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Comparing Home Builders: Production or Custom?

Many buyers these days are turning to building new homes as opposed to existing ones. There are numerous advantages to doing so, including the fact that negotiations tend to go more smoothly since the builder doesn't have an emotional attachment, and the fact that you can upgrade and personalize to your heart's content. If you decide to build a new home, you've got a lot a decisions ahead of you, the first of which is this: Will you go with a production builder or custom builder? For some, the answer to this question is clear. But if you're on the fence or don't know the difference between the two, allow us to help. Take a look at our list of differences, pros, and cons below.

Production Builders

These are the home builders that are prevalent in new-home/master-planned communities. Examples of these builders in Charleston are Lennar, Beazer, Ryland, and David Weekley, among others. A main advantage of using a production builder is their purchasing power. Because they buy a large volume of materials and land, they get better deals, which they then pass on their buyers. According to the National Association of Home Builders, most production builders:

  • offer homes and land as a package
  • offer a range of plans to choose from
  • allow buyers to select their favorite style and design from a menu of details like elevation and upgrades
  • can usually deliver the same size of a home for less money
  • provide options for first-time buyers, those who are moving up, or even luxury buyers

In addition, when you go with a production builder, you have the option of buying a spec home (pre-built) or building from the ground up, giving you more control over what goes into the home.

Custom Builders 

When you choose to go with a custom builder, you choose to build completely from scratch. Most custom builders:

  • build on the land the buyer already owns, usually purchased separately
  • can build from a floorplan supplied by the buyer or can work with the buyer to create a customized plan
  • work closely with the buyer and allow them to make more decisions during construction
  • will include nearly any upgrades, additions, and details rather than presenting a set menu of choice

If your budget allows for it, going with a custom builder can be a great experience, especially if you're looking to build your dream home. You should expect to pay more for a custom-built home, but you also have a lot more control.

What are your experiences with homebuilding? Do you prefer custom builders or production builders? 

 

How-To Tuesday: Celebrate Earth Day!

This week, we're going to switch gears a bit for our how-to Tuesday post. Since today is Earth Day, we've rounded up a few ways that we can all celebrate our beautiful planet today and every day!

We'll start with the most obvious way to celebrate Earth. Plant a tree or start a garden. This is a great day to make a commitment to get your hands dirty, especially since Charleston weather outlook is so great this week. As more and more people join the movement toward buying and growing local, organic foods, there's never been a better time to start learning to provide for yourself. There's so much information out there on getting started. This doesn't have to be anything grand. Start with an herb garden. Grow a few tomatoes or cucumbers. Once you get the hang of it, you can move on and start a whole vegetable garden!

If gardening isn't your thing, think about switching to locally produced foods. There are plenty of opportunities to visit farmers markets throughout the week in the tri-county area and sample or buy produce and other products from local farms. Think about setting a day aside to visit a farm and learn all about where your food comes from. This is an excellent way to educated your family about nutrition and food origins.

Make a special Earth Day meal using those locally grown foods that have minimal impact on the environment. 

Commit to conserving energy. Think about this: do you really need to turn lights on during the day? If you have plenty of windows that let in natural light, try not to use overhead or lamp lighting during daylight hours. As always, be sure to turn off lights when you leave a room. Also consider switching to energy-conserving lightbulbs. Fix any leaky faucets and make sure the kiddos know that it's important to turn off faucets when not in active use.

Go on a nature walk or go camping. Stroll around the neighborhood or take advantage of the many parks, Lowcountry plantations, and beaches. Leave the iPod at home and just appreciate your surroundings. Think about bringing a bag to collect any trash you might see lying around. If you have kids, encourage them to bring a bucket or bag to collect interesting seashells, leaves, or rocks they can study later.

Have a clean-up day. This is the perfect opportunity to clean out those closets and cabinets you've been meaning to organize. Create a giveaway box for unwanted clothes and toys, and take it to your local Goodwill, Salvation Army, or other thrift store at the end of the day. Also think about taking a few moments to learn about natural cleaning solutions.

Recycle. Reduce. Reuse! Commit to recycling those cans, plastic bottles and jugs, paper, cardboard, clothing, and other reusable materials. Reuse them yourself, or check to see if when your local recycling pickup day is. You'll be amazed at how many trips out to the garbage can you'll save!

At the end of the day,  to help drive home the importance of conservation. For family story time, check out books like Dr. Seuss's The Lorax. For adults, try an inspiring classic like Thoreau's Walden.

These are just a few ways you can celebrate the Earth and learn about conservation today, but above all, let's make every day Earth Day!

 

What You Need to Know About the New Mortgage Credit Certificate Tax Incentive

There’s a new mortgage tax credit available for homebuyers in South Carolina, but surprisingly, not many buyers have taken advantage of it. News of the new Mortgage Credit Certificate (MCC) incentive has been slow to spread, with only eight people in the tri-county area and just forty-three statewide obtaining an MCC as of this March. The low number of takers probably has something to do with the fact that it wasn’t available in South Carolina until late last year.

The Mortgage Credit Certificate tax incentive is not a deduction, but a credit that lowers the amount of federal tax owed by up to $2,000 per year. Technically, the credit is intended for first-time homebuyers, but there is an exception. Most SC counties have the same qualifications, but less targeted areas, including Charleston and Greenville, have different rules.

What are the restrictions and qualifications of the Mortgage Credit Certificate?

Berkeley and Dorchester Counties:

Income limit of $74,640 for single person or couple

Income limit of $87,080 for a family of three

Must not own another principal residence at time of purchase

Charleston County:

Income limit of $62,200 for a single person or couple

Income limit of $71,530 for a family of three

Must not have owned another principal residence during the past three years

*Current homeowners in either county, or those are refinancing, will not qualify.

What’s the catch?

You might have to give some money back to the government if:

You sell the house after less than nine years, AND

Your income has increased to the point where you wouldn’t qualify for an MCC anymore, AND

You make a profit selling the house.

You’d still come out ahead, however, because the amount you would have to pay back is either 6.25% of the original loan amount, or half of the capital gain on the house, whichever is lower.

How do you obtain an MCC?

Meet the above qualifications based on county.

Secure a 30-year mortgage loan with a participating lender.

Pay a processing fee of $500-$700

You won’t have a hard time finding a lender who can help you land this tax credit. The list of preferred lenders includes banks such as SC Federal Credit Union, Wells Fargo, and The Bank of South Carolina; mortgage lenders like Starkey Mortgage and Movement Mortgage; and homebuilders’ mortgage departments like Pulte Mortgage and Ryland Mortgage.

For more thorough details and explanation, please visit www.SCHousing.com.

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How-To Tuesday: Repair Your Credit

Do the words "credit score" make you anxious? If the mere mention of it makes you shudder, you're not alone. Many Americans struggle with credit. Whether that's the result of having fallen on hard times, errors on a bank's or credit company's fault, or irresponsible spending, there is always help. While a bad credit report can be a stigma that leaves incredible weight on your shoulders, take comfort in the fact that credit repair doesn't have to be a difficult thing. Read on for our stress-free advice on how to fix your credit.

Understanding what affects your credit is the first step to repairing it. Below is a great chart from MyFico, outlining the breakdown of a FICO credit score for the general population, though the stated percentages can change depending upon your circumstances. Each of these categories are taken into consideration when it comes to determining a credit score. Note that details like marital status, race, age, employment, place of residence, interests rates, child/family support, and rental agreements, among others, do not affect your credit score at all.

                                            

Check for errors and dispute. The first action in our credit fix-it kit is requesting a free copy of your credit report. By law, each credit reporting company is required to provide a free credit report every 12 months. These can be found at www.annualcreditreport.com. Check your report for errors. They're more common than you might think! If you find any inconsistencies, disputing them is not difficult.

Break the late payment habit. Once you know the information in your credit report is accurate, it's time to tackle the problem areas. If late payments have become a problem, one of the best remedies is to set up regular reminders. Mark payment dates on a calendar; use a notifcation appon your phone; or ask your bank if they have a program that sends text or email reminders. If you want to make it really easy, consider enrolling in automatic payments.

Pay down your accounts... This is one of the most daunting parts of credit repair, but when it's done, you'll be amazed at the sense of relief it brings. First, stop using your credit cards for the time being. We know, we know. They're so convenient! It's so easy to buy now and pay later. But accumulating more debt will make things harder in the long run. Go through your credit report and make a list of your accounts, then gather your most recent statements for each one. To begin reducing your debt, try to pay your accounts down to 10% of the amount owed. This will be a great kickstart to your debt reduction campaign.

...then pay them off! Set up a payment plan, aiming to pay off the accounts with the highest interest first. Keep making minimum payments on your lower-interest accounts, and then contribute as much as you can each month to the higher-interest ones. Once you start to see the amounts owed dwindle, the weight they put on your shoulders will start to dwindle. 

See a credit counselor. If your credit problems stem from financial struggles, a consulting a credit counseling service can help you find solutions and learn how to manage your credit. 

Re-establish your credit history. It might seem counterintuitive, but opening new accounts responsibly and paying them off on time will raise your credit score. Someone who has credit cards and manages them responsibly will inevitably obtain a better credit score than someone without any credit cards at all. A caveat: keep balances low. 

Once you complete these steps, you will see your credit score begin to rise. It won't happen overnight, and it might take a lot of work as far as management goes, but it will happen eventually. Often times, repairing your credit is an excellent learning experience. Because who wants to go through that more than once? Be vigilant, be consistent, and check your credit report regularly for errors. In the end, you'll once again be able enjoy the benefits of good credit and the relief being debt-free brings.

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