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Orange County Real Estate: Terms You Need to Know When Buying New

Whether you are buying your first home in Orange County or bought a home in the past, you are likely rusty on your real estate terms. When visiting new home communities to tour models or talking to your Realtor about the Orange County real estate market, various real estate terms will come up. According to an article by Redfin, everyone should know certain real estate terms. For those looking for single-family homes in Southern California, expand your real estate vocabulary as well as your imagination. Consider residential homebuilders such as Brandywine Homes that build modern and innovative homes, setting trends in the U.S.

Infill builder

An infill builder is a residential home builder that often converts outdated strip malls, empty warehouses and abandoned parking lots into hip, modern housing. Many infill builders bring life back into transitional neighborhoods by working in partnership with city officials, contractors and investors to rebuild a neglected area. According to a piece by The California Infill Builders Federation, infill development provide convenient and attractive neighborhoods for residents.

Move-up buyer

A move-up buyer or step-up home buyer is someone who has owned a starter home in the past, but wants to upgrade. Move-up buyers often have equity in the home they sold, which helps them afford nicer real estate. Some first-time buyers buy in the same neighborhoods by putting down a hefty down payment or due to their excellent income and credit. A report by CNBC points out the real estate market depends on move-up buyers to sell their older, starter homes to younger buyers.

Fixed rate mortgage

When it comes to financing your new construction home in Orange County, you need to choose a mortgage unless you pay with cash. A fixed rate mortgage means you will have the same interest rate for the entire length of the loan. In contrast, an adjustable rate mortgage can fluctuate depending on changes to the prime rate set by the Federal Reserve. If you plan to stay in a home for less than 5 years, you can get an ARM (adjustable rate mortgage) that provides a fixed rate for five years before converted to an adjustable rate.

An approval letter

Most new home sales consultants expect you to have a pre-approval letter from a lender to start the process of buying a home. However, you are free to tour new home models and get an idea of what you want before seeing a lender. When your lender grants you a pre-approval letter, it means you have a general idea of your budget based on what the lender will let you borrow. Soon after deciding on the home you want, you should become pre-qualified by a lender, according to an article by about the frustrations of falling in love with a home you can’t afford.

The closing

Just as you go to a closing when you buy a resale home or existing property, you also go to a closing to buy a new construction home. Closing costs often cost 2 to 5 percent of the purchase price of a home. A good faith estimate from your lender should detail the closing costs such as loan processing fees, title insurance and taxes. After closing, you officially own the home.

Escrow account

When you get a mortgage, you will likely see separate amounts for the mortgage itself versus the property taxes and home owners insurance. An escrow account is separate from the mortgage even though it’s often included on the same bill. The escrow pays for expenses that fluctuate. Your property taxes and insurance can go up or down each year, which changes your monthly payment.

When you pursue new Orange County real estate, you have a lot of choices to make. You can choose a floor plan. It’s up to you whether you prefer a floor plan with deck or a plan with more or less square footage. In terms of interior features, ask your sales representative for details about options such as oversized designer tiles, oval soaking tubs, natural maple cabinetry, granite countertops and designer fixtures. You can also learn about ways to personalize your home or make it more energy-efficient.

Brandywine Homes, a pioneer in urban redevelopment, builds inspired homes in Los Angeles and Orange counties. For more information about our OC real estate or to get on an interest list, please contact us.