fan of changing things that I don’t like. I have had numerous different career paths since I was 18 and it took me a while to get it right. I knew I didn’t like a job so i went back to school to get a different specialty. I did this numerous times making progressively more with each job change. What I didn’t get with any of them was more job satisfaction. I had convinced myself that if I could make enough money than my job would be worth it.

•  I can say after 12 years of searching that this is not true. It is not an easy thing to take a job strictly because you love doing it. It may seem like a luxury that you can’t afford but I would challenge that you can’t afford not to. Money can’t buy happiness and when you spend 40 hours a week doing something you deserve to enjoy it.  

The How to 

• For me I had to reach a tipping point where I was going to make a change or likely be stuck where I was forever. There will never be a perfect point at which to do this and it will likely be very uncomfortable. But picture yourself at your job till you are in your 60's, does that really sound like a full life to you? If not then ask yourself one question, if I could do anything and money was not a factor what would I be doing? If you can honestly answer that question then you are likely well on your way to finding a job that you will enjoy going to every day till your in you 60’s and beyond . 

Do you hate budgeting or dieting more?

Debt is like that extra 10-15 lbs. of dead weight that you want to lose. Whether you have a lot or a little to lose you won't get there without a plan in place.

My wife and I started a low carb diet about a month ago. We have gotten great results from it in such a short time. While my wife didn't really need to lose any weight but she was doing it to support me (thanks babe you're the best). The point is that a budget is like a diet for your wallet it only works as long as you stick with it. So how do you keep the debt or weight out of the picture?

Stop dieting...

That is right I said stop dieting, diets only work as long as you stay on them. It is to easy to lose the weight and then gain it right back. You diet and lose the weight which is great but then what happens when you stop dieting and start eating without a plan? Unless you're a superhero (in which case you didn't need to diet in the first place) than the weight comes right back. This same concept applies to a budget. A budget is great for removing the fat (debt) from you financial life. But like a diet it only works as long as you do it. Stop the budget and start spending without a plan and the debt comes back. So what is the alternative? 

Make a lifestyle change...

As we discussed in the previous paragraph it is not enough to make a temporary change you need to make a lifestyle change. A lifestyle change is changing your way of living permanently. This is not to say that you can't use a diet (budget) to get where you want to go but you need to have plan in place to implement for when you get where you're going. My old drill instructor used to say that failing to plan is planning to fail. While I would never have admitted it at the time he was right. It is incredibly likely that if you do not have a plan in place you will slowly slip back to your old ways of doing things. If you were really ok with the way things were you wouldn’t have made a change in the first place. So why not make your hard work and sacrifice count for something by having a long term plan in place? 

The how (the way I did it anyway)…

Accountability is key, and will make the difference between success or failure. So find a person or people that have been where you want to be and ask for their advise. This is one of the simplest and surest ways you can get to where you want to go. There is no reason to reinvent the wheel or go at it blindly. It doesn’t even have to be a physical person, find an online community or website that has the plan in place for you. Wisdom comes with experience and most people are happy to share it with you if you will just ask.

Communication, money and the heartache that both can cause

The two biggest issues that can plague even the best marriages are communication and finances. I will cover three aspects of both that can save you endless trouble.

If you have ever heard of the book "men are from Mars women are from Venus" then you know that while the name sounds wacky there is a lot of truth in it. The fact that Men and women don't operate the same way goes without saying, but guys often wonder what makes women tick? While the answer to that is going to vary, it has been my experience that women thrive on stability. A lack of stability or a perceived lack of stability is going to be an issue in any marriage. 

Common Goal

• As Men it is our duty to be the provider for our families. If asked most men would say that being able to provide for their family is one of the single most important things they can do. That being said the needs of women for stability and the needs for the man to be able to provide are actually much more closely related than they might otherwise appear. This is a point I never understood until I got married and one that took many arguments to truly sink in. 

Communication is key

• I as the leader of my family was in control of the finances. I had things in control a majority of the time but I didn’t always keep my wife in the loop. We had large amounts of debt when we first got married and while we got by every month there were many fight over money. I did not take the time to explain our situation to my wife and involve her in the weekly and monthly budgets. It was not that I was trying to keep things from her I honestly didn’t think she cared and I didn't want to stress her out. My intentions, good as they were, completely backfired on me and left my wife feeling neglected and controlled. 

What is a budget if not a plan for your money? 

• I am a spender by nature and saving does not come easy to me. My idea of budgeting was spend money till it’s gone then go without till I got paid again. It was my responsibility as the leader to manage the budget. Unfortunately this was something that I never bothered to do when I was single so naturally it didn't happen easily when I got married. 

If you are single then start living on a budget now because the longer you wait the harder it will be. If you are married and don’t live on a budget then sit down with your wife and go over the budget together. Create a weekly or bi-weekly budget depending on how often you get paid and keep each other accountable. My wife and I have budget meeting every week to go over how we are doing and see where we stand. I manage the budget but by communicating with her she knows where we stand every week and can take solace in that fact.