Breakdown of Monthly Mortgage Payments

A typical monthly mortgage payment comprises several key components:

• Principal: The principal is the initial amount you borrowed to buy your home. Over time, your monthly payments gradually reduce this principal, increasing your equity in the property.

• Interest: Interest is the cost of borrowing money from the lender. It’s calculated based on your remaining loan balance and the interest rate. In the early years of your mortgage, a larger portion of your payment goes towards interest, gradually decreasing over time.

• Taxes: Property taxes are assessed by your local government to fund public services like schools, roads, and public safety. Lenders often collect a portion of these taxes as part of your monthly payment and then pay them on your behalf.

• Homeowners Insurance: Homeowners insurance protects your property against damage from events like fire, theft, or natural disasters. Your lender may require you to have an insurance policy in place, and a portion of the annual premium is included in your monthly mortgage payment.

• Private Mortgage Insurance (PMI): If you make a down payment of less than 20% of the home’s purchase price, your lender may require PMI. This insurance protects the lender in case you default on your loan. PMI adds to your monthly payment until your loan-to-value ratio reaches 80%.

Impact of Each Component

Understanding how each component affects your monthly payment can help you make informed decisions about your mortgage:

• Principal and Interest: These two components make up the core of your mortgage payment. Early on, more of your payment goes towards interest, but over time, the balance shifts towards reducing the principal.

• Taxes and Insurance: These components contribute to your overall payment but don’t directly affect your loan balance. However, failure to pay property taxes can lead to liens on your property, while lacking homeowners insurance leaves you vulnerable to unexpected expenses.

• PMI: PMI can significantly increase your monthly payment, making it crucial to aim for a 20% down payment to avoid it or explore options for removing PMI once your equity increases.

Tips to Reduce Monthly Payments

Here are some strategies to lower your monthly mortgage payments:

• Improve Credit Score: A higher credit score can qualify you for a lower interest rate, reducing your monthly interest payment.

• Increase Down Payment: A larger down payment can help you avoid PMI and reduce your loan amount, resulting in a lower monthly payment.

• Refinance: When interest rates drop, refinancing your mortgage can lead to a lower monthly payment.

• Appeal Property Assessment: If you believe your property’s assessed value is too high, you can appeal your property tax assessment to potentially lower your taxes.

Real Estate Market Case Studies

Let’s consider two scenarios:

1. Scenario A: A borrower with a 10% down payment ($30,000) on a $300,000 home, resulting in PMI costs of $100 per month.

2. Scenario B: A borrower with a 20% down payment ($60,000), avoiding PMI altogether.

Over a 30-year term, Scenario B could save over $36,000 in PMI payments, showcasing the impact of a larger down payment.

Monthly mortgage payments consist of several components, each with its significance in shaping your homeownership journey. By understanding the breakdown and factors influencing these payments, you can make informed decisions that align with your financial goals. Implementing strategies to reduce your monthly payments can contribute to long-term savings and increased financial security as you navigate the real estate market. Remember, a little knowledge and thoughtful planning can go a long way in making your homeownership dreams a reality. Ready to start your home buying journey? Visit us here to schedule a meeting with a Sage & Cedar agent. 

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Scroll for more info and a full video tour

Have the best of both worlds! Live in the city but feel like you are in the countryside! A one-of-a-kind home in the city of Atlanta! Winner of Atlanta Urban Design Commission Award of Excellence. Originally, 2 1900 farm hand homes that were moved from Kennesaw and made into one home to make this amazing piece of property. The project took two and a half years to complete! Every part of the two homes that could be, was salvaged. 

The home sits back from the street with multiple indigenous plantings that bloom from early spring to late fall. Southern hospitality meets you with Hydrangeas, Magnolias, Azaleas, Rhododendrons and Camellias all blooming at different times. Entering the home, you will see original 1900 shiplap and the heart pine flooring that you simply can’t find today. To the left you will greet your guests in the parlor with an original wood burning fireplace. To the right you will find the large dining room containing built-in bookshelves and gas fireplace. In total there are 6 working fireplaces throughout the home. 

Moving to the rear of the main home, you enter the brick floored kitchen and art gallery. The kitchen boasts an 8×6 foot Carrera marble island, 48-inch ILVE Italian range with griddle and hidden 48-inch Subzero fridge. Truly this is a Chef’s kitchen that is built for entertaining! To the other side of home is a bedroom and bath on the main floor with soaring ceiling, original 1900 siding and original doors. 

Arriving upstairs you will see the gorgeous 12-inch heart pine flooring that leads out to your second story covered porch which is perfect for morning coffees. To the back is the office with floor to ceiling windows overlooking the beautiful brick courtyard. Upstairs is an additional secondary bedroom with working fireplace and full ensuite bath. Across from this is the owner’s suite with 2-sided fireplace, heart pine floors, custom California closets and beautiful Soaking tub. 

Once outside thru the brick courtyard you will see the oversized 2 car garage with tons of attic storage. Keep strolling to see the original 1930s home that now serves as an Au Pair or guest house. Approximately 800 square feet, this beautiful dwelling can serve as additional income, an in-law suite, or an office suite with its 1 bedroom, newly renovated kitchen, and great over all space. Recently added covered parking allows parking for 5 cars. 

2806 Alston Drive Atlanta GA 30317

To the right of the guest house, you will see the 14X28 heated Saltwater pool and Cabana with electrical, fan and tv. For those evening parties, the pool is surrounded by ground can lights that guide the way from the main home to the pool. Just past the pool is the pool house with bath, shower, and kitchenette. 

A fence separates the main property from the back property with perennials, peach trees, pear trees and blueberry bushes. Walk further and you will see a small garden and an additional grassy area perfect for Tennis courts, pickleball courts or a bocce ball court. New roofs, New HVAC, etc…The location cannot be beat overlooking the 1st green of East Lake Golf Club. Just a short stroll to Poor Hendrix, La Fonda, Perc Coffee, and Oakhurst. And just minutes to I-20, I75/85, The Airport, Drew Charter, and all of Decatur!

Interested in touring 2806 Alston Dr for yourself? Visit the listing page, here, and request a tour! We can’t wait to show you around! 

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4 Smart Home Features That Just Make Sense

01. Smart Thermostat – A Smart Thermostat is a game-changer when it comes to energy efficiency and cost savings. Unlike traditional thermostats, smart thermostats can learn your daily routines and preferences, automatically adjusting the temperature to optimize comfort and save energy. They can also be controlled remotely via a smartphone app, allowing you to adjust the temperature even when you’re away from home.

One of the most significant benefits of a smart thermostat is its ability to create personalized heating and cooling schedules. For instance, it can recognize when you typically leave for work and return home, adjusting the temperature accordingly. Additionally, some smart thermostats can integrate weather forecasts to anticipate changes in temperature and make adjustments proactively.

02. Security Cameras and Smart Locks – Home security is a top priority for homeowners, and smart cameras and locks provide an effective and convenient solution. Smart security cameras offer real-time monitoring, high-definition video quality, and even night vision capabilities. They can be accessed remotely through a smartphone or tablet, giving you peace of mind no matter where you are.

When integrated with smart locks, these cameras allow you to remotely grant access to trusted individuals, such as family members, friends, or delivery personnel. You can also receive notifications when someone approaches your front door, providing an added layer of security.

Smart locks themselves are a valuable addition to any home. They eliminate the need for physical keys by enabling keyless entry through a PIN code, smartphone app, or even biometric identification. This not only enhances security but also adds convenience, as you no longer need to worry about losing your keys or fumbling with locks.

03. Smart Alarms – Traditional home security systems often come with a complex web of wires and components, making installation and maintenance cumbersome. Smart alarms, on the other hand, are wireless, easy to set up, and highly customizable.

These alarms can be integrated with other smart home devices, such as motion sensors and security cameras, to provide comprehensive protection. If an intrusion is detected, you will receive instant alerts on your smartphone, allowing you to take appropriate action or notify the authorities if necessary.

Moreover, smart alarms can incorporate machine learning algorithms that adapt to your household’s patterns, reducing the likelihood of false alarms while ensuring maximum security.

04. Smart Lighting – Smart lighting systems offer both convenience and energy efficiency. With smart bulbs and switches, you can control the lighting in your home remotely, set schedules, and even change the color and intensity of the light to create different moods.

Having the ability to automate your lights can also improve home security. By setting up schedules to turn lights on and off while you’re away, you can give the illusion that someone is at home, deterring potential burglars.

Additionally, some smart lighting systems can integrate with other smart devices, such as motion sensors or smart assistants, to enable hands-free control. You can simply ask your smart assistant to turn on or dim the lights without lifting a finger.

As technology continues to advance, smart home features are becoming increasingly accessible and indispensable for modern homeowners. Smart Thermostats, Security Cameras and Smart Locks, Smart Alarms, and Smart Lighting are four essential components that just make sense, offering convenience, energy efficiency, and enhanced security. Investing in these smart home features not only makes your life more comfortable but also gives you the peace of mind knowing that your home is safer, more efficient, and connected like never before. Click here to learn more about upgrading your home!

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4 things to do before moving into your new home

01. Change the Locks – One of the first things you should prioritize when moving into a new home is changing the locks. You never know how many copies of the existing keys are floating around, so it’s best to take precautions to protect your home and family. Engage a professional locksmith to replace the locks on all exterior doors. This will not only provide you with a sense of security but also give you peace of mind, knowing that you have complete control over who has access to your home.

02. Change Toilet Seats – While it may seem like a small detail, replacing toilet seats is a hygienic and essential step when moving into a new home. Regardless of how clean the previous owners were, it’s best to start fresh. Toilet seats are relatively inexpensive and easy to install, and doing so will help ensure a cleaner and more personalized bathroom experience for you and your family.

03. Change Air Filters – Maintaining good air quality is vital for a healthy living environment. When moving into a new home, it’s essential to change the air filters before settling in. Over time, air filters accumulate dust, allergens, and other particles that can adversely affect indoor air quality. By replacing the filters, you’ll promote clean and fresh air circulation throughout your home. Additionally, it can help improve the efficiency and longevity of your HVAC system.

4 things to do before moving into your new home

04. Reset Smart Devices – In our increasingly connected world, many homes are equipped with smart devices such as thermostats, security systems, and home assistants. Before moving in, it’s crucial to reset these devices to ensure that you have control over them. Start by disconnecting all previous connections, removing any existing accounts, and performing a factory reset on each device. This step will safeguard your privacy and prevent unauthorized access to your home automation systems.

Moving into a new home is an exciting time, and by taking these four essential steps before settling in, you can ensure a smooth transition and a safe, comfortable living environment. Changing the locks, replacing toilet seats, changing air filters, and resetting smart devices may seem like small tasks, but they play a significant role in enhancing your security, hygiene, and overall well-being. By prioritizing these steps, you’ll be able to relax and enjoy your new home to the fullest, knowing that you’ve taken the necessary precautions for a fresh start. Want to learn more about maintaining your new home? Sign up for our newsletter at the top of the page!

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6-8 Months to Secure Your Dream Home

01. Financial Preparedness – One of the primary reasons to start planning for a home purchase several months in advance is to ensure financial readiness. Buying a home involves various costs, including down payments, closing costs, and moving expenses. By giving yourself enough time, you can assess your current financial situation, set a realistic budget, and work towards improving your credit score if necessary. Saving money, paying off debts, and establishing a strong credit history are all crucial steps that can help you secure a favorable mortgage and increase your chances of getting pre-approved for a loan.

02. Research & Education – Real estate markets can be complex and ever-changing, so conducting thorough research and educating yourself about the process is invaluable. Starting your home buying journey early allows you ample time to explore different neighborhoods, understand property values, and familiarize yourself with the local housing market. By being proactive in your research, you can identify trends, assess market conditions, and make informed decisions when the time comes to make an offer. Moreover, you can take advantage of online resources, attend open houses, and consult with real estate professionals (like us at Sage & Cedar) to gain valuable insights into the home buying process.

03. Connecting with a Real Estate Agent – By starting your planning 6-8 months ahead of time, you can take the opportunity to connect with a real estate agent, mortgage lenders, and other industry experts. Professionals like us can guide you through the process, answer your questions, and provide valuable advice. Developing these relationships early on will allow you to establish a rapport, gain access to off-market listings, and potentially secure better deals when the time comes to make an offer.

The Importance of Early Home Buying Planning

04. Time for Pre-Approval and Mortgage Shopping – Obtaining pre-approval for a mortgage is an essential step before house hunting. Pre-approval provides you with a clear understanding of your purchasing power and strengthens your position when negotiating with sellers. Starting the process early gives you ample time to research different mortgage options, compare interest rates, and choose a lender that best suits your needs. By securing pre-approval, you can streamline the home buying process, eliminate potential financing hurdles, and ensure a smoother transaction.

05. Finding Your Dream Home – The home search process can be time-consuming, especially if you have specific requirements or preferences.During this time you can browse listings, attend open houses, and schedule viewings at your desired pace. Rushing into a decision could lead to regret or settling for a property that doesn’t meet your needs. By giving yourself sufficient time, you can thoroughly explore the market, visit multiple properties, and ultimately find the home that aligns with your budget, location, and lifestyle.

Embarking on the journey to buy a home is an exciting yet complex process that requires careful planning. By starting the planning phase 6-8 months ahead of time, you lay a solid foundation for a successful home purchase. Financial preparedness, thorough research, building relationships with professionals, securing pre-approval, and allowing ample time for the home search are all crucial elements that contribute to a smooth and satisfying home buying experience. Ready to take the leap? Visit us here to schedule a one on one buyer meeting with a Sage & Cedar professional!

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Home Warranty:

A home warranty is a service contract that provides coverage for repairs or replacements of major household systems and appliances. It acts as a form of protection against unexpected breakdowns due to normal wear and tear. Home warranties are typically purchased for a specific period, usually one year, and can be renewed annually.

Home warranties typically cover a range of systems and appliances, such as HVAC (heating, ventilation, and air conditioning), plumbing, electrical systems, water heaters, kitchen appliances, and more. When a covered item malfunctions or breaks down, the homeowner can contact the warranty provider, who will arrange for a qualified technician to repair or replace the item, usually for a small service fee

Benefits:

01. Financial Protection: Home warranties provide homeowners with peace of mind by offering financial protection against unexpected repair costs, which can be a significant relief, especially for older homes or appliances.

02. Convenience: With a home warranty, homeowners can rely on a network of pre-screened service providers, saving time and effort in finding reputable technicians. The warranty company handles the coordination of repairs, simplifying the process for the homeowner.

Limitations:

01. Limited Coverage: Home warranties have specific coverage limits and exclusions. Pre-existing conditions, improper maintenance, or neglect may not be covered. It is important to read the contract carefully to understand the terms and conditions.

02. Service Fees: While the warranty covers the cost of repairs or replacements, homeowners often have to pay a service fee or deductible for each service call, which can vary depending on the warranty provider.

Homeowners Insurance:

Homeowners insurance, on the other hand, is a type of insurance policy designed to protect the structure of your home and your personal belongings from covered perils, such as fire, theft, vandalism, or natural disasters. It is typically required by mortgage lenders and provides coverage for unexpected events that cause damage or loss to your property.

Homeowners insurance covers the physical structure of your home, including walls, roofs, and other attached structures, as well as personal belongings such as furniture, appliances, and electronics. It also provides liability coverage in case someone is injured on your property and you are legally responsible for their injuries.

Benefits:

01. Dwelling Protection: Homeowners insurance provides coverage for repairing or rebuilding your home in the event of covered perils, ensuring financial protection against significant damage or destruction.

02. Personal Property Coverage: In case of theft, fire, or other covered events, homeowners insurance can help replace damaged or stolen personal belongings, such as furniture, clothing, or electronics.

Limitations:

01. Specific Perils: Homeowners insurance typically covers specific perils mentioned in the policy. It may not cover damage caused by floods, earthquakes, or routine wear and tear. Additional coverage or separate policies may be required for such events.

02. Deductibles and Premiums: Homeowners insurance policies usually have deductibles, which means homeowners are responsible for paying a certain amount out of pocket before the insurance coverage kicks in. Premiums can also vary depending on factors like location, coverage limits, and the homeowner’s claims history.

A home warranty primarily covers the repair or replacement of major systems and appliances due to normal wear and tear, while homeowners insurance protects against specific perils that can cause damage to the structure of the home and personal belongings. It is essential for homeowners to evaluate their needs and consider both options to ensure comprehensive coverage for their valuable assets. Ready to take the next step into homeownership? Visit us here to connect with a S&C agent!

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You Don’t Need to Put Down 20% to Buy a Home

Gone are the days when a 20% down payment was the norm for buying a home. With the evolving real estate market and the advent of new financing options, potential homeowners now have more choices than ever before. Lenders understand the diverse financial situations of buyers and have developed alternatives that require a smaller upfront payment.

Lower Down Payment Options

01. Federal Housing Administration (FHA) Loans: Backed by the government, FHA loans offer down payments as low as 3.5%. This option is particularly advantageous for first-time homebuyers who may have limited savings or lower credit scores.

02. Conventional Loans: While conventional loans traditionally required 20% down, there are now options available that allow for as little as 3% down. Private Mortgage Insurance (PMI) may be required, but this allows buyers to enter the market sooner.

03. Veterans Affairs (VA) Loans: Exclusive to eligible military service members, VA loans often require no down payment, making homeownership more accessible to those who have served their country.

04. United States Department of Agriculture (USDA) Loans: Designed for buyers in rural areas, USDA loans offer low or zero down payment options to promote homeownership in underserved communities.

Down Payment Assistance Programs

Numerous down payment assistance programs are available across the country, providing financial support to qualified homebuyers. These programs, offered by state, local, and nonprofit organizations, can offer grants, loans, or deferred payment options to bridge the gap between what buyers can afford and the traditional 20% down payment.

All this to say, the notion that a 20% down payment is an absolute requirement for buying a home is no longer accurate. With the availability of various loan programs, down payment assistance options, and alternatives such as PMI, prospective homeowners have more flexibility in achieving their dreams of homeownership. By understanding these alternatives and working closely with lenders and real estate professionals, you can embark on your homeownership journey with a smaller down payment, making it more accessible and achievable than ever before. Remember, it’s always wise to consult with a mortgage professional to determine the best course of action based on your specific financial situation. When you’re ready to take that next step, visit us here to set up a buyer meeting!

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Learn about Mortgages for Teachers and Educators

What is down payment assistance? – Down payment assistance is a type of financial assistance that can help qualified buyers cover the upfront costs associated with purchasing a home. This assistance can come in the form of grants, loans, or other types of financial aid.

Who qualifies for down payment assistance? – Qualifications for down payment assistance programs vary depending on the specific program. However, many programs are targeted toward low- to moderate-income homebuyers, first-time homebuyers, and those who work in certain professions, such as education.

What types of down payment assistance are available for teachers? – There are a few different types of down payment assistance programs that are available specifically for teachers depending on your state. In Georgia, one of the programs is PEN with GA Dream! The Georgia Dream program was created to make homeownership possible for eligible low and moderate income Georgians by providing affordable financing options, down payment assistance, and homebuyer education. Potential homebuyers apply with participating lenders for Georgia Dream loans. The loans are secured or guaranteed by FHA, VA, USDA-RD or conventional uninsured loans. Borrowers must attend and complete either a homebuyer education workshop, individual housing counseling sessions, or an online homebuyer education course through E-Home America. As of February 23, 2023, the standard amount was increased to $10,000, and for PEN (Protectors, Educators, and Nurses) that amount has been increased to $12,500!⁠

More about Mortgages for Teachers and Educators

How do I apply for down payment assistance? – To apply for down payment assistance, you’ll need to research the specific programs that are available in your area and determine which ones you may qualify for. You’ll then need to fill out an application and provide documentation to support your eligibility. It’s important to note that down payment assistance programs often have limited funds available, so it’s best to apply as early as possible. Best place to start is with your local Realtor. They can point you towards the right lenders that offer assistance! 

Ready to start your home buying journey? Click here to connect with a Sage & Cedar agent!

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What the new FICO scoring system means for homebuyers

Recently, FICO, one of the largest credit scoring companies in the world, announced that it will be rolling out a new credit scoring system in 2023. This new system, called FICO 10 T, aims to provide a more accurate picture of a consumer’s creditworthiness by taking a more holistic approach to credit scoring.

So, how will the new FICO scoring system affect home buyers? Let’s take a closer look.

What is FICO 10 T?

FICO 10 T is the latest version of FICO’s credit scoring system. It will use the same 300-850 point scale as previous versions of FICO, but it will take a more nuanced approach to credit scoring.

FICO 10 T will look at trends in a consumer’s credit behavior over time, rather than just their current credit utilization and payment history. This means that if a consumer has a history of responsible credit behavior, but experiences a setback like a missed payment or a high credit utilization rate, their score may not be as negatively impacted as it would have been under previous FICO scoring systems.

Additionally, FICO 10 T will differentiate between consumers who have revolving credit (like credit cards) and those who have installment loans (like mortgages or car loans). This is designed to recognize that consumers who have successfully managed installment loans may be better credit risks than those who only have revolving credit.

How will FICO 10 T affect home buyers?

The new FICO 10 T scoring system could have several impacts on home buyers.

First, consumers who have a history of responsible credit behavior but have experienced a setback (like a missed payment or high credit utilization rate) may see less of a negative impact on their credit score under FICO 10 T than they would have under previous FICO scoring systems. This could make it easier for these consumers to qualify for a mortgage or secure a better interest rate.

Second, consumers who have successfully managed installment loans (like mortgages) may see a boost to their credit score under FICO 10 T. This could make it easier for these consumers to qualify for a mortgage or secure a better interest rate.

Third, lenders may be more willing to work with consumers who have less-than-perfect credit under FICO 10 T. This is because the new scoring system takes a more nuanced approach to credit scoring and recognizes that consumers who have had setbacks can still be good credit risks.

FICO scoring system and homebuyers

The new FICO 10 T scoring system could be good news for home buyers. Consumers who have a history of responsible credit behavior may see less of a negative impact on their credit score if they experience a setback, and those who have successfully managed installment loans may see a boost to their credit score. Additionally, lenders may be more willing to work with consumers who have less-than-perfect credit. However, it’s important to remember that credit scores are just one factor that lenders consider when evaluating a mortgage application, and other factors like income and debt-to-income ratio will also play a role in the lending decision.

Interested in starting the home buying process? Click here to connect with a Sage & Cedar agent!

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5 hidden costs of buying a home

Closing Costs

Closing costs are fees that are paid at the time of closing, which is when the sale of the home is finalized. These costs typically include fees for things like the title search, appraisal, and legal fees. Depending on the cost of the home and the location, closing costs can be significant, and can range from a few thousand dollars to tens of thousands of dollars. It’s important to budget for these costs when you’re planning to buy a home.

Moving Costs

Once you’ve purchased your new home, you’ll need to move all of your belongings into it. This can be a significant expense, especially if you’re moving a long distance or have a lot of belongings. Some of the expenses you might encounter when moving include hiring a moving company, renting a moving truck, buying packing supplies, and paying for storage if you need to store your belongings temporarily.

Home Inspection

Before you purchase a home, it’s important to have it inspected by a professional home inspector. The cost of a home inspection can vary, but it’s generally a few hundred dollars. While this cost may seem like a lot, it’s worth it to ensure that you’re not buying a home with serious issues that could cost you thousands of dollars in repairs down the line.

Title Insurance

Title insurance is an insurance policy that protects you in case there are any issues with the title of the home you’re purchasing. This can include things like liens, easements, or other legal issues that could affect your ownership of the home. The cost of title insurance can vary, but it’s usually a few hundred dollars. While it’s not required by law, it’s highly recommended that you purchase title insurance to protect yourself in case there are any issues with the title.

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