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McKinsey Alston

REAL ADVICE. REAL SUPPORT. REAL ESTATE.

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McKinsey Alston Realtor Logo

McKinsey Alston

REAL ADVICE. REAL SUPPORT. REAL ESTATE.

Buying Made Easy

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Tips for
Buying a New Home

Looking to buy a home? There are a lot of moving parts when it comes to buying a new property, especially if it is your first time. Here are some tips to help you get through the process while staying financially smart.

Mortgage Definition
LEARNING THE BASICS

  • There are four basic types of mortgages used by the majority of home buyers.
    • Conventional Mortgage – Standard loan used by buyers with good to excellent credit who make down payments of at least 5%
    • FHA Mortgage – More common for buyers with lower credit scores or house hackers looking to occupy a multi-family home like a duplex as they offer a down payment as low as 3.5% and lower interest rates.
    • VA Mortgage – Offered to all veterans and active military members. They provide up to 100% financing, simplified loan approvals, and lower interest rates. They can be much lower than conventional loans.
    • USDA Mortgage – Available to buyers in rural or low-density areas and offer up to 100% financing and below-market interest rates. Their ideal buyers are of average means, have lower credit scores, and are buying modest homes.

What Do
MORTGAGES INCLUDE?

  • The abbreviation “PITI” includes the four main components to a mortgage payment.
    • Principal – This is the repayment of the initial amount you borrowed from your lender (in other words, the price of your home) 
    • Interest – This is the payment to the lender for the money borrowed (and is then added on to the initial price of your home)
    • Taxes – Your annual city and county taxes assessed on your property are divided by the number of mortgage payments you make in a year and added into your mortgage.
    • Insurance – Your monthly homeowner’s insurance payment covers you against various hazards and is added to your mortgage payment.

Understanding Your Loan Options
BY SHOPPING AROUND

  • Do your research! To ensure you are getting the best rate possible, meet with at least two different lenders.
  • There are two types of interest rates offered by mortgage lenders that you should also understand.
    • Fixed-Rate Mortgage – The interest on a Fixed-Rate Mortgage will not change, so your monthly payments won’t change, making them very predictable.
    • Adjustable-Rate Mortgage – The interest rate on an Adjustable-Rate Mortgage will often be lower initially, but as interest rates do fluctuate with the market, they can be somewhat unpredictable or even result in higher payments.

Calculating Your
MONTLY BUDGET

  • Determine how much you can afford to pay every month – This will be used to calculate the price range of your home.
  • Mortgage costs are based on the price of the home as well as the current interest rates, making homes affordability vary each day.

Key Traits of a
GREAT REALTOR

  • Proactive: Learning your needs and ensuring they are met before you ask is key.

  • Responsive: When you have questions or need support, your agent needs to be there for you.

  • Teacher: Learning the process is important and your agent should be able to teach you everything you need to know.

  • Listener: Communicating your wants and desires is key…. Your agent must listen and provide accurate feedback.

  • Communicator: Real estate is like ABCs (Always Be Communicating). Communication is key.

Making
AN OFFER

  • Work together with your agent to determine a price you can afford but will also be acceptable for the seller. It’s competitive out there.
    • Pro Tip: When bidding against other buyers, think about the highest price you feel comfortable offering that if you win, you’re happy and if you are outbid, you know you did everything you could to win the home.

What Will I
PAY UPFRONT?

  • Earnest money, a down payment, and closing costs are all costs you must take into account.
  • Earnest money is like your security deposit and is determined by your loan, and closing costs represent the fees associated with paperwork and lender charges.

Requesting a
HOME INSPECTION

  • Once your offer is accepted, you must get a home inspection. 
  • Have an experienced professional walk through the house to check out any problems or maintenance issues that might not be visible at first glance.
  • Not sure who to hire? Ask your realtor for referrals.

CLOSING

  • Final negotiations and paperwork are the last steps in making the home yours.
    • Read over your contract with your agent or lawyer to ensure you are not obligated to buy the home if something falls through with your mortgage.
    • Submit your mortgage application, have your home appraised, and review closing costs with your lender.

PRO TIPS

Buying a home is not an easy process

But to make your process easier, we have created downloadable documents you can take with you!

Contact Me Below to Start your home-buying process & Receive your free Home Buyers Guide!

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