Update.. Week 21...

This is when the whole home buying process is getting to be interesting. After last weekend, where we saw the model homes in Ledgestone and got to know about the new incentives being offered by Pulte, I decided to call and try to negotiate some kind of a deal.

Th options I was considering was

• See if I can exchange my current purchase contract for the Jade model, to one of the bigger models in Legestone series.
• If the exchange is not possible, see if I can get some additional incentives for my current purchase.
  

So I contacted the sales office and gave them the options (more like requested to make a fair offer for me considering the incentives they are offering on newer models). I received an email reply from sales the very next day. They decided to provide me with additional incentives which included:

• Appliance upgrade, which included refrigerator, washer/dryer.
• Install blinds on all windows.
• Offered an additional 3% towards my closing costs (basically covered all my closing cost)

So all put, the new incentives added upto $10,000. Considering the current housing market, I believe the builders would probably do anything to retain customers and get units sold. Maybe I could have negotiated a bigger incentive, but given the situation, I felt the sales people tried and gave me a fair deal.

Now that the new incentives were negotiated, time to contact my loan officer again to update him on the changes. I was supposed to lock in my interest rate, but I decided to hold that until I got the incentives confirmed. I told him about the additional incentives, and asked him to send me the updated GFE (God Faith Estimate). Once everything looked good, I decided to lock in the rate at 6.875%. Now this week, I had also agreed to go with the latest loan option my loan officer had offered. I had mentioned in my earlier blog about how I was not happy with the PMI option being offered. So my loan officer shopped around for alternatives, and came up with a loan program which was a single 90% loan with no PMI. I just had to put the 10% down. The catch was that the interest rate was higher (6.875 instead of 6.5%) than the loan with PMI, but overall, it worked out cheaper in terms of monthly payment.

Now the only remaining task before going into the week before closing is to get the home insurance policy setup. I plan on doing it this coming monday.

Now for the pictures of this week.

Construction Update.. Week 20..

Construction is almost coming to an end. I am just few weeks away from closing. And this is the first weekend, I am free since my parents are here. So I decided to take them to my house and show them the unit and model houses.

I first showed them the models of the houses in my sub-division. They liked the houses, especially the Jade floorplan. Then I showed them my house, which was close to completion. Just the final QA walkthru is remaining.

After seeing my house and the models, we decided to go check out th bigger house models in the other sub-division (Ledgestone). The first was the "Crimson" model, and we were all floored by it.
Huge vaulted ceilings, good open design giving a feeling of spaciousness, and very good interior decoration immediately sold us the model. But it was out of my price range. But this was the weekend of "Monster Sale" at Pulte. They were offering huge incentives on these models which included

• $35,000 discount.
• All closing costs paid.
• All appliances (washer/dryer & fridge included) and blinds installed.
  
• And a 5.85% 30-year fixed loan with jut 5% down.

With these incentives, all of a sudden these bigger houses were within my reach. And what more, apart from the bigger square footage, they also have a big backyard. Big enough to put a pool. And afterter talking to the sale person, they had 2 spec units of the Crimson unit that we could move in within couple of months.

So now my option was to see if I could work out a deal where I can change my house from the smaller Jade models to the bigger Crimson one. But since I am just 3 weeks away from closing, I was not sure how viable that options is. But I still decided to give it a try.

So I called my realtor, and asked him to find out more details about the sale. And also fin out my options regarding switching from Jade to Crimson. So next week is going to be interesting, an I get to do some negotiating done.

Construction Update.. Week 19..

Changes this week.

1. The main change this week is the interior flooring. All the carpets have been laid. Great room, stairs, bedrooms, & closet.
2. The light bulbs have been installed.
3. Bathroom fixtures have been installed.

Next week, they plan on turning on the electricity and powering on the house. the A/C will also be turned on to make sure everything works.

Other than that the news has been on the loan. I had initially planned to go with 10% down, and finance the house by getting a 80% first mortgage and 10% second mortgage. But due to the recent financial market crisis, the market for 2nd mortgage have almost dried up. So my loan offices @ Pulte mortgage says the only option available is to get a single mortgage for 90%, and a PMI (Private Mortgage Insurance). The PMI is basically an insurance for the lender that I pay so in case I foreclose on the loan, then the lender gets paid anyways.

Now I am not a big fan of the PMI due to the following reasons.

1. PMI payments do not go towards paying off my loan. hence I never build equity from these payments. It is just an insurance payment.
2. PMI payments are not tax deductible. Recent legislation have made PMI payments tax deductible, but this is just for the year 2007, and I am not sure whether the bill will be extended forward, or whether the tax deduction will carry forward in the coming y ears if I get the loan in 2007.
3. By law, I have to continue making PMI payments until I have built a 22% equity value in the house. Now in a strong housing market, PMI is probably a boon, since the house price appreciates, and you might have the required equity level in as little as 1 year. But in the current market, where the housing prices are coming down, I might end up paying the PMI for ever.

In any case, i have talked to my loan officer to find out whether there are any other alternatives to PMI. He said he will try to find out whether he can find any deals from their in house warehouse lenders. So lets see how that goes. I have to get the loan details worked out and the rate fixed soon as the closing is just few weeks away now.

Construction Update.. Week 18..

Changes for this week..

1. On the outside, some landscaping has been done. Small trees and desert landscape has been planted.
2. On the inside, the biggest change this week is all the lighting fixtures. Most of the rooms (sans couple of bathrooms) have lighting fixtures.