- When Buying A Home -
Buying a home is an exciting and complex adventure. It can also be a very time-consuming and costly one if you're not familiar with all aspects of the process, and don't have all the best information and resources at hand.
Our specialties represent the best interests of Burke County area buyers throughout the home buying process. Our comprehensive, high-quality services can save you time and money, as well as make the experience more enjoyable and less stressful.
If you're like most people, buying a home is the biggest investment you will ever make. So whether you're buying your dream home or an investment property, why not take advantage of our experience as local market experts for the Morganton/Burke County area. We'll help you make the most informed decisions you can, every step of the way.
- Some good questions to ask when buying a home -
- Community - What is most important to you:
Urban, Suburban, Rural, View, Waterfront, Acreage, Golf Course?
- Schools - What are your specific needs?
- Shopping - What are your special needs?
- Time Frame - When do you want to move in?
- Reasons for Moving?
- Home Style:
Two Story, Split Level, Four Level Split, Ranch, Cabin
- Home Setting:
Open, Private, Wooded, Sunny, Yard Size
- Present Home
What do you value that you want to have in your next home?
What do you dislike in your present home?
- Lifestyle - What recreational activities do you most enjoy?
- Amenities - What special features do you desire?
- Home Features
Age? ___ New ___ Pre-owned or Resale # of Bedrooms? # of Baths?
- Types of other Rooms? (rec room, garage, ect.)
- What the other rooms have? (type of flooring, fireplace, counter top types, ect.)
- Parking requirements?
- Special requirements, needs?
- Price range:
- Pre-qualified? YES/NO
- Pre-approved? YES/NO
- Must you sell before purchasing? YES/NO
- Down Payment Sources:
- Bridge loan or equity loan
- Stocks & bonds
- Life Insurance
- Gift funds
- Company profit sharing/savings plan
- Monthly payment you are comfortable with?
(Current rule of thumb: The monthly payment and other debts should not be more than 36-38% of gross monthly income.)
- Financing Options:
Fixed Rate Mortgage
The interest rate stays the same throughout the term of the loan - usually 15 or 30 years - so the principal interest portion of your payment remains the same. Payments are stable but initial rates tend to be higher than adjustable rate loans and often cannot be assumed by a subsequent buyer.
- Balloon Mortgage
This is a loan which must be paid off after a certain period. The advantage they offer is an interest rate that is lower than a mortgage that is made for 30 years.
- Adjustable-Rate Mortgage (ARM)
The interest rate is linked to a financial index, such as a Treasury security or a cost of funds - so your monthly payments can vary up or down over the life of the loan - usually 25 to 30 years. Interest rates can change monthly, annually, or every 3 or 5 years. Some ARMs have a cap on the interest rate increase, to protect the borrower.
Other terms relating to adjustable-rate mortgages:
- ADJUSTMENT PERIOD: The length of time between interest rate changes. Example: one year ARM-interest changes annually.
- CAP: The limit on how much an interest rate or monthly payment can change at each adjustment or over the life of the loan.
- CONVERSION CLAUSE: A provision in some loans that enables you to change an ARM to a fixed rate loan, usually after the first adjustment period. This may require additional fees.
- INDEX: A measure of interest rate changes used to etermine changes in the loan's interest rate over the term of the loan.
- MARGIN: The number of percentage points a lender adds to the index rate to calculate the ARM's interest rate at each adjustment.
- VA Loan
The VA does not lend money, it guarantees a portion of the loan so that lenders who originate the loan feel comfortable with their risk. Qualified veterans can obtain loans up to $203,000 with no down payment. VA-guaranteed loans can be combined with second mortgages and are assumable upon qualifying by any future buyer.
- FHA Loan
FHA does not lend money or make a loan; rather, it insures loans. The down payment can be as low as 2.25%. Discount points may be paid by either buyer or seller. FHA charges a 2.25% up front Mortgage Insurance Premium (or as little as 2% for a first time home buyer) that can be financed in the mortgage amount or paid in cash (no premium is required for condominiums). The borrower must also pay an annual Mortgage Insurance Premium or .5% which is collected monthly.
- Seller Assisted Second Mortgage
The seller of the house lends the buyer enough to make up the difference between the purchase price and the down payment plus first-mortgage balance (a commercial lender may also make this kind of loan). The terms including the interest rate, are based on buyer/seller agreement. It is often a short-term (5 to 15 year) loan; sometimes "interest only" payments until the term date when the balance is due in full. A buyer can then refinance the home.
- Assumable Mortgage
Buyer "takes over" or assumes the mortgage obligation of the seller (with concurrence of the lender). The interest rate doesn't change and is sometimes lower than current rates. often the loan fees are less as well.