National Homeownership Month
June is National Homeownership Month And We Have Houses For Sale!
President Clinton started this tradition as a week of observation in June 1995. He wanted to remind all Americans that they can make the dream of homeownership a reality. In 2002, President Bush expanded it from the original week to an entire month. This month, we are helping our customers realize how easy and affordable building a new construction home can be. While this process may seem overwhelming, the benefit is that you would have our entire team supporting you along the way.
Making Your Homeownership Journey Easy
Having looked for ways to make the process easier, we have found that our customers appreciate having a preferred lender guide them through the mortgage process because the financing aspect seems the most intimidating. For those of you who would like to brush up on the terminology or become prepared to discuss finances, look no further than this article. In the following, the main terms associated with new home financing are listed. By learning them, you can gain the confidence to determine your needs when speaking with your loan officer.
The Basic Financing Terms to Know
Short for principal, interest, taxes, and insurance, PITI is the first term to understand. These components are what make up a standard monthly mortgage payment. Did you know that extra money on your principal can reduce the number of years in your loan? This is a great way to build wealth or equity.
Understand Your Interest Rate & Affordability
Interest rate is the percentage a lender will charge you to borrow money for purchasing a home. It’s important to understand how this rate affects your monthly payments. Everyone wants a home that is affordable. Use our mortgage calculator to see the difference a lower interest rate can have on your monthly payment. In your mortgage documents, you will see two different numbers—the interest rate on the mortgage and the annual percentage rate (APR). The APR is typically a little higher than the mortgage interest rate because it includes other fees involved in obtaining your loan. The interest rate on mortgages can be fixed or adjustable. With a fixed-rate mortgage, the interest rate will always remain the same. With an adjustable-rate mortgage (ARM), the interest rate can change over time.
What Do The Banks Require?
- Appraisal: An appraisal is an educated estimate of the value of a property. Lenders require an appraisal of the property. This is to prevent them from lending more money than the house is worth. Real estate contracts generally include a clause that specifies that the agreement depends on the appraisal price being equal to or higher than the agreed-upon sale price. Sometimes, for a newly constructed home, a pre-appraisal may be required. This simply means that the appraisal happens at the beginning of the build instead of at the end.
- Origination fees: Lenders incur expenses when they process a mortgage. These expenses are passed on to the borrower in the form of origination fees. This fee is usually a percentage of the loan amount, typically 0.5% to 1%.
- Private mortgage insurance (PMI): PMI protects the lender if borrowers are unable to make payments and the lender has to take back the house. PMI is added to the monthly payment; it goes away after 20% of the value of the house has been paid off.
- Closing costs: In the home-buying process, the last step is a meeting called a closing. That’s when prospective homeowners sign all the papers, and everyone gets paid. Before the closing, homebuyers get a statement called a HUD 1, which lists all the costs and discloses how much money a homebuyer needs to bring to take possession of a house. Closing costs will cover such items as the down payment, document fees, deed filing fees, title insurance, appraisal costs, closing attorney fees, and surveyor fees. This month we are offering promotions and incentives to help with your closing costs and make your out-of-pocket dollars more affordable.
Homes For Sale & Where to Look
This covers some of the basics, but you might run across other terms that are new to you. Our goal is to help you make informed decisions at every step of the process, so don’t hesitate to reach out to your team! We understand your search may include houses for sale near me, so make sure you also consider new. Our goal is to provide homeownership assistance every step of the way. We are on Zillow houses for sale, Realtor.com houses for sale and have an easy builder website to navigate so make sure you are checking us out on all three! Pyatt Builders offers Move-In-Ready homes and new construction builds all through the Greater Indianapolis Area: Mooresville, Pittsboro, Plainfield, Danville, Indianapolis, McCordsville, and much more. Check out where we build!
Happy Homeownership Month!
We hope that you will take the leap of faith and build your dream home this year!