If you are a first time home buyer in Charleston, SC or any city for that matter, you need to know clearly what is required of you financially. Often I see first time buyers woefully ill-prepared for the amount of cash required to purchase a home. They often think that certain programs for first time home buyers will help them. There are programs that do exist to help with down payment assistance, such as State Housing and Palmetto Heroes. However, it is more typical to incur the normal buyer’s cost.
First Time Buyer’s Downpayment:Unless you are a veteran, the least amount of down payment required is 3.5% of sale price.
First Time Buyer’s Closing Costs: In addition to your downpayment, closing costs can run between 3 and 4% of sale price.
First Time Buyer’s Prepaid Items: In addition to these two items, there are prepaid items. Prepaid items include: 14 months of hazard insurance coverage, 4 months of property taxes, and interim interest. Interim interest is prepaid interest that is charged on a per day basis beginning with the closing date until the last day of the month.
First Time Buyers Monthly Payments:
The monthly payment is not limited to principle, interest, taxes and insurance. There are other items: PMI or MIP is added to the payment. This stand for Private Mortgage Insurance or Mortgage Insurance Premium. If your down payment is less than 20%, this charge is required. It is credit driven and ranges between $75 and $20 per month depending on the size of the loan and your credit score.
I work very hard to educate my first time home buyers and make sure there are very few “surprises” that first time buyers run into on my watch. If you are a first time home buyer in Charleston or the surrounding area, it is imperative that you have a capable SC real estate agent walking you through the process.