The vast majority of home buyers need financing to help fund the purchase of a new home. But what does
​​​​​​​a mortgage payment include? Here’s a breakdown of where your money goes with each mortgage payment.

Principal: The largest percentage of your mortgage payment goes toward the principal, which refers to the total amount you borrowed to buy your house or the amount you have not yet repaid. With most loans, the percentage of your mortgage that goes toward the principal will increase over time because lenders like to collect more interest early on to help minimize the financial risk of a potential loan default.

Interest: A segment of your monthly mortgage payment will always go toward interest, which is essentially the cost you pay to borrow money from a lender. Lenders assess interest rates based on perceived risk,
so it’s important to make sure your credit and finances are strong when applying for a mortgage loan.

Other expenses: In addition to principal and interest, mortgage loans also pay for real estate taxes, homeowners insurance and, if applicable, private mortgage insurance (PMI). You may also be responsible
for HOA fees if your community is governed by a homeowner’s association.

Have more questions?  Give me a call!

256.689.2688

ashley@eraking.com

A closing is one of the most important steps in the home buying process – but if this is your first time purchasing a house, you may be wondering exactly what’s involved. Let’s break down what a closing
is and what you can expect.

What us a house closing? Simply put, a house closing is the final stage in the buying process, during which buyers fulfill all of their contractual obligations. In other words, this is the stage at which buyers settle their payment to sellers. There are also closing costs to consider, which are typically 2 to 5% of the loan amount and can include things like a title search fee and transfer taxes.

When does the closing usually occur? Time frames vary, but closings are typically held within one to two months after your offer is formally accepted. During that time, buyers usually schedule appraisals and home inspections.

What can I expect on closing day? Expect a lot of paperwork! You’ll be signing contracts between yourself and your lender (basically agreeing to the terms of your mortgage), as well as with the property sellers. For new construction houses, you’ll need to sign a certificate of occupancy. Once you’ve settled any outstanding payments and signed the necessary documents, you’re officially the owner of your new home.

Homeowners Association Fees, what are they?

Thinking about buying a house in a Homeowners Association (HOA)? Here are three key things to keep
in mind before (and during) the closing process.

It may affect your mortgage loan. Lenders will consider how buying a property with an HOA might impact your individual financial situation. The required HOA fee could influence your ability to qualify for financing since it affects your debt-to-income ratio. Always maintain open communication with your lender about how HOA costs will impact your finances.

You may already owe money. Sometimes HOA properties are “sold as is.” This means they might come with multiple liens from lenders, municipalities and homeowners associations. Make sure the property is not in collection and request information in writing from the HOA to confirm that there are no outstanding fees or violations.

Determine whether it’s worth it. The value of a homeowners association depends on the person and community. Some HOAs offer attractive amenities such as gardens, community streets, security, gyms, clubhouses, landscaping services and swimming pools. Balance the benefits with the costs and work with
​​​​​​​an experienced agent who will perform complete due diligence to make sure you won’t be blindsided by unexpected rules or fees.

Have questions?  Give me a call!

256.689.2688

ashley@eraking.com

Buyer Tips:

You’ve probably heard the saying before: when it comes to home buying, the three most important things to think about are location, location, location. After all, it’s the one aspect you can’t change about a home once you buy it. But what specifically about location should you be considering when deciding where to look for houses? Here are some questions to ask yourself.

Is it near work and essential services? If you have a job that requires you to be in the office on a regular basis, it makes sense to look for a house nearby, so that you don’t have to spend a lot of time commuting. Likewise, buying a home near things like grocery stores, doctor’s offices and other important services will
add convenience to your life.

How are the schools? Even if you don’t have school-aged children, buying a home in a school district
with a good reputation is a smart move, as it enhances the resale value of your property.

What do the people who live there say about it? If possible, try to visit the neighborhoods you’re interested in and ask residents how they feel about living there. Most people will have no problem answering a few basic questions about the area, especially if they’re happy with it.

Have more questions?  Give me a call!

ashley@eraking.com

256.689.2688

If you’re thinking of buying a new home, you may be asking yourself, “how much do I need for a down payment?” While everyone’s home buying situation is different, here’s what you can expect to pay upfront
for your first home.

What is a down payment? When applying for a mortgage, the down payment is the upfront contribution
you pay toward the purchase of a home. You may have heard that lenders require a 20% down payment,
​​​​​​​but that’s actually just the threshold many use for requiring mortgage insurance on a conventional home loan.

How much do you really need? Realistically, most first-time buyers need at least 3% down for a conventional mortgage loan or 3.5% for an FHA loan. That means you’d need to save between $10,500
and $12,250 to purchase a $350,000 home. Bear in mind that you will have to put at least 20% down on
your mortgage loan to avoid having to pay private mortgage insurance (PMI), which protects the lender if
you default on your mortgage loan.

Do you always need a down payment? Certain federal home loan programs (VA or USDA) allow nothing down, but these have special requirements. In some instances, first-time buyers qualify for federal- or state-funded down payment assistance, so be sure to ask your real estate agent or lender what help is available.

Home Buying Tips: What Can I Afford?

If you’re in the market for a new home, the first thing you need to do is determine your price range.
Here are a few tips to consider when estimating how much house you can afford.

Use your salary as a guide. While estimates vary depending on whom you ask, a good rule is to search for homes that are about 2.5 times your household annual income (pre-tax). If you have very little debt, you can increase that number a little.

Calculate your DTI. When you apply for a mortgage, lenders will look at your debt-to-income ratio (DTI) – essentially, how much you earn versus how much you owe. The lower your DTI, the better (most lenders like to see a ratio of about 43% or less). By calculating your DTI in advance, you’ll have a better idea of what you might expect in terms of a loan.

Set aside money for additional costs. Closing costs can be as much as 5% or 6% of your loan amount,
so you’ll need to include that as part of your home buying budget. Keep in mind, too, that once you’re settled in your new home, there will be expenses other than just your mortgage to consider. Build in a monthly amount for home repairs and maintenance.

Sophisticated Storage: Elegant Home Pantries

Whether they’re used for storage space or staging areas, walk-in pantries have become popular upgrades
for today’s luxury homes. Also known as butler’s pantries, these upscale additions provide excellent utility while serving as beautiful extensions of the kitchen. Here are some trending luxury pantry design concepts
to consider for your home.

Innovative Pantry Ideas

Modern luxury homeowners are incorporating innovative storage concepts that blend harmoniously with diverse interior design schemes. A big part of this trend centers on walk-in pantries, which have become
the latest must-have for luxury homeowners seeking to elevate every square inch of their upscale homes.

But if you’re imagining a glorified food inventory with shelves of apothecary jars and cork-topped spice containers, think again. A growing number of properties are incorporating spacious Instagram-worthy pantries, with some reaching the status of second kitchens.

The Wall Street Journal recently highlighted this growing trend in a story featured in its popular ‘Mansion’ section. The piece profiled higher-end pantries that essentially serve as auxiliary kitchens in upscale homes. And while it’s easy to see the appeal of a second functional kitchen hidden out of sight, luxury walk-in pantries can vary in purpose and size.

Whatever the scale, there’s plenty of room for personalization based on your unique needs, preferences
and interior design scheme. But what truly makes a walk-in pantry functional and luxurious?