More than one-third of home buyers last year were first-time purchasers, so there are a lot of newbies in the market.
There could be many more, says Brenda Daly, broker in charge of United Real Estate Aiken.
“Too many renters think they can’t afford to buy a home, but often you can get a home with a monthly payment that is the same as what you’re paying in rent,” she says.
There are lots of myths and information gaps that keep viable buyers out of the real estate market. Here are five things first-time buyers should know:
1. You Can Afford to Buy
There are several down payment assistance programs that first-time buyers can tap. The South Carolina State Housing Finance and Development Authority Homeownership Program assists low- to moderate-income families with affordable mortgage loans and down payment assistance as available. There may also be help with closing costs.
The Palmetto Heroes program periodically offers attractive mortgages and down payment help to those working in certain public service professions, such as borrowers emergency medical services personnel, firefighters, law enforcement officers, nurses or nursing assistants, veterans or members of the South Carolina National Guard.
Active members and veterans of the U.S. Armed Forces and certain qualifying spouses are eligible for a VA loan, which requires no down payment. Expensive mortgage insurance isn’t necessary because the federal government backs the loan in the event of default.
2. Prequalify Now
Applying for a mortgage is a long process, and by the time you’re approved, someone else is likely to have snatched up the property. A more efficient way to shop is to get prequalified first, and then start looking for a home.
Prequalification is not the same as pre-approval, but it’s the first step toward getting approved. Having a prequalification letter shows sellers that you’re a serious buyer, and gives you an idea how much you’re likely to be able to borrow. It proves you’re a buyer with a realistic budget in mind.
3. Know What You Want
“Sometimes first-time home buyers have no idea what their taste or criteria are,” Daly says. “I have to figure it out through showings and use a process of elimination.”
Daly suggests driving around the neighborhoods you’d like to live in and taking notes on what you like and don’t like. After a while, you will get a sense of your architectural style; how much yard and privacy you want; brick versus siding versus stucco; and more.
4. Consider Maintenance
It’s easy to fall in love with the vintage charm of an older home, but before you make an offer on one, think about what it will take to keep such a home safe and compliant with local building codes.
“It’s not a ‘buy it and you’re done’ sort of thing,” Daly says. “There will be ongoing maintenance costs, and you need to be aware of them and build that into your budget.”
If you’d rather not have that headache, it may behoove you to consider a newer home with less intense upkeep, Daly says.
5. Small Changes Make a Big Difference
Most buyers want modern kitchens and bathrooms complete with granite countertops and stainless steel appliances. The problem is, first-time home buyers typically can’t afford a turnkey home. Don’t let that be a deterrent, Daly says.
“If you aren’t in a position to put in all new cabinets and countertops, smaller, affordable changes can really transform a room and give it a more updated feel,” she says. “New light fixtures, hardware or a new ceiling fan will go a long way.”
United Real Estate Aiken can help guide first-time buyers through the home buying process. It’s an excellent option for both buyers and sellers in and around Aiken, because the brokerage always puts clients first.
If you’re considering buying or selling a home, call United Real Estate Aiken at (803) 226-0120. Whether you’re a first-time homebuyer or a veteran who is upgrading, you’ll be happy you did.