5 Tips from New Home Builders When Purchasing a House

Shopping for a new home is exciting and overwhelming at the same time. Whether you’re in the market for new modern homes or one that was previously owned, it’s important to look past a curb appeal to avoid extra expenses and disappointments after you’ve unpacked.

The Aspects of Life to Analyze Before a Mortgage

Many people don’t have a simplified way of looking at their life as it relates to a mortgage. The enormity of the commitment is huge, and people need to properly assess certain aspects of their life. If you are a prospective home buyer, I’ve listed the areas of your situation that should be carefully looked at before signing on that dotted line with black ink.

Certificate of Eligibility

Certificate of Eligibility – To get a VA loan, the veteran must first obtain one of these documents from the Veterans Administration that proves the veteran is eligible fr a VA loan.

  • Example: If you are a veteran and want to purchase a home using a VA loan, the first step should be to get a certificate of eligibility which will show that you are qualified to purchase a home using a VA loan.

Errors and Omissions Insurance (E&O Insurance)

Errors and Omissions Insurance (E&O Insurance) – Insurance that protects a real estate broker or salesperson from mistakes, errors or omissions that may occur during a transaction.

Example: If a real estate broker mistakenly fails to disclose that a roof is leaking and the buyer brings a suit against the broker, the broker will be

Voluntary Lien

Voluntary Lien – A monetary encumbrance that a homeowner willingly places on their property.

  • Example: A mortgage or deed of trust is a voluntary lien.

Real Estate Investment Trust (REIT)

Real Estate Investment Trust (REIT) – A corporate entity that exists for the sole purpose of investing in real estate.

  • Example: REIT’s or Real Estate Investment Trusts can be privately or publicly held companies and they must distribute 90% of their taxable income to their investors. Therefore they are popular investment vehicles for investors who want to invest in real estate.


Commission – A fee earned by a broker, agent, facilitator or salesperson for facilitating a transaction.

  • Example: Real estate brokers are paid by commissions they earn when transactions close.

Convertible ARM

Convertible ARM – A mortgage that starts out as an adjustable rate mortgage but allows the borrower to convert it to a fixed rate loan for a specified period of time.

  • Example: A borrower who wants to take advantage of lower initial payments but still have the long term protection of a fixed rate loan can use a convertible ARM.

Chain of Title

Chain of Title – An analysis of the transfers of title to a piece of property over the years.

  • Example: When purchasing a property, a buyer should always check the chain of title to make sure the seller is who they say they are and that there are no unidentified liens against the property.


Assumption – When a new borrower takes over a loan from a previous borrower. This must be allowed by the lender in the loan documents.

  • Example: When a different borrower takes over a loan from the original borrower the process is called assumption.