In planning a move, whether it’s an employee-sponsored relocation or not, most people tend to focus on the costs of selling the old home and moving a house full of goods. The costs associated with buying a new home often receive little attention. But they can be significant, so most companies offer some form of New Home Purchase and Mortgage Assistance benefits to defray the cost and ease the transition.
In most cases, only employees who currently own a home qualify for New Home Purchase benefits. A few companies will offer New Home Purchase Benefits to current renters, either as a matter of policy or on an exception basis. The renter-to-homeowner transition is more common when an employee is transferring from a high housing cost area to a less expensive one, which is perhaps another reason why Home Purchase benefits for renters are relatively rare.
What Is Covered
New Home Purchase and Mortgage Assistance usually covers some or all of the common expenses incurred in obtaining a mortgage and closing on the home. These can include:
- Credit reports
- Mortgage application fee
- Loan origination fee
- Mortgage points
- Attorney’s fees.
- Property surveys
- Title insurance
- Title search
- Deed recording fees
- Transfer taxes
Most relocation management companies work with one or more mortgage lenders. These lenders are experts at working with relocating employees. They can assist the employees in getting preapproved prior to their first home finding trip so that they can make an immediate offer on a home. These preferred lenders also can usually direct bill most of the closing costs. This means that the employee doesn’t need to pay these charges up front and wait for reimbursement, a big help during an expensive transition. It is important to note that direct billing might not be available if the employee works with a lender outside of the employer’s network.
Other costs associated with homeownership, such as property taxes and insurance, are still the employee’s responsibility. Many policies include a miscellaneous allowance to assist with other transition costs not specifically spelled out in the policy.
Why New Home Assistance?
The costs associated with purchasing a new home are often an afterthought. Employees are excited about the move and are more focused on the price of the home and imagining themselves living in it. New Home Assistance and Mortgage Assistance can help to speed the transition, increase employee satisfaction and support your company’s overall workforce strategy.