Have You Saved Enough for Closing Costs?

There are many potential homebuyers, and even sellers, who believe that they need at least a 20% down payment in order to buy a home or move on to their next home. Time after time, we have dispelled this myth by showing that many loan programs allow you to put down as little as 3% (or 0% with a VA loan).

If you have saved up your down payment and are ready to start your home search, one other piece of the puzzle is to make sure that you have saved enough for your closing costs.

Freddie Mac defines closing costs as:

“Closing costs, also called settlement fees, will need to be paid when you obtain a mortgage. These are fees charged by people representing your purchase, including your lender, real estate agent, and other third parties involved in the transaction. Closing costs are typically between 2 and 5% of your purchase price.”

We’ve recently heard from many first-time homebuyers that they wished that someone had let them know that closing costs could be so high. If you think about it, with a low down payment program, your closing costs could equal the amount that you saved for your down payment.

Here is a list of just some of the fees/costs that may be included in your closing costs, depending on where the home you wish to purchase is located:

  • Government recording costs
  • Appraisal fees
  • Credit report fees
  • Lender origination fees
  • Title services (insurance, search fees)
  • Tax service fees
  • Survey fees
  • Attorney fees
  • Underwriting fees

Is there any way to avoid paying closing costs?

Work with your lender and real estate agent to see if there are any ways to decrease or defer your closing costs. There are no-closing mortgages available, but they end up costing you more in the end with a higher interest rate, or by wrapping the closing costs into the total cost of the mortgage (meaning you’ll end up paying interest on your closing costs).

Home buyers can also negotiate with the seller over who pays these fees. Sometimes the seller will agree to assume the buyer’s closing fees to get the deal finalized, which is known in the industry as ‘seller’s concession.’

Bottom Line

Speak with your lender and agent early and often to determine how much you’ll be responsible for at closing. Finding out you’ll need to come up with thousands of dollars right before closing is not a surprise anyone is ever looking forward to.

Related Reading:

Getting Ready to Get Ready

Avoiding Failure When Getting a Mortgage

 

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5 Reasons to Consider a FHA Loan When Buying a Home in Anderson SC

Even if homes are affordable in Anderson SC, I still wouldn’t call them cheap. But if you’re determined to buy a house, the FHA home loan program can help. This loan program is ideal for first-time buyers or anyone with a low income.

Why Should You Consider an FHA Mortgage?

Here are just a few ways you’ll benefit from these government-backed mortgages.

You Can Buy a Home in Anderson With Just 3.5% Down

Yeah you read that right…

Some lenders typically require you to pay 20% down on your mortgage, or 5% if you have good credit and agree to pay mortgage insurance premiums.

Saving up 20% means squirreling away a pretty big sum of money! And for a lot of people even a 5% down payment is an unrealistic burden. By using an FHA mortgage, you can be approved for a loan with a down payment as low as 3.5% – which means a $100,000 home can be bought with only a$3,500 down payment ( just don’t forget you need more for closing costs, inspections, etc, etc ).

You Can Get A Mortgage Despite A High Debt-To-Income Ratio

If you have a high debt-to-income ratio, it will be very hard to get a standard mortgage. Most of the time, the banks will want to see that your mortgage costs will consume no more than 28% of your income,

And the banks will also want your total payments for debts from all sources isn’t more than 36% of your income. But with an FHA loan, you can get a mortgage with a 29/41 ratio.

You Can Buy a Home in Anderson South Carolina With A Low Credit Score

If your credit score is under 700, you’ll pay higher interest rates on typical mortgages, And if your credit score is below 660, you may not be able to get a mortgage at all.

But the good news is that with an FHA mortgage, you can get approved for a 3.5% down payment with a credit score as low as 580 – or lower, if you agree to a 10% down payment!

Closing Costs Are Better For Low-Income Buyers Using a FHA Mortgage

FHA loans have different closing cost regulations than traditional mortgages. With an FHA loan, you can bundle closing costs into the mortgage or even use gift funds for 100% of the closing costs. There are strict rules/regulations and you will need to talk to your lender to make sure you cross all the t’s and dot all the i’s!

A FHA Mortgage Ensures You Buy A Good House

With other mortgages, you can buy any home you want as long as it is within a set price range.Even if it is a flaming bag of poo!

But when you buy a home in Anderson using a FHA loan, the home you buy must be a quality home. This means it must be habitable, sanitary, and safe because otherwise the FHA won’t approve your loan.

Using a FHA mortgage is a great way to buy a home. Especially if a traditional mortgage isn’t an option for you.

Home Buyer and Seller Trends 2017

2017-home-buyer-and-seller-generational-trends-infographic-03-07-2017-600w-1197h

 

An improving economy, multiple years of strong job growth and the notable increase in home values in most markets fueled a greater share of purchases from Generation X households over the past year.

This is according to the National Association of Realtors® 2017 Home Buyer and Seller Generational Trends study, which evaluates the generational differences of recent home buyers and sellers. The survey additionally found that a growing number of millennials and younger boomer buyers have children living at home; student debt is common among Gen X and boomer households; more millennials are buying outside the city; and younger generations are more likely to use a real estate agent.

 

Read the rest here

What Would a Millennial Baby Boom Mean for Housing?

 

Recently released data from the National Center for Health Statistics revealed that 1.3 million Millennial women gave birth for the first time in 2015. There are now over 16 million women in this generation who have become mothers.

“All told, Millennial women (those born between 1981 to 1997) accounted for about eight in ten (82%) of U.S. births in 2015.”

The data also shows that this generation has waited until later in life to become parents as only 42% of Millennial women were moms in 2014, compared to 49% of Generation X at the same age. A Pew Research Center article discussing the data, points to social influences that may have contributed to the delay:

“The rising age at first birth is hardly limited to the Millennial generation. It has been a trend since at least 1970. Many factors may contribute, including a shift away from marriage, increasing educational attainment and the movement of women into the labor force.”

Do Millennials Want to Be Parents?

“While Millennials may be delaying parenthood, it’s not for a lack of interest in eventually becoming moms and dads. Members of this generation rated being a good parent as a top priority in a 2010 Pew Research Center survey.

Some 52% said it was one of the most important goals in their lives, well ahead of having a successful marriage, which 30% said was one of their most important lifetime goals.”

So, What Does This Mean for the Housing Market?

As Jonathan Smoke, Chief Economist for realtor.com explained: “At any given time in our history, demographics would explain 60-80% of what’s happening [in the market], and we are in a period of time where Millennials make up a largest demographic group.”

As more and more Millennial families are formed, this generation will shift their focus to providing the best home for their children to grow up in, the best school districts, and often to the stability that owning a home of their own provides.

Two-thirds of Millennials have not yet reached the average first-time home buying age of 32, as reported by the National Association of Realtor. The homeownership rate amongst Millennials has nowhere to go but up!

Bottom Line

Millennials as a generation have delayed traditional social norms until later in their lives. Whether getting married, having children or buying a home, the desire to provide for their family is still there, even if it takes a little while longer than it did for previous generations.

It Has Been Way Too Long!

Wow it has been some time since I posted here. I guess I have been too busy posting on my website. Hard to spread the awesomeness to every corner of the internet but I guess I shouldn’t neglect posting here.

Speaking of awesomeness, I just posted the latest real estate market snapshots over on my website and hope you check them out:

Not going to make any promises but I am going to try to start posting here more often. Just so many hours in the day and sad to say I have neglected posting here. Hope you have an awesome day and don’t forget it is Mother’s Day!

What’s Happening 7-3-13

Well I hope you are ready for the 4th. And I hope it doesn’t rain. It has been some time since I posted here but I have been super busy. Plus I figure if you want to read my blog posts you will go directly to the source. Like today I wrote a post that was inspired by an email I had received lately.

It was from someone that wanted to buy a home but has bad credit. Do you want to buy a home but have a low credit score? Well read tips on how to raise your credit score at

Slow Down Buckaroo

Mark Brian

UGLYBUTHONEST.COM

 

search real estate listings in the Anderson SC area

 

real estate estate blog Upstate South Carolina
 

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Will No One Sell a $40,000 Home Anymore?!

It was funny how before the melt down in real estate that some agents turned their noses up at the types of homes I sometimes sell.

So to answer the question in Tammy’s blog:

I have…

I am…

I will!

In my opinion, there are 2 types of buyers for $40,000 homes. Either investors that know what they are doing and are looking to either buy and hold or flip a home. Or the buyer is on a budget and every dollar is important to them. More than likely they have worked hard to save up a down payment and are very cost conscious.

Now there are some down sides to selling $40,000 homes. There are plenty of people that want to buy a home but simply cannot because they cannot get a mortgage. It does not matter how badly you want to buy a home. If you do not have the money to pay for the home OR the ability to get a mortgage, then there is nothing I can do to help you.

So it is different type of business selling homes that many agents turn their noses up at. The frustration of dealing with these homes can be quite large. The plethora of idiots that are determined that they can somehow buy a home with crappy credit and no money also gets old after doing it for several years.

So yes it is a challenge.

But like I said…

I have…

I am…

I will!

Check out Tammy’s blog below:

I write for a lot of real estate companies and brokerages and those agencies and individuals are always looking to market the high-priced properties. Of course, why wouldn’t we? The commission on a $300,000 house is much higher than a $50,000 house but then, people still are buying $50,000 houses right?poor service with low home prices?

I once worked for a real estate broker as his buyer’s agent and unfortunately I was disappointed to see really poor service when he had to help a couple buy a $120,000 house especially when he had buyers looking at $5-$600,000 houses. They even could tell the difference. But, people have to start somewhere, right? Not all of us can afford a half-million dollar house.

Many real estate searches and customizable IDX pages will allow you to set a list of properties to start at a certain price and most agents and brokers want that price to be at least $100,000 or more depending on the neighborhood and their target market. Of course, anyone can go into an advanced property search and type in a $50,000 home or property and get a variety of listings but then are they going to get the same service when it comes time to buying or selling a house for this price range?

Granted, I get it, you put about the same amount of work into a $50,000 sale as you would a $500,000 sale as far as showing the property and writing up a purchase and sale agreement but when did we stop caring about the family the needs to buy or sell a home price under $100,000?

What about you? Do you put the same care and attention into a home buyer that means a lower-priced property versus one that $4-$500,000? If not, who’s buying these properties and how are they doing it?

 

ActiveRain and SEOTammy Emineth is an expert in custom content and original articles for blogs, website, press releases and more. Contact me anytime and feel free to subscribe to this blog to stay up to date on my latest blogs and informative information. Email me or contact me for Real Estate Website Marketing and SEO Content Writing.

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The information contained in this blog is believed to be true and correct and while every effort is made to assure that the information is as accurate as possible, the author of this blog, and its comments disclaim any implied warranty or representation about it’s accuracy for any particular purpose. All information is copy written and the property of Tammy Emineth.  

Mark Brian

UGLYBUTHONEST.COM

 

search real estate listings in the Anderson SC area

 

real estate estate blog Upstate South Carolina
 

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