LUIGART MAKERS SPACES
If you are interested in buying one of our houses, you should start by thinking about financing your purchase - this traditionally happens through a mortgage. A mortgage is essentially a large loan - your lender provides cash (which you use to purchase your house), and you agree to pay them back over time, with interest. In addition to the loan, you will also put a cash downpayment on the house. Most lenders require a 20% downpayment on your house, although depending on your lender and your income, you can put down less then 20%. The larger the downpayment, the lower the loan amount, and the lower your monthly mortgage payment. Qualifying for a traditional mortgage can be complicated, but hopefully this step-by-step guide will help make the process more clear.
STEP ONE - GET TO KNOW OUR HOUSES
Get to know our houses - If you’re interested in purchasing a house in the LuigART Makers Spaces, the first thing you need to do is figure out what type of house best fits your needs. Please contact us to see examples and details of the two archetypes we offer. We also offer both the option to design/build to suit, as well as to buy a design that we develop and build prior to identifying a specific buyer.
STEP TWO - KNOW YOUR RIGHTS
The government has many laws in place to protect new and prospective homeowners. Check out the US Department of Housing and Urban Development’s website for more information on Fair Housing, Real Estate Settlement Procedures Act, and Borrower’s Rights at HUD.gov.
STEP THREE - GATHER YOUR FINANCIAL DOCUMENTS
Now you need to start thinking about how you’re going to pay for your house. Lenders will want to see your financial documents to determine the conditions of your mortgage. So, start by gathering the following:
Social Security Card & Picture ID
Contact Information for past two years of employers
Past two months’ pay stubs
Income tax returns for last two years (W2s, 1099s)
Evidence of other income: child support payments, pension payments, government assistance, disability benefits, social security benefits, statements of stock dividends
Documents to show consistent payment of housing costs for the past two years
Most recent savings and checking account statements
Most recent brokerage statements showings stocks & bonds balances (if applicable)
Documents to show balances of any current debts (credit cards, student loans, car loans, etc.)
Letter of explanation for any negative credit items or gaps in unemployment (if applicable)
Any other pertinent financial documents
To purchase your house, you’ll also need to save up some money. It’s a pretty safe bet that to qualify for traditional loans, you’ll need to make a downpayment of around 20%. If you can’t make a downpayment that large, some of our lending partners have programs that can help. If this is the case, let us know, and we can help connect you to the programs that will best fit your financial needs. In addition to the downpayment, you’ll need to save money for other costs, including inspection, legal fees, closing costs, etc. Again, if this is too much for you, don’t worry, we have partner organizations that can help you navigate the process.
STEP FOUR - GET PRE-APPROVED
Now that you’ve taken a good, long look at your finances, it’s time to get pre-approved for a loan. Our preferred lending partner is Community Ventures Corporation, located just blocks away on Broadway Ave. However, most banks and financial institutions have mortgage programs that you can take advantage of. If you are interested in working with a different financial partner, we would be happy to work with you to figure out what best fits your needs.
STEP FIVE - SELECT A HOUSE & GET A LOAN
Once you are pre-approved, you’ll know the price range that you can afford. Now it’s time to get back in touch with us, so we can start working with you to figure out what house best suits your needs and what you can afford. It’s our mission to help pair you with the best fit possible. When we’ve figured out which house works, it’s time to go back to your lending partner and start the loan process. This will differ from lender to lender, and they will help you through the process.
STEP SIX - GET THE HOUSE INSPECTED
While we take extreme pride in the quality of the houses we build, as a homebuyer, it is your right (and duty) to get your prospective house inspected for any unforeseen issues that might pop up. A home inspection gives you an impartial, physical evaluation of the overall condition of the home and items that might need to be repaired or replaced. The inspection gives a detailed report on the condition of the structural components, exterior, roofing, plumbing, electrical, heating, insulation and ventilation, air conditioning, and interiors. Your lending partner will be able to help you find a credible inspector that can help protect you in the long run.
STEP SEVEN - SHOP FOR HOMEOWNER'S INSURANCE
You want to make sure that your investment is protected. You may be able to save hundreds of dollars a year on homeowners’ insurance just by taking a look at competing offers. We will help connect you with preferred insurance partners, or you can find your own.
You can also save money with these tips, courtesy of the US Government:
Consider a higher deductible. Increasing your deductible by just a few hundred dollars can make a big difference in your premium.
Ask your insurance agent about discounts. You may be able to get a lower premium if your home has safety features such as dead-bolt locks, smoke detectors, an alarm system, storm shutters or fire retardant roofing material. Persons over 55 years of age or long-term customers may also be offered discounts.
Insure your house NOT the land under it. After a disaster, the land is still there. If you don’t subtract the value of the land when deciding how much homeowner’s insurance to buy, you will pay more than you should.
Don’t wait till you have a loss to find out if you have the right type and amount of insurance.
Make certain you purchase enough coverage to replace what is insured. “Replacement” coverage gives you the money to rebuild your home and replace its contents. An “Actual Cash Value” policy is cheaper but pays only what your property is worth at the time of your loss, minus depreciation for age and wear.
Ask about special coverage you might need. You may have to pay extra for computers, cameras, jewelry, art, antiques, musical instruments, stamp collections, etc.
Flood and earthquake damage are not covered by a standard homeowners policy. The cost of a separate earthquake policy will depend on the likelihood of earthquakes in your area. Homeowners who live in areas prone to flooding should take advantage of the National Flood Insurance Program.
STEP EIGHT - CLOSING DAY
Once you have your loan, and the inspections are complete, closing day is the last step. We will arrange a date and time for you to come in to our office for the closing. Here’s who will be there:
- Your lender.
- Title company representative.
- Your attorney (if you have/use one)
- Closing agent: This person conducts the meeting and makes sure all documents are signed and fees and escrow payments paid.
During the closing meeting, we'll sign the documents transferring property ownership over to you. You'll receive and sign documents related to the mortgage agreement and ownership of the property, and pay any closing costs and escrow payments. These include:
- The HUD-1 settlement statement detailing all of the costs related to the home sale.
- Final Truth in Lending Act statement outlining the cost of the loan and annual percentage rate.
- Mortgage note stating the buyer’s promise to repay the loan.
- Mortgage or deed of trust securing the mortgage note.
STEP NINE - YOU'RE DONE!
How about that. You just bought a house! Get your keys and move on in.