Kolt Christopher Homes


full-service real estate firm specializing in residential and commercial properties. We can help you buy a home, while providing expert advice.

320 W Lanier Avenue Ste. 229 Fayetteville, GA 30214


© 2021-2023 Kolt Christopher Homes Inc | Residential and Commercial Properties
New Home Buyers Guide

New Home Buyers Guide

There are a few things you should keep in mind when buying a house. First, make sure you have enough money saved up for a down payment. The average down payment is 20%, but it can be depending on the purchase price of the home and your credit score. You’ll also need to budget for closing costs, which typically range from 2-5% of the purchase price.

Another item to consider is the area in which you want to live. Consider the type of neighborhood you want to live in and how far from schools, restaurants, and shopping you want to be. It’s also crucial to find out if there’s a lot of crime in the region and whether it’s in a good school district.

Finally, before you start looking for houses, get a mortgage pre-approval. This will avoid you being outbid by another buyer and will help to speed up the house buying process once you’ve found the right one.

The bank will generally provide you with a mortgage when you buy a property. This is a loan that covers the majority of all of the purchase price of the home. You’ll need to make monthly payments on your mortgage until it’s paid off. If you stop paying, the bank can repossess your house.

Mortgage rates fluctuate based on several factors, including the interest rate available from the lender and your credit score. There are many different types of mortgages to choose from, including fixed-rate and adjustable-rate mortgages. Your interest rate with a fixed-rate mortgage will remain constant for the entire term of the loan. An adjustable-rate mortgage allows your interest rate to change over time.

What are some common types of mortgages?

FHA loans: As per Wikipedia, these “are federally insured loans created for low-income families looking to purchase their first home. They were designed to help make homeownership possible for creditworthy borrowers who could not make the large down payments typically required by conventional lenders.”

VA loans: These “are designed to help the United States military veterans become homeowners and require much lower upfront fees than other types of mortgage loans. To be eligible for a VA loan, a service member must either have served at least 181 consecutive days on active duty during wartime or at least 90 consecutive days on active duty during peacetime and ended their tour with an honorable discharge.”

 Conventional Loans: These are typically fixed-rate mortgages that aren’t insured or guaranteed by the government as FHA and VA loans are. The insurable property types vary from program to program but can include single-family homes, condominiums, and manufactured housing.

What documents do I need to provide when applying for a mortgage?

As per the US Department of Housing and Urban Development (HUD), you’ll typically need to provide the following documents as part of your loan application:

• Proof of income such as W-2s, pay stubs, tax returns, and investment account statements.

• Financial information supporting how much money you have saved for the down payment and closing costs.

‘• Your credit report and score.

Note: When you apply for a conventional loan, you can typically skip providing documentation of income and employment, but lenders will still want proof that you meet the minimum debt-to-income ratio requirements.

When does my lender order an appraisal?

According to Quicken Loans, “Mortgage underwriters will normally require an appraisal of the property you wish to purchase in order to verify that it is worth what they are lending on. This appraisal will also help determine what an appropriate interest rate would be for your new home loan.”

How long does the appraisal process take?

This depends, but typically “it can take anywhere from a few business days up to two weeks,” says Quicken Loans. “If the appraisal comes back with any issues or concerns, then this will hold up the processing of your file until the matter is completely resolved in order to protect all parties involved.”

What’s included in my lender’s closing costs?

Typically, lenders will charge fees based on where you live and how much money you’re borrowing. According to the US Department of Housing and Urban Development (HUD), these can include:

Origination fee: Many lenders charge a flat, up-front fee at closing. This is similar to a loan origination fee for a house that you buy. It’s based on the amount of your mortgage and varies from lender to lender.

Discount points: If you’re receiving a lower interest rate by paying this one-time fee, it could save you money in the long run. However, 1% of the loan balance (based on your loan amount) or $1,000, whichever is larger, usually applies as the standard discount point charge.

What are some common types of mortgages?

REFI: The lender will refinance your existing first mortgage into another first mortgage with new terms that are more favorable to you.

HELOC: A home equity line of credit can allow you to borrow money against your house’s value for any reason, just like a credit card. Though it may have higher interest rates than other types of mortgages, the interest is often tax-deductible. You can then pay off the loan as needed, whenever you want.

Cash-out refinances: This allows you to move money from one or more existing homeownership assets and put it into another asset (typically a home).

What’s the difference between a home purchase and a cash-out refinance?

A cash-out refinance is when you make changes to the property such as adding or updating items like plumbing, electrical wiring, HVAC, or appliances. You may also be able to increase your total loan amount beyond what you owe on the current property. This way you can take some of your equity and use it for other things such as making home improvements, taking a vacation, or clearing up high-interest credit card debt.

Any scenarios where I might want to consider a cash-out refinance?

Some people who own their property free and clear might consider cashing out some or all of the equity they have built up to cover college tuition for children, purchase another rental property, make home improvements or pay off high-interest credit card debt.

What is the 5/25 mortgage rule?

The combined total of your monthly installment payments on your existing first mortgage plus any new secondary loan cannot exceed more than 25 percent of your gross monthly income at the time you apply. Also, you can’t take cash advances from a second mortgage during the first two years after closing, unless it is for a bona fide second-home purchase with the cash used to reduce your first mortgage.

One thought on “New Home Buyers Guide
  1. Mark

    Thanks for your blog, nice to read. Do not stop.

    September 10, 2022 Reply
Leave a Reply

Your email address will not be published.