Are you a first-time homebuyer looking to put down roots in the greater Columbia, SC area? Since rental rates continue to rise and mortgage interest rates remain low, now is the perfect time to take the leap into homeownership. Purchasing your first home will undoubtedly be one of the most important milestones in
your life and if you’re not properly informed about the home buying process ahead of time, this can quickly turn into an overwhelming experience. Fortunately for you, The Padalino & Guram Team has over 45 years of combined experience and expert knowledge of the local real estate market to help you find the home of your dreams. Take a look at our home buying tips below so we can help you navigate the process from pre-approval to closing with the least amount of worry.
Know Your Budget
Your initial step as a first time homebuyer should be to contact a mortgage professional to help you determine what price home you can afford. When you provide the lender with some basic information about your financial history and allow them to run your credit report, they will issue you a pre-approval letter stating the loan amount you are eligible for. Although having a pre-approval letter does not guarantee you financing, it does prove to the seller that you are a credible buyer when you are ready to make an offer on a property. Although you will not officially apply for the loan until the seller has accepted your offer on a home, you will want to start gathering the following documentation ahead of time to ensure that there are no holdups with the financing process:
- Two most recent pay stubs
- W-2 forms for the past 2 years (1099 or P&L statement if you are a business owner)
- Federal tax returns for the past 2 years
- Last 2 months bank statements
- List of your current debts (credit cards, student loans, child support, etc.)
If a lender pre-approves you for a larger amount than you were expecting, it is important that you do your due diligence to make sure that you can actually afford a mortgage of that size. Our Mortgage Calculator is a great tool for determining what your monthly mortgage payments will be. Keep in mind that you will also need to take additional expenses into account such as property taxes, homeowners insurance, utility bills, HOA fees if applicable, flood insurance, etc.
Understand Your Loan Options
Now that you’ve been pre-approved and have a general idea of what price home you can afford, you should be aware of the most common types of loans that will be available to you.
– Qualified veterans and their spouses are eligible for this VA backed loan which does not require a down payment (there is a small funding fee that is generally between 2% and 3% which can be rolled into the loan amount). In order to qualify for this type of loan, you must present a valid Certificate of Eligibility, furnish proof of military service (DD214), and the property in question will also be subject to an inspection and appraisal that must meet VA guidelines.
– Not much of a city guy or gal? Ask your lender if they can provide this type of loan if you plan on moving to a rural area. Like a VA Loan, a USDA Loan offers 100% financing, which means no down payment is required. Click here to see if the property you’re considering purchasing is in a USDA eligible area.
– FHA-backed loans are available to veterans and non-veterans with a minimum down payment of 3.5%. Although these types of loans are great if you do not have a lot of money saved up for a down payment or have a lower credit score (minimum score of 580 required), the main caveat is the Mortgage Insurance Premium (MIP) that comes along with this type of loan to protect the lender in the event that the borrower defaults on the loan.
– This type of loan is not government insured or guaranteed and requires a minimum credit score of 620 for approval. If your down payment is less than 20% you will be required to carry Private Mortgage Insurance (PMI) on the loan. Once you’ve built up 20% equity in your home, however, you can contact your lender and request the removal of the PMI from your monthly payment. This will most likely require a new appraisal to indicate the current value of the home.
Start Your Home Search
Now that you’ve gotten your finances in order it’s time to hone in on the community and neighborhood where you wish to purchase your first home. Whether you are looking for a home in Columbia, Lexington, Irmo, Chapin, or a beautiful retreat on Lake Murray, The Padalino & Guram Team will take all of your needs and wants into consideration and present you with multiple options to choose from within your desired price range. Once we’ve found your dream home, we will handle the entire negotiation process until your offer is accepted.
Click here to view all of our available properties.
Closing the Deal
<img class="size-medium wp-image-8627 alignleft" src="http://yourworldrealestate.com/wp-content/uploads/2016/04/photo-1450101499163-c8848c66ca85-300×200 best appetite suppressant pills.jpg” alt=”photo-1450101499163-c8848c66ca85″ width=”300″ height=”200″ srcset=”http://yourworldrealestate.com/wp-content/uploads/2016/04/photo-1450101499163-c8848c66ca85-300×200.jpg 300w, http://yourworldrealestate.com/wp-content/uploads/2016/04/photo-1450101499163-c8848c66ca85-768×513.jpg 768w, http://yourworldrealestate.com/wp-content/uploads/2016/04/photo-1450101499163-c8848c66ca85-1024×683.jpg 1024w” sizes=”(max-width: 300px) 100vw, 300px” />After your offer is accepted, it is in your best interest to get a home inspection to determine if there are any major problems that the seller will need to repair before you move forward with the purchase of the home. Keep in mind that you will have to set aside additional money for this, as home inspections typically range from $250 to $500 depending on the size, age, and foundation type of the house. In the state of South Carolina, you will also need to have a termite inspection performed on the property and will need to furnish a CL-100 letter at closing. Again, the price will range based on the size and foundation type of the home, but can generally range between $100 – $200. Additional expenses including closing costs and attorney’s fees will be provided to you prior to the closing which is the final step in the process before you can call the property your own!
Contact us today to start the search for your first home.