When partnering with a lender for on a new community launch, what do you want to look for from that lender? What services, products and practices are important to look for from that lender to make your community successful?
We look for someone who can do the following:
1. Make themselves available to our buyers at times that are the most convenient to them
2. Provide financing at rates competitive in the marketplace
3. Are backed by a company that provides products that are competitive in the marketplace.
4. Can become an integral part of our sales team and assist them in making a new home purchase as easy as possible for our buyers.
GARDEN GROVE, CA, Feb 13 (Marketwire) -- Southern California townhouse shoppers are out of luck if they counted on buying a new residence at Brandywine Homes' Century Village. All 53 townhomes in the popular Garden Grove development have been sold. "Sixteen units are still under construction, but we've definitely sold out," said Dave Barisic, vice president of sales and marketing at Brandywine Homes, a pioneer of infill development in Southern California. Construction completion is expected in late March. The three-story townhomes, located in the civic center next to historic Main Street, have been selling at a rate of about four per month -- "a little faster than average -- more like pre-recession levels," Barisic said. Century Village was designed to appeal to both first-time and move-up homebuyers, with three distinct floor plans ranging from 1,705 square feet to approximately 2,000 square feet. Pricing started in the low $400,000s. Century Village townhomes' most popular features have been the three-car garages and ground-level bedroom options, and its overall smart design: the second floor is an open great room, ideal for family gatherings and entertaining, while the top floor is dedicated to bedrooms. "No parent wants to have his children's bedroom on another floor. We kept all the sleeping on one level, and the living area on another," Barisic said. All units have front porches or balconies. A community park with a large water feature, sitting area and green space is located just beyond the entrance. Award-winning schools, easy freeway access, and a well-established neighborhood have been big drawing cards. For more information, please visit www.livecenturyvillage.com. About Brandywine Homes Brandywine Homes is a residential homebuilder based in Irvine, Calif., that specializes in challenging infill development. Founded in 1994, the family-owned and operated company has built or developed almost 900 homes in 30 small- and mid-sized infill communities, revitalizing some of Southern California's oldest and most established neighborhoods. Brandywine builds homes that respect and complement the heritage, values and architectural integrity of existing neighborhoods and the people who live there -- making a positive contribution to the community. www.brandywine-homes.com
by: Scott Schang, FindMyWayHome.com
FHA recently announced 2 incredibly costly changes to mortgage insurance premiums (MIP) that will leave homebuyers scrambling for alternatives.
April 1st, 2013 FHA will increase it’s annual mortgage insurance premium another 10bps to 1.35% of the loan amount for buyers with less than a 5% down payment. The annual mortgage insurance premium is divided by 12 and added to your monthly mortgage payment. On a $417,000 loan amount, this is an increase of $34.75, or $417.00 a year. This may not sound like a lot if it wasn’t for the other announcement made by FHA.
Effective June 3rd, 2013 FHA will rescind the rule that mortgage insurance can be removed after 5 years and 78% loan to value. For borrowers with 10% down payment or greater, this monthly payment increase can be removed after 11 years, for borrowers with less than 10% down, the mortgage insurance premium will stay in place for the full term of the loan. If your intention is to keep your low FHA interest rate for the full 30 years, your total premiums will cost you $168,885!
Don’t have 20% down?
It is a common misunderstanding that conventional financing requires a 20% down payment. This is not completely true. What is true is that with 20% down on a conventional loan you can avoid mortgage insurance completely.
Conventional financing can be used with as little as a 3% down payment (compared to 3.5% with FHA) with Private Mortgage Insurance (PMI). Private mortgage insurance has recently loosened qualifying guidelines to match Fannie Mae DU approvals $417,000. Loan amounts above this may require additional qualifying criteria overlays from the mortgage insurance provider.
PMI offers several very flexible options that will save qualified homebuyers thousands, if not more, on premiums:
Borrower Paid Mortgage Insurance (BPMI)
BPMI offers highly competitive annual premium rates with no upfront mortgage insurance. FHA currently requires both annual and an upfront MIP of 1.75% of the loan amount! Using the example above of a $417,000 loan amount, this adds almost $7,300 to your financed loan amount. Standard coverage for BPMI will cost you about 1.06% (source www.radian.biz) of the loan amount compared to FHA’s 1.35%.
Split Premium (BPMI)
Split premium provides borrowers with a PMI structured very similar to FHA with an up front premium that can be financed into the loan amount, and a significantly reduced annual rate that is paid monthly as part of your mortgage payment.
Single Premium (BPMI)
Single premium is a one time PMI premium that can be paid at closing that will leave a borrower with no monthly increase in your mortgage payment. Home buyers that are receiving seller credits, lender credits or using down payment assistance programs can use that to “buy out” your mortgage insurance completely.
Lender Paid Mortgage Insurance (LPMI)
Lender paid is exactly what it infers, the lender covers the cost of the mortgage insurance by offering you a slightly higher interest rate. This is a great option for borrowers that don’t mind paying a little bit more over a longer period of time. While it sounds attractive to not have mortgage insurance, this option also means that you will pay significantly more over the life of the loan if you do not refinance or sell.
The Fannie Mae MyCommunityMortgage offers reduced mortgage insurance for home buyers whose income does not exceed 140% of the area median income. In addition to offering a PMI option that is less than half of FHA’s MIP rate, this program also offers reduced closing costs to those that qualify.
Speak to your lender about what PMI programs you might qualify for. There may be debt to income and credit score restrictions on some programs. There may also be alternative programs offered by different PMI providers. Do you homework, and ask your lender which options might be available to you.
By Dave Barisic
Vice President – Brandywine Homes
Targeting a specific market is certainly not a new idea. It has been one of the most important premises of the advertising industry since its inception. During times of robust economic growth and low unemployment, however, the concept often gets pushed aside as product tends to sell regardless of how it is marketed. This trend is nowhere more obvious than in the development and sales of new homes.
During the mid 2000s, builders could often sell just about anything that built, regardless of insufficient marketing or imperfect design. Demand for housing, both real and speculative, was the driver. As the market for new housing has shifted over the past five years, so has the need for an in-depth, targeted approach to both marketing and designing new homes.
Starting with design, we now need to know who will be purchasing our houses before we even begin contemplating what the floor plan will look like. This is where demographics come in. By studying the environment of a potential product area such as income level, schools, existing housing stock and ethnic makeup, we can get a fairly good idea of not only who would buy a home in that area, but also how big the home will need to be, what amenities it will need to have, and what price point it will need to be at in order to sell.
Next, we need to inform this population that our homes are available and that although times may be tough, this is still historically one of the best times to invest in a home. This is where things have changed the most over the last few years. As the economy has sagged, margins have shrunk and dollars available for marketing have diminished greatly. Therefore, pinpointing your homebuyer profile with targeted advertising with a precise message is a necessity. Depending on the profile, this may be accomplished with a closely monitored email blast campaign detailing low interest rates or monthly payments. It could take the form of print advertising in a local ethnic newspaper, or even a partnership with the human resources department of the area’s largest employer.
The point is that the days of building a cookie cutter home, advertising in the local newspaper and watching the buyers flock in are now over. Builders need to get more diligent in their market research, smarter in their design, and more creative in their marketing if they are going to succeed in this challenging market.
About the Blogger
David Barisic has been Vice President of Sales and Marketing at Brandywine Homes since 2001. During his tenure, he has overseen the sale of homes in 25 communities across southern California and driven revenues of approximately $360 million. Brandywine Homes is a residential homebuilder based in Irvine, Calif., that specializes in challenging infill development. www.brandywinedev.com
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