What The Lingo Means: First Time Home Buyer

doug • May 8, 2019

Home Buyer

A first time home buyer can have a great experience by understanding all the lingo. The market in the Upstate of South Carolina is bursting at the seams with young dreamers hoping to make their first home purchase. Renters all over the country are looking to buy, but are instead experiencing the stony truth of the housing shortage across the nation.

According to the Wall Street Journal , 22 of the 50 states in the continental U.S. have built too few houses to keep up with economic growth since 2000. Home construction per household remains near the lowest level within the last 60 years! This creates an unavoidable problem for a new generation that just wants a place to call their own.

If you’re looking to purchase your first home, it’s important to know the lingo! No matter what stage you’re at in the home-buying process, the terms I’ve defined below will help as you learn how to make an offer you’re comfortable with and that the sellers will love. A real estate agent will reference these definitions, it’s nice to understand the ‘simple’ answer.

First Time Home Buyer

THE MONEY

Mortgage

A mortgage is a loan agreement between you, the home buyer, and a bank or other creditor. They lend you the money and you get a home. To repay the bank or creditor for providing this money, the home buyer agrees to pay back the amount they borrow to purchase the home (the principal) plus an additional amount of money as interest

A helpful Loan Calculator is located at http://www.calculator.net/loan-calculator.html

You can change the repayment terms on a loan by choosing a 15-year fixed rate mortgage instead of a 30-year fixed rate mortgage, which means you’ll pay off the loan principal and accrued interest in 15 years instead of 30. This will increase your monthly payment, but will decrease the total amount of interest you pay over the life of the loan. Note: there are many different types of mortgages! While I only mentioned a 15-Year and 30-Year Fixed Rate Mortgage, there are also variable rate and alternative loan programs like FHA (Federal Housing Administration) and VA (Veteran Affairs).

Down Payment

A down payment can be burdensome to a first time home buyer. It is a percentage of your home’s purchase price that you pay up front when you close your home loan in addition to the money you borrow. Lenders often look at the down payment amount as your investment in the home. Not only will it affect how much you’ll need to borrow, it can also influence:

Whether your lender will require you to pay for private mortgage insurance (PMI). Typically, you’ll need PMI if you put down less than 20% of the home’s purchase price.
What type of loan is best suited to you, such as a fixed-rate or adjustable-rate mortgage.
Your interest rate. Because your down payment represents your investment in the home, your lender will often offer you a lower rate if you can make a higher down payment.

Private Mortgage Insurance (PMI)

Home Buyer

If you are unable to pay 20% down on your home purchase, private mortgage insurance may be required by your lender. PMI is a special type of insurance to protect a lender (the bank or creditor) against loss if a borrower (you) defaults on your obligation to repay the loan. This type of insurance is costly and is not required if you can afford a 20% down payment.

Even if your lender requires you to obtain PMI, you may not need to carry the PMI over the life of the loan. Check w/ your lender about your options to terminate the PMI once you have achieved a specified level of equity in your home.

Appraised Value

Many lenders require a formal appraisal by a licensed appraiser to ensure the value of your home is at least as great as the purchase price. This appraisal occurs between when your offer is accepted and when you close on the house. While you may have offered $180,000 on a house, if the appraiser returns and says the house is worth $170,000, you either have to pay that $10,000 difference in cash or ask the seller to reduce the purchase price to $170,000.

Learn more about what to do if your home appraised lower than the purchase price here.

Earnest Money

Earnest money is submitted with your offer to demonstrate your intent to follow through with the sale if your offer is accepted. The appropriate amount of earnest money varies from market to market; your realtor can advise on what is customary for your situation. Earnest money can be handled in many ways; the following are common scenarios:

Allocated to Down Payment or Closing Costs: If all contingencies on your offer are met and you proceed with the purchase of the home, you can allocate this earnest money to your down payment or closing costs.
Reclaimed: If one or more contingencies on your offer are not met, for instance the home appraises under offer price, or it fails inspection, you typically allowed to reclaim your earnest money.
Say ‘Goodbye’ (Surrendered): If all contingencies are met but you back out of the contract, you may not be entitled to get your earnest money back.

Closing Costs

These are the costs incurred for the various expenses involved in the home buying transaction like title insurance, loan origination fees and appraisal fees. These costs vary widely from transaction to transaction. Your realtor and lender can assist you with learning more about the closing costs for which you will be responsible, but you can safely assume an average between 2%-5% of the purchase price.

Remember, you as a buyer are responsible for paying your closing costs in addition to your down payment. So while you might have $30,000 saved up for a 20% down payment, you will also need additional funds to afford closing costs.

THE TACTICS

Closing Date

The closing date is the date sign all the documents necessary to officially purchase a house. This is typically about a month after your offer is accepted. However, do not confuse this date with possession date, which is defined below.

Possession Date

At closing, you officially own the property. However, you may have agreed in your purchase agreement to allow the former owners to keep possession of the property until a later date. This means that although you have paid the down payment, paid closing costs, and are now responsible for the mortgage, you still do not have the right to move into your new home.

Possession dates that don’t line up with the closing date generally occur because the sellers need time to find a new place to live. However, the buyer must agree to a later possession date as part of the purchase agreement in order for the seller to retain possession of the property after the closing.

Inspection

A home inspection is a non-invasive, examination of the condition of the house that is designed to identify any problem areas with the property. The home inspector typically looks for evidence of insect, water or fire damage that may affect the value of the property. They will likely check heating, cooling, electrical and plumbing systems. They also may check structural items like the floors, walls and ceiling as well as the roof and attic. If your house has a basement, it should be examined for leaks and to make sure it has the proper supports in place. Remember, a home inspection is an examination of the property’s condition, and is not the same thing as a home appraisal (see definition above).

If your inspector finds damage in the home, you may be able to negotiate that the seller fix the issues or agree to a lower purchase price.

Buying a house is complicated! But once you find the one that makes you feel at home, the headaches

Sold

seem to be worth it.

The post What The Lingo Means: First Time Home Buyer appeared first on Select Source Insurance Group.

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My Insurance Agent Saved Me $137,387

By Doug Stockman • April 15, 2025

TL;DR: Article Take Away - Don't just get the cheapest car insurance! A client who chose higher liability limits paid a little more monthly but avoided a $137,387 bill after causing a big accident. Investing in good coverage protects you financially when things go wrong. Talk to your agent about your options! Dodging a Huge Bill: How My Clie nt Became a Liability Limit Hero (and You Can Too!) Hey everyone, sit down, grab your drink, and let me tell you a cool story. It's about how one of my clients made a really smart choice with his car insurance and avoided a huge money problem! It all came down to something called good liability limits compared to state minimum limits. Now, I know what you might be thinking. "Insurance? Yawn! Just give me the cheapest one so I can watch more funny cat videos." And I get it! We all love a good deal, and saving money feels great. But when it comes to car insurance, skimping on coverage is like playing Russian Roulette with your bank account and other assets. If you don't have a high enough limit, you could end up paying out of pocket for damage you caused to someone else. Just because you have insurance doesn't release you for being responsible for ALL the damages. Investing in the right coverage is one of the smartest things you can do for your peace of mind and your wallet. Let me tell you about a guy we'll call Marcus. Marcus was looking for car insurance and, like many of us, he was hoping for the lowest price each month. He was looking at a plan that cost less than a cheap hotdog (and wouldn't have offered much protection at all!). Now, having the right agent can make all the difference in the world. I knew Marcus could be better protected. So, I didn't just give him the cheapest thing and say "bye-bye." We talked a bit. We had a friendly "let's-think-ahead" chat. I explained that while a low monthly cost might seem great at first, the amount his insurance would pay if he caused an accident was really low. It might not even cover a small crash. It's all about having enough protection for those unexpected moments. Have you bought a car recently? Have you noticed skyrocketing repairs and medical costs? "But I'm a good driver!" Marcus said, like a lot of people do. And maybe Marcus is a super good driver – that's fantastic! But you know what they say: stuff happens! Sometimes, even the best drivers can be in a situation where someone else makes a mistake, like texting and driving a large vehicle when you're nearby. So, I showed Marcus different choices. We talked about how much his insurance would pay if he accidentally hurt someone or damaged their stuff. I really encouraged him to get more coverage. Not because I want to buy a lot of avocado toast (even though I do!), but because it's the smart and safe thing to do with your money. Think of it as investing in your future security. It's like wearing a helmet when you ride a bike on a rope over hungry crocodiles – a little extra protection can make a huge difference! Marcus was smart and thoughtful. He listened to what I said and realized the value of having better coverage. He decided to pay a little more each month to get much better protection (and it wasn't that much more). This was a really positive step for him! A few months later, guess what? Something bad happened. Not a monster truck, thankfully, but a pretty big car crash with a lot of cars. Marcus was responsible for paying for some of the damage to other cars and some people getting hurt. This is where Marcus' wise decision really paid off. Now for the exciting part! The first guesses for how much all the damage and doctor bills would cost were HUGE. Like, "make a lottery winner nervous" huge. It was a really serious situation. But because Marcus had listened and bought the higher limit insurance, his insurance company paid for almost all of it! What a relief! How much money did Marcus almost have to pay out of his own pocket if he had bought the cheap state minimum or other low liability insurance? A whopping $137,387. That's a life-changing amount of money! Think about that! One hundred and thirty-seven thousand, three hundred and eighty-seven dollars! That could be a down payment on a small castle, a lifetime of fancy coffee, or just really cause a lot of financial stress. And the extra insurance only cost less than $30/mo. Instead, Marcus just had to deal with the insurance claim (which was still a bit annoying, but not a disaster). He didn't have to sell his house, create a GoFundMe account, ask for the church offering plate to be passed, or spend years paying off bills. He was protected! So, the point of this story is: accidents are no fun, and we all hope they never happen. But being prepared with the right insurance can make a huge difference in how you handle those unexpected moments. The limits on your policy is all it is going to pay. If the damages are more, it has to come from somewhere. Choosing the right coverage isn't about spending more, it's about making a smart investment in your future security. Car insurance isn't just something you have to get. It's something that really protects your future money and gives you peace of mind. Those limits on how much your insurance will pay? They're like your shield against bad things happening on the road. Having good liability limits is like having a strong safety net. So, do yourself a favor. Don't just look at the price each month. Talk to your friendly, independent insurance agent at Select Source Insurance. We're here to help you understand your options and make the best choice for you. Understand how much protection you're getting. Think about what could go wrong. And please, make a wise choice now so you don't face a big financial worry later. You might not end up saving exactly $137,387, but knowing you're covered well? That feeling of security is truly priceless. Now, if you'll excuse me, I'm suddenly really hungry for avocado toast. It's just part of the job!

Why is Car Insurance so Expensive?

By Doug Stockman • April 9, 2025

tl;dr Why Car Insurance is Pricey: Expensive Accidents: Repairs, medical bills, and lost wages drive up claim costs. Rising Healthcare Costs: Increased medical fees directly impact insurance payouts. Distracted Driving: More accidents due to distractions mean more claims and higher premiums. Costly Car Repairs: Modern, complex vehicles are pricier to fix. Factors Affecting Your Rate: Driving record, age, vehicle type, and location all play a role. Why is Car Insurance So Expensive? Car insurance is expensive. There's no getting around it. But why does it cost so much? The High Cost of Accidents One of the main reasons car insurance is so expensive is because accidents have become more expensive. When you get into an accident, there are a lot of costs involved. There's the cost of repairing your car has risen, the cost of medical care for you, any passengers, the other party and the cost of lost wages if they can't work. Insurance companies have to pay for all of these costs, which is why they charge high premiums. South Carolina is trending towards having higher rates. Let's do our part by driving safe to help reduce our costs. The Rising Cost of Healthcare The cost of healthcare is also on the rise, which is another reason why car insurance is so expensive. When you get into an accident, you or the other party may need to go to the hospital or see a doctor. The cost of these services is only going to continue to rise, which means that insurance companies will have to charge more for their policies. The Increasing Number of Distracted Drivers Distracted driving is a major problem, and it's only getting worse. When people are distracted while driving, they're more likely to get into an accident. This means that insurance companies have to pay out more claims, which drives up the cost of car insurance. Follow Us on Facebook The Increasing Cost of Car Repairs Cars are becoming more and more complex and not to mention safety technology, which means that they're also becoming more expensive to repair. This is another reason why car insurance is so expensive. There are delays in South Carolina body shops and supply chain disruptions. When you get into an accident, it can cost a lot of money to fix your car. How to Keep Your Car Insurance Costs Down There are a few things you can do to keep your car insurance costs down here in the upstate. One is to shop around for the best rates. At Select Source Insurance we do the shopping for you. You can also get discounts for things like good grades, safe driving, and having multiple policies with the same company and many others. The Bottom Line Car insurance is expensive, but there are a few things you can do to keep your costs down. Shop around for the best rates, get discounts, and drive safely. A Few More Things to Keep in Mind Your driving record: If you have a clean driving record, you're likely to get a lower rate on your car insurance. Check your record for claims and tickets to make sure you are not being charged for errors. Your age: Younger drivers typically pay more for car insurance than older drivers. Your car: The type of car you drive can also affect your car insurance rates. Sports cars and luxury cars are usually more expensive to insure than other cars. One myth is if you have a red car your rates will be higher. This is false. Your location: Where you live can also affect your car insurance rates. If you live in a big city like Spartanburg, you're likely to pay more than if you live in a small surrounding town like Lyman or Inman. In Conclusion Car insurance is a necessary evil, but it doesn't have to break the bank. By shopping around for the best rates, getting discounts, and driving safely, you can keep your costs down. I hope this blog article has been helpful. If you have any questions, please feel free to leave a comment below or reach out to us at 864-585-8318. If you would like to submit your basic information to our private local website, we will quote your rates with the most competitive companies available. We do not sell your information, it is completely secure. Get a Quote Here Additional Tips: Get quotes from multiple insurance companies. At Select Source we do that for you. Ask about discounts for things like good grades, safe driving, and having multiple policies with the same company. Drive safely. Maintain a clean driving record. Consider getting a higher deductible. Take a defensive driving course. Use a rideshare service or public transportation when you've been drinking. Will Car Insurance Rates Go Down Who has the Cheapest Car Insurance Maximize Your Groove With Discounts South Carolina DMV

3 Seconds: The Time It Takes to Realize You've Ruined Your Day

By Doug Stockman • April 9, 2025

TL;DR: The 3-Second Rule: Why It's Not Just a Suggestion (And Why You're Not Vin Diesel). Three seconds is NOT an eternity: It's the buffer you need to avoid turning your car into a metal pancake. "Pro" drivers are delusional: Physics doesn't care about your ego; it cares about stopping distances. It's simple: Pick a point, count "one Mississippi, two Mississippi, three Mississippi." If you pass it too soon, back off. Those seconds give you time to process, react, and let your car do its thing. Chill out, count, and avoid awkward insurance conversations. Driving isn't a race, it's a shared journey to avoid metal-on-metal crime. Three Seconds: The Eternity Between "Oops" and "OH NO." Alright, buckle up buttercups, because we're diving headfirst into the thrilling world of the three-second following distance. Yes, that glorious, often-ignored rule that separates us from a symphony of crumpled metal and insurance adjusters. Let's be honest, three seconds on the road feels like an eternity. Especially when you're stuck behind someone who seems to be navigating too delicately. You're thinking, "Come on, buddy, I could knit a sweater in three seconds!" But, alas, the highway safety supreme being (and your insurance premium) demand we adhere to this seemingly endless time gap. Both following too closely and texting while driving has added to the number of accidents in South Carolina in recent years. Ten Safety Tips for Driving in the Rain The "But I'm a Pro!" Delusion We've all been there. You're a driving ninja. You can parallel park in a space the size of a postage stamp. You know the exact moment to hit the gas to catch that elusive green light. You're basically Vin Diesel, but with a slightly less impressive car and a significantly less impressive physique. So, three seconds? Pfft. Amateur hour. And really, does arriving at your destination 3 seconds later matter? Avoiding the nightmare of claims is definitely worth it. Don't become a South Carolina accident statistic. "I can react in a nanosecond!" you declare, as you tailgate a semi-truck during a monsoon. "Three seconds is for people who can't tell the difference between a brake light and a Christmas tree." Spoiler alert: You're wrong. And you're about to learn a valuable lesson in the physics of large, metal objects, sudden stops and metal accordions. The Reality Check: Physics Doesn't Care About Your Driving Ego. Here's the thing: even if your reflexes are lightning-fast, your car isn't. It needs time to respond. And those three seconds? They're not just some arbitrary number a bored traffic engineer pulled out of thin air. They're a buffer. A safety net. A "Hey, maybe don't turn your car into a metal accordion" zone. The 3 second rule works for every speed whether you are traveling at 15 mph or 60 mph. Imagine this: the car in front slams on their brakes. Why? Who knows? Maybe a squirrel decided to audition for "American Ninja Warrior" by crossing the highway. Maybe they saw a particularly enticing roadside taco stand. Whatever the reason, they've stopped. Now, you have three seconds (or less, if you're a "pro") to react. Those three seconds give you: Time to process: "Wait, are those brake lights? Are they serious?" Time to react: "Okay, foot, move to the brake pedal! Now!" How much time does that take? I tried to calculate the time and it is slow. Time for your car to react: "Engaging anti-lock brakes! Please hold while I calculate the optimal stopping distance." Without those precious seconds, you're just a passenger in a metal projectile, headed for a very expensive collision. The Actual Technique (Because, You Know, Safety) For those of you who haven't memorized the driver's manual (and let's be honest, who has? I definitely have not.), here's the lowdown on the three-second rule: Pick a stationary object: A sign, a pole, a particularly grumpy-looking squirrel. When the car in front passes it, start counting: "One Mississippi, two Mississippi, three Mississippi." I slow this count also. If you pass the object before you finish counting, you're too close. Back off, buddy. Back. Off. The Moral of the Story: Chill Out and Count. Follow Us on Facebook Driving isn't a race. It's a delicate dance of metal, momentum, and the shared desire to get to our destinations without becoming a viral road rage video. So, take a deep breath, relax, and give yourself (and everyone else) a little space. Have you ever seen a stop light change to green and the car in front of you races to the next light. You can see clearly that the next light ahead just changed to red. Why are we racing to get to it? Also, if you are following too closely, and can't see what's in front of the car in front of you, be prepared for an accident. If the car in front stops suddenly or moves to another lane to avoid the stopped car in front of it, you won't have enough time to react and hit the stopped car. Several years ago, this happened to me. The 3 second rule works. Those three seconds might feel like an eternity, but they're the difference between a smooth ride and a very awkward conversation with your insurance agent. And trust me, nobody wants that. And besides that, it is less wear and tear on your car. Following to close, means using your brakes more often. I don't know if you have paid for a brake repair job lately, but it is not cheap. Can Car Insurance Drop You? What Does Car Insurance NOT Cover ? Top Ten Car Insurance Terms You Need to Know