First-Time Buyer in Cloverleaf Subdivision

November 8, 2017

Cloverleaf Subdivision is a growing area for new buyers in Louisville, Kentucky

Cloverleaf Subdivision has another first-time homeowner today. Located on Cloverleaf Drive in the 40216 zip code is a cozy brick home with a full basement – and a very happy new owner. There are a few things that make the Cloverleaf neighborhood a great place for young people starting out. The proximity to the expressway, shopping and parks is really convenient. It is known for friendliness and the older generation that is just “neighborly”. Another attractive aspect is the low rental ratio. It translates into a neighborhood with a lot of pride in ownership on display. The neighborhood is split with about half inside the City of Shively and the other being a part of Louisville Metro.

Almost over before it started

Like a lot of first-time buyers, this one had a particularly challenging issue that was beyond his control. After successfully getting the home under contract the buyer called for insurance quotes and was met with some pretty outrageous numbers. For a 1000sf home in Cloverleaf, with a A++ buyer like this one with great financials and no claims, the expectation was for a premium of $800-$1000 per year. Instead, the buyer was informed his rates were $1500-$1800 per year. Every $120 more per year was increasing his monthly mortgage payment $10. While it was affordable on paper, it was making the buyer very uneasy about the entire deal. After numerous quotes and reconfiguring the deductible and coverage options, the buyer was able to get the annual premium down to $1200. Nationwide and Kentucky Farm Bureau were the two lowest quotes. In the process he learned that 30 is one of the magic numbers in homeowners insurance – when an individual turns 30, they usually see their premiums decrease substantially. The buyer moved forward knowing he can always get quotes along the way and switch whenever he gets the rate he wants.

Negotiating the repairs

The inspections revealed a few minor issues but the biggest concern was the roof that did not appear to have much life left. The Seller did not have the funds to replace the roof prior to closing, so after going back and forth with the Seller, the Buyer negotiated an amount that would be paid by the Seller at closing to the contractor of the Buyer’s choosing. It is not lawful in an FHA deal for the Seller to give funds directly to the Buyer so the check was made to the contractor to keep things legal.

Paying for it all

Josh Price of Envoy Mortgage was able to show how a first-time Buyer was able to utilize the KHC down payment assistance funds. Also known as DAP money, this is a second mortgage that allows a Buyer to borrow up to $6000 for the down payment and closing costs. The 2nd “baby loan” is paid back over 10 years with no prepayment penalty. That means when its paid off, the Buyer’s house payment will go down by about $65/mo without having to refinance the mortgage. Both of the loans are a fixed rate. We had negotiated for the Seller to pay almost all of the remaining closing costs as well as furnish a 1 year First American home warranty to the Buyer. Josh was also able to qualify the Buyer for a first-time buyer tax credit that will save money every year.

The road home

Just prior to closing, we stopped by the house to make sure everything was intact after the Seller had moved out. Since it was pouring down rain, we also wanted to check out the basement and make sure there weren’t any sudden leaks that weren’t evident when we inspected the house. Everything was just way we expected!

The Closing

Closing was very easy. There was signing and laughing as everyone was in good spirits. After all the papers were finalized and the checks were cut, our client was officially a Homeowner. As an added bonus of closing on the first of the month, he didn’t have a house payment for 2 months! Welcome to Cloverleaf and Welcome Home.