New Mortgage Rules Loom

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Lawmakers

The recent housing slump has prompted many lawmakers to call for a restructuring of the housing market, which could make it harder for Americans to qualify and pay for home mortgages. The latest suggestion that appears to be gaining bipartisan support in Congress would require a minimum 10-20 percent down payment for most home loans, with both critics and supporters of the measure saying that it would represent a major change to “business as usual” in the housing industry.

Edward Pinto, a fellow with the American Enterprise Institute who thinks a 10 percent down payment is fair, explained to National Public Radio, “We put too many people into houses they weren’t qualified to buy, they didn’t have income [and] they didn’t have skin in the game. And if people know they need the down payments, they’ll start saving for them. You can’t just buy lattes if you need to be saving for down payments.”

Other economists and housing advocates oppose down payment rules because they believe it unfairly and negatively affects minorities and others with economic disadvantages. Mike Calhoun, the president of the nonprofit Center for Responsible Lending, calculates it would take an average person seven years to save up for a 10 percent down payment. Plus, he says, the real issue is not the down payment.

Calhoun asserts the housing bubble and subsequent foreclosure mess happened primarily because lenders gave out no-document loans, in which they failed to verify if a homebuyer made enough money to pay back the loan. “The taxpayers got stuck with a big bailout, and so people sort of want to throw the baby out with the bath water and say, Let’s never do anything like that again,” he told NPR.

The other major change being discussed is the demise of the traditional 30 year loan. Instead, some interested parties are suggesting that banks and borrowers should opt for shorter-term loans, such as 15 or 20-year fixed-rate loans—a practice much more in keeping with the rest of the world.

While acknowledging such loans would require a higher monthly payment, Pinto suggests it could actually end up benefiting homeowners, because they amortize much faster than 30 year loans, meaning borrowers would gain equity much more quickly because they would begin reducing their principle balance much sooner into repayment.

So what does all this mean for those interested in purchasing a home right now? The bottom line: if you have been thinking of buying a home and don’t have the money for a large cash down payment, you may want to make your move before legislation changes the rules of the game. This may be the perfect time to check out properties offered in LGI Homes’ communities, where monthly payments start under $700, and no downpayment is required.

Evaluating Floor Plans: What Makes it Right for You?

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Evaluate Floor Plans

When you begin your search for a house in a new home community, you may be wondering how best to evaluate a floor plan that a builder offers. In many of its communities, LGI Homes offers a number of flexible and modern floor plans, sometimes as many as six—how do you choose which one is right for you?

One of your first considerations should be space. In particular, how many bedrooms are right for you and your household? In the master-planned community of Sterling Lakes, LGI Homes offers a range of home sizes, from 3 – 5 bedrooms. Our most popular layout, with three bedrooms, can be found in three of our five models. Beyond sleeping space, remember that bedrooms can also serve a variety of functions: office, playroom, hobby room or library. A bedroom is a place where respite of all forms takes place, so take your relaxation and lifestyle into account when counting up bedrooms, too!

Next, you will want to consider how the bedrooms are arranged. Separated sleeping areas are flexible and comfortable, maximizing the privacy of each bedroom. In our single-story residences such as the Blanco and the Sabine (offered in a number of different LGI Homes communities), a split layout keeps the Master Bedroom in the back of the home, and places the two accessory rooms towards the front of the house. In both of these floor plans, the Master Bedroom enjoys proximity to the fully-fenced backyard, and is situated away from the noise of the street.

In our two-story homes, such as the San Marcos at Deer Creek in Fort Worth, the sleeping quarters are comfortably removed from the daily living areas and are located upstairs from the family room, dining room and kitchen. Removing the sleeping areas to the upstairs of the house means that the privacy of the bedrooms never has to be impeded by the more public areas of the home.

In the course of choosing a floor plan, you’ll also want to consider the traffic patterns, or flow of the home. How does the layout work for you and your lifestyle? For instance, are you looking for a kitchen that opens into a family room, such as in the Blanco? This sort of layout is great for younger families, where activities such as homework or play can occur alongside with meal preparation. Or perhaps you are an inveterate entertainer. In that case, you may prefer a layout such as that of the Driftwood, in which the kitchen is more proximate to the dining room. Are you somewhere in-between? The Colorado, with its open access to both the dining and family room may be the perfect choice.

Whichever way your family likes to live, we here at LGI Homes have created modern, functional floor plans that are right for you, and that are available now in communities across Texas. To learn more about LGI Homes or any of our communities, visit our website at LGIHomes.com, or stop by any of our sales offices, which are open seven days a week to serve you.

Warren Buffett Bullish on Homeownership

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Homeownership

Even though the ongoing economic slowdown has made getting credit more difficult, Berkshire Hathaway CEO (and third richest man in the world) Warren Buffett says that this is the best time to invest in a house, because affordability has rarely been better.

In his most recent letter to Berkshire Hathaway’s shareholders, Buffett said that homeownership “makes sense for most Americans, particularly at today’s lower prices and bargain interest rates,” and went on to say “the third best investment I ever made was the purchase of my home.” (Numbers one and two on that investment list, for the record, were his marriages.)

Buffett, called the “Oracle of Omaha” because of his business and investment savvy, offers suggestions on how to best approach homeownership.

The first is to be practical. Don’t get your heart set on a dream house that ends up being more than you can afford. Instead, think in terms of buying a house that makes financial sense for your family’s future. Buffett warns: “A house can be a nightmare if the buyer’s eyes are bigger than his wallet and if a lender…facilitates his fantasy.” The lesson here is simple: only buy what you can afford right now.

The second suggestion Buffett offers is to buy for the long term. Despite being worth around $50 billion, Buffett still lives in the home he bought over half a century ago for just $31,500. Yes, Buffet is known for his frugal investment philosophies; but the point remains: don’t buy with an eye to turn around and sell in a few years. Choose and purchase a home that you could live in, and comfortably afford, for the rest of your life, if necessary.

Perhaps most importantly, Buffet is adamant about securing fixed mortgages with affordable payments. In his shareholder letter, Buffett notes that a housing company he owns has weathered the recent economic storm successfully because, “our approach was simply to get a meaningful down-payment and gear fixed monthly payments to a sensible percentage of income. If home buyers throughout the country had behaved like our buyers, America would not have had the crisis that it did… This policy kept us solvent, and also kept buyers in their homes.”

The rule of thumb is to get a fixed mortgage payment that’s no more than 30 percent of your take home income. Taxes and insurance should be included in that “under 30 percent” rule.

Like Buffet, LGI Homes believes in quality housing at affordable prices. With monthly payments starting at just $695, LGI Homes makes homeownership an attainable, and sensible, goal.

Grand Opening of Mallard Crossing

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Couple with keys for new house

LGI Homes is currently celebrating the Grand Opening of their sparkling new community Mallard Crossing. This brand-new LGI Homes community, located in northwest Houston, offers convenience, comfort and style, and its location can’t be beat; just minutes away from some of the area’s most outstanding dining, shopping and entertainment, Mallard Crossing is at the heart of the places where you love to be.

LGI Homes builds quality into every one of its homes. And the Mallard Crossing community was designed with added-value in mind, with beautiful and spacious floor plans ranging from three to five bedrooms. Prices range from the $100,000s to $140,000s, with the largest floor plan coming in at just over 2,500 sq ft.

Each LGI Home is designed with upgrades worth thousands of dollars such as custom-made cabinets, a new refrigerator, fenced backyards, landscaping and a home warranty. Every new home we build comes with raised six-panel doors, brushed nickel hardware and fixtures, rounded corners, and vaulted ceilings included in the sales price.

Why throw your money away on renting when you can buy your own dream home at Mallard Crossing, starting at just $679 a month? Call today and see where you could be living tomorrow: in the style and convenience of one of LGI Homes’ newest homes!

Take a second and check out a few of our other Houston new home communities including Creekside Village, Sunrise Meadow and Sterling Lakes.

Sterling Lakes a Master Planned Community

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Sterling Lakes

LGI Homes is always on the lookout for prime locations that will add value to a new housing community and improve the quality of life for our customers. When the chance came to build brand-new, affordable homes for first-time homebuyers in the master-planned community of Sterling Lakes, we jumped at the chance.

Conveniently located in South Houston off of SH288, Sterling Lakes meets both goals. Just 20 minutes from downtown, the community is close to the Texas Medical Center, NASA’s Johnson Space Center, the Houston Ship Channel, the Kemah Boardwalk and even Hobby Airport. Sterling Lakes includes homes constructed by a number of builders—one of which is LGI Homes—that are gathered together in a modern, convenient and amenity-rich guard-gated community.

Sterling Lakes is an ideal place for families, boasting a $2.5 million Recreation Center Complex that centers around SplashPad Texas. The water park and recreation area offer amenities that can keep every member of the family entertained, all year round. Sterling Lakes residents can lounge at the poolside cabana, hang out at the clubhouse, enjoy the playground, swim in the junior Olympic pool with play spray features, or explore the tike bike trails.

LGI Homes builds every home with the buyer in mind, and houses in Sterling Lakes come with thousands of dollars worth of upgrades such as a new refrigerator and other quality appliances, custom cabinets, a fully-fenced backyard, raised six-panel doors, brushed nickel hardware and fixtures, and vaulted ceilings. In this community LGI Homes is currently offering beautiful new three- to five-bedroom floor plans.

Call today and find out more about the spectacular offerings from LGI Homes in this community, with top quality for affordable prices, and monthly payments starting at just $679 per month.