First-Time Home Buyers: Are You Ready to Make the Move?
Buying opportunities for first-time home buyers in Myrtle Beach have never been better. Prices and interest rates are low; there is a wide selection of homes to choose from; and Congress is giving first-time homebuyers an added incentive – an $8,000 tax credit.
Twenty-three percent of adults plan to purchase a home in the next five years, and more than half of them (53.5%) are first-time home buyers, according to a survey commissioned by Move Inc., the operator of National Association of Realtors’ Realtor.com Web site.
Despite today’s challenging market conditions, 18.1% of adults plan to buy a home this year in order to take advantage of the $8,000 tax credit.
So… are you ready to make the move? You might be, if you:
1. Are familiar with the market. If you’ve been paying attention to how much houses are listed for in the neighborhoods you’re eyeing and have a realistic view of how much a house will cost you, you’re in good shape. But if you’re dreaming about that big corner house with no clue about its asking price, you may want to spend some more time becoming familiar with the market and how much houses are going for.
2. Have the money for a down payment and closing costs. The down payment is a percentage of the value of the property. Freddie Mac says the percentage will be determined by the type of mortgage you select. Down payments usually range from 3 to 20 percent of the property value. Also, you may be required to have Private Mortgage Insurance (PMI or MI) if your down payment is less than 20 percent. Closing costs include points, taxes, title insurance, financing costs and items that must be prepaid or escrowed and other settlement costs. You can expect to pay between from 2 to 7 percent of the property value. Generally, buyers will receive an estimate of these costs from your lender after you apply for a mortgage.
3. Know how much you can afford. Freddie Mac says that as a general guide, your monthly mortgage payment should be less than or equal to a percentage of your income, usually about a quarter of your gross monthly income. Also, your income, debt and credit history go into determining how much you can borrow. As a general rule, your debt — credit card bills, car loans, housing expenses, alimony and child support — should not be more than about 30 to 40 percent of your gross income.
4. Know what additional expenses will come with owning a home. This includes homeowner’s insurance, utility bills, and maintenance costs — roofing, plumbing, heating and cooling.
5. Have your credit in good shape and make sure your credit report is accurate. Potential lenders will view your credit history — how much debt you’ve accrued, how many accounts you have open, whether your payments are made on time, etc. — to determine whether they’ll give you a loan. You should get a report from each of the three credit reporting companies: Equifax, Experian, and Trans Union.
6. You haven’t made any recent major purchases, particularly a vehicle. If you do, you may have a harder time getting a loan — or it could potentially lower the amount you’ll be approved for.
2009 is a terrific time to buy property in Myrtle Beach, especially for first-time home buyers. If you are planning to purchase a home this year, check out my free “Guide for First-Time Home Buyers.” It has all the information you need to get you started. Click here to order.
Resources: Move.com and Realty Times
