The Columbia SC home buying market is showing no signs of slowing down. In a recent survey conducted by TD Bank, 56% of homeowners across the nation feel it’s a ”good time” to buy a home. If you’re among those that are ready to start the home buying process for the first time, there are a few tips we’d like to share that may make your search more enjoyable, less stressful and ultimately successful. Let’s take a look at some of the first-time home buyer “rookie mistakes,” and how to avoid them.
Columbia SC Home Buying: Things to Remember
Watch your finances before buying a house. Keep an eye on your credit. Remember, taking on too much new debt or making a large purchase like a new car prior to the loan closing is a very bad idea. Your debt-to-income (DTI) ratio is one of the major considerations mortgage lenders analyze before the final approval process. Most people aren’t aware that lenders regularly review all the financial criteria used in the loan underwriting again before the loan closing takes place to ensure nothing has substantially changed. So, if you’re contemplating a new purchase, make sure you wait until after you’ve closed your loan and moved into your new home. Even then, make sure you can afford that new car, new furniture or second honeymoon. The last thing you want to do is create a financial bind immediately after you’ve bought a home.
Get pre-approved for a mortgage before you start your home search. Often, first time homebuyers erroneously assume they can afford at least what they’re currently paying in rent. While that may be true, it’s best to sit down with a mortgage lender and get pre-qualified – that is, receive an early, non-binding commitment from the lender as to what they will likely be willing to loan you based on your credit score, DTI ratio and other lending criteria. Many sellers these days don't want their home being shown to anyone not already pre-qualified to purchase their home. Most real estate agents won’t show potential homes without a pre-approval.
Don’t choose the priciest home you can afford. Most real estate experts advise against buying the most expensive house you can find and qualify for right out of the gate. Remember, just because you can afford it doesn’t necessarily mean you should buy it. Home ownership often requires unexpected expenses as time goes on. Repairs, insurance premiums and deductibles, real estate property taxes and other potential surprises always come at the worst possible time. If you’ve spent all your savings for the down payment of your home, you may not have anything in reserve to take care of these or other homeowner emergencies.
Don’t prioritize the home over the neighborhood. It’s human nature for first-time homebuyers to get excited about the possibility of finding their dream home in the most popular neighborhood. Once they realize how far outside their budgets dream homes can be – especially in affluent markets – they often make the mistake of looking for that same dream home in a neighborhood that may not be as good.
Don’t be pressured, take your time and be smart. Another Columbia SC home buying tip for first-time buyers is to slow down and take your time. While in today’s often-hectic market many buyers have to act fast to get what they want, the key is not to be pressured into making a decision you may regret later. Educate yourself as to what’s available in the housing market and what the median sales prices are. Remember, knowledge is power, and the more you know about what you want and what you can expect in the real estate market, the better your chances of making a wise purchase.
Don’t rely too much on the Internet. The Internet has revolutionized the way prospective home buyers search for homes and get other information like mortgage financing tips, credit scores and more. However, it shouldn’t take the place of physically meeting or speaking with professional real estate agents, lenders and others during the Columbia SC home buying process.
Don’t forget to visit and revisit the house you want to buy. Remember, the location of your house is fixed and will never change. For that reason, visit the neighborhood at different times of the day and night to see what’s going on around you. Is there a particularly loud bar or music venue nearby that you weren't aware of? If the house is located near an airport, what’s the traffic like at various times of the day? The more visits you make to the house and the neighborhood, the more you’ll be able to know what it will be like if you buy.
Don’t skip the home inspection. Sometimes excited first-time home buyers think skipping the home inspection may be an easy way to save money. Besides, you’ve fallen in love with the home and there’s absolutely nothing that could possibly change your mind, right? Then you move in and are faced with maintenance or repair issues that could cost hundreds or thousands of dollars – a problem that may have been avoided with a home inspection.
Don’t be indecisive. While we mentioned above not to move too fast and take your time before making a decision to buy, it’s just as important to actually make a decision when you have to.
Some first-time home buyers run the risk of losing a chance to buy a particular property they like to another buyer if they don’t make a decision to act quickly. Although shopping around in the Columbia SC home buying market is usually a wise move, remember that indecision in a seller’s market means you probably won’t get the house you want.
Read more about home buying in the section of articles on Columbia SC Home Buying Tips just below Columbia SC Real Estate Categories in the column to your right. Remember, we also post tips daily on Facebook and Twitter. Check us out there, too.
The Columbia SC mortgage market is abuzz with talk about refinancing. With 30-year fixed rates approaching all-time historical lows many economists say this could be the best time ever to refinance your mortgage – even if it’s only a few years old with what was a great interest rate at the time. Recent turmoil over Great Britain’s departure from the European Union caused stock markets around the globe to nosedive. When the stock market is weak, interest rates generally stay low. As one analyst put it, “Financial turmoil can be awfully good for mortgage rates.” Let’s examine why it may be a good time to refinance and where Columbia SC mortgage rates may go from here.
Columbia SC Mortgage Activity: It’s All About Refis
Uncertainty in the market is causing investors to sell off their riskier global stocks in favor of safer U.S. mortgage bonds. Mortgage bonds are considered among the the most secure in the world market because they’re made up of home loans made in the U.S. following the most stringent guidelines in decades. When the bond prices go up, the bond yields or rates go down. When this occurs, it’s usually a good time to take a look at your mortgage and consider refinancing.
As an example, just a slight rate decrease of .25% would decrease your monthly payment by $42 on a $300,0000 mortgage.
While Columbia SC mortgage interest rates have been low for several years, many homeowners have recently gained a great deal of home equity, thanks to fast-rising home values. Not only are they eligible to refinance, but they may choose to access some of their new-found equity. The mortgage market may very well have a refinance boom similar to that from 2008-2014, when roughly 25 million borrowers refinanced their mortgages, according to a new report from the Urban Institute.
If you’re thinking of refinancing – and we think you should be – here are a few tips we recommend.
Make sure your mortgage lender is quoting you the correct rate. Rate quotes are dependent on your loan closing and finalizing in a certain number of days. If you need a longer rate lock period you’ll likely pay a higher interest rate. Should you find a rate quote that’s lower as you’re shopping around, ask the lender about their rate lock time period. Make sure they are able to close your loan within that timeframe.
Confirm the timing. As more people elect to refinance, Columbia SC mortgage lenders will get very busy. Ask your lender for confirmation that they’re giving you a rate quote that gives them enough time to close your refinanced mortgage. If they can’t do that, find another lender.
Remember your second mortgage (if you have one.) If you have a second mortgage on your home – even if it’s a Home Equity Line of Credit (HELOC) – the second mortgagee has to agree to the terms of the new first mortgage before you can close the refinance.
Prepare your documentation again. It may sound crazy, but even if you’re refinancing with your existing lender, the federal regulations require them to verify and update employment, income, asset and debt information all over again. So be prepared to go through pretty much the same process you did when you took our the previous mortgage loan.
What About Columbia SC Mortgage Costs?
You should make a point to discuss the break even point of refinancing with your Columbia SC mortgage lender. Refinancing usually costs between $2,000 – $4,000 depending on your market and the lender you choose. Typically, interest cost savings as a result of a refi should mean your break even point would be sometime between 2-3 years. Another tip to remember: a “no cost” refinance isn’t really free of any costs. The borrower is being given a slightly higher rate in order for your lender to, in effect, finance the closing costs. Ask your lender to help you with cost comparison analyses to find out what your costs are compared to what your interest rate savings will be. If you’re planning to sell your home sooner than the 2-3 year average break even period, you may want to rethink your refinancing plans.
Although yields on the 10-year Treasury bonds – which Columbia SC mortgage interest rates follow somewhat – will need to remain low for a while before mortgage rates drop markedly lower, it’s definitely worth watching rate activity and planning for a potential refinance.
Whether you ultimately elect to refinance your current mortgage or not, mortgage experts suggest you weigh your options carefully. If rates do continue to drop, they could possibly drop even more. Decide what rate you can best be satisfied with. Many times in falling rate markets, prospective borrowers keep waiting and waiting for rates to go lower. Then, when they begin to rise, an unprepared borrower may actually end up paying slightly more than he could have if he had acted quicker. Our suggestion: don’t be greedy. If you like the new interest rates once they fall – if they do – then refinance. If you’ve done your homework, you’ll still save money in the long run.
You can find more articles pertaining to the Columbia SC mortgage market in the Mortgage Info section of our site below Columbia SC Real Estate Categories in the column to your right.
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Columbia SC home prices may be in for another increase. On the heels of what has been termed an “epic housing crash” of just a few short years ago – when home values dropped nearly 35% – prices are on the rise again. In the past 12-18 months, many hot real estate markets have seen home price increases of as much as 10% or more, and home analysts expect additional new highs may be on the way. Let’s take a look at why prices may rise.
Columbia SC Home Prices May Cost More Soon
According to the National Association of Realtors (NAR), the median price of an existing home sold in May reached a record high of $239,700. The Association has been tracking prices since 1968. The home price increase is good news for homeowners who have their Columbia SC homes for sale now or who may be contemplating selling soon. In addition, it means many homeowners just earned a few thousand dollars in additional net worth.
For others, the rising Columbia SC home prices and the prognosis for further increases is anything but good news.
Lawrence Yu, chief economist of the NAR issued this warning about how the higher home prices may affect one segment of the potential home buying public. “We are seeing flashing yellow lights on affordability. People who are currently renting and want to convert into ownership — that’s a major difficulty," said Yun. "Columbia SC home prices are rising way too fast compared to people's income and wage growth.”
The median price increase in homes for sale means, in part, that there is more activity on the higher end of the real estate market. The median price is defined as the dollar amount where half the homes sold at a lower price and half sold at a higher price. Additional price indexes measure repeat sales of similarly-sized homes show nationwide that prices are still running roughly 10% below the peak levels from ten years ago.
Some housing analysts in their market assessment of Columbia SC home prices contend the tight inventory available continues to restrict sales and put pressure on pricing. Conversely, near-record low mortgage interest rates and job growth help create greater demand. The result, according to the experts, is a “pressure cooker effect” and the market’s release valve – new home construction – isn’t helping to solve the problem. That point is evidenced by new home sales currently performing more than 40% below normal market levels.
According to the Urban Institute, last year over a million new households were created in the U.S., but only 620,000 new housing units were created. That shortage of more than 400,000 units has put an undue strain on both rents and home prices. Analysts say that trend will likely continue in the near future unless there are relatively quick policy changes.
Although the housing market has made great strides in its recovery from the crash of less than a decade ago, affordability is the biggest factor restraining a more complete rebound. Normally, housing would be the driving force behind overall economic growth, but it’s not. That’s primarily due to less than exciting home construction activity. Most of the construction demand has been fueled by rental demand. But, housing starts for multifamily construction are slowing down. The previous activity was mostly found in urban rental centers where rents were higher than normal and the supply has caught up with or exceeded the demand.
While the number of renters still strapped by rising rents continues to grow, the burden of affordable rent payments prevent prospective home buyers from saving for a down payment. Even though the monthly payments on homes for sale may be more affordable than rent, renters who don’t have a down payment are unable to take advantage of that opportunity.
So, what does all this mean for the existing and future housing market? We will likely see Columbia SC home prices remain fairly high and continue to climb in some markets where sales have been brisk in the past few months. Limited supply meets high demand creating higher prices – it’s a basic economic law of supply and demand. Despite interest rates being at near-record low levels, the lending market is still considered tight by historical measurement standards. Some economists argue, in fact, that low interest rates have actually contributed to higher Columbia SC home prices, because home buyers are now able to qualify for larger houses.
At least in the foreseeable future, Columbia SC home prices will likely continue to see slightly higher listing and selling prices. The first-time homebuyer will probably continue to be unable or unwilling to enter the marketplace. And for a housing market that’s been labeled “recovering,” that’s a worrisome commentary on the real estate economy. What’s worse, as NAR chief economist Yun asked rhetorically, “We are facing housing affordability challenges already with low interest rates, but what happens when the rates begin to rise?
See more articles pertaining to homes for sale in the section of articles on Columbia SC Homes for Sale just below Columbia SC Real Estate Categories in the column to your right. And remember, we also post tips daily on Facebook and Twitter.
A Columbia SC home improvement project that’s often overlooked or not given enough attention is landscaping a brand new home. Maybe because you spent so much time, energy and money tending to every little detail finishing a new home requires, when it comes to landscaping many homeowners run out of steam. Ask yourself this question, “How many recently constructed homes have you seen where the landscaping leaves a lot to be desired?” Let’s take a look at a few helpful ideas that will help your new home’s curb appeal – without wrecking your budget.
Landscaping: Columbia SC Home Improvement Will Grow on You
So you’ve seen the light. You don’t want your brand new home to look like it was built on a desert wasteland. You’re excited to get started on your first Columbia SC home improvement project. Now, where to start?
If your home was custom built you may have slightly different challenges than if you bought a home in an established neighborhood of newly-constructed homes. Either way, your landscaping needs help. Follow these suggestions to either create or improve your new home’s surroundings.
Define Your Planting Beds
Most of your “lawn” is probably just plain, old dirt. Sure, it looks rich and fertile… after all, just take a look at those luscious green weeds growing wild. If you don’t remember anything else from this article, remember this: take our advice and make sure the soil you’re going to be planting your shrubbery, flowers and grass in is actually topsoil from a reputable source. Replacing existing fill dirt with topsoil will ensure that your lawn and planting beds will have a chance to grow and thrive – whether you have a green thumb or not.
After you’ve decided where you’d like the planting beds to be, mark them off using whichever method is easiest for you. Many Columbia SC home improvement experts recommend using a garden hoe to create a small, visible trench 3-4 inches deep around the planting beds. If you plan to sod your lawn, you can use the first few dozen pieces of sod to more closely define the planting bed boundaries. Be creative, don’t make the planting beds square or rectangular, take a page out of the professional landscape designer’s book and make them loose and flowing, serpentine with more rounded borders. You’ll find mowing the grass and edging around the beds will be easier by following that suggestion.
Know the Lay of the Land
Before you move too quickly, take a step back and envision what types of plantings you’d like and where they might look best. This is especially important for seasonal items like certain flowers, flowering shrubs, or even a small vegetable garden. Does the spot you’re considering planting receive lots of direct sunlight? Does it drain well? Anticipating what will grow best in the places you choose will make it easier when it comes time to plant.
Remove Undesirable Builder Plantings
The plants and shrubs your builder may have planted up against your house may appear unimportant now, but they could be a giant headache later. Columbia SC home improvement experts say you should properly identify any existing plants or shrubs to determine if they’re good choices for your landscaping. If you don’t like it or don’t want it where it is, dig it up and either relocate it or get rid of it. Do it while the roots are still young and haven’t taken hold – it will be easier now than later.
Do the same with any undesirable or unattractive trees that may have been planted. A tree with an abundance of leaves, flowers or fruit may create extra yard work, clog gutters and downspouts and stain your home, walkway or driveway.
Some plants and smaller trees may seem perfectly fine for now, but if they grow to be too large for their space or if they were planted too close to the house, they could become problems later. Take special care for some trees that may be planted adjacent to sidewalks, walkways or driveways. As they mature the tree roots may spread under the concrete or paved areas, causing cracks or raised areas that may be difficult and expensive to repair.
Follow the advice of one Columbia SC home improvement professional: “When in doubt, take it out.”
Think and Plan Ahead
If you’re considering doing some backyard landscaping for entertaining family and friends, consider this tip. Write down your biggest priority and what the focal point of the backyard will be. Chances are, if you have a patio or deck most of the entertaining will be focused there. Plan any future entertainment or other backyard additions as you envision your lifestyle changing and growing. Perhaps the makeshift sandbox will be replaced with a sturdy new swing-set as the kids get older. Maybe one day you’ll replace that gas grill you’ve had forever with a built-in version as you expand the deck. Wait… where are you going to put the swimming pool? The possibilities are endless, but chances are your lot lines aren’t – so be smart, plan ahead as best you can. It will save headaches and money in the long run.
Don’t Forget the Water
It could be the most important Columbia SC home improvement landscaping tip of all – be sure everything you’re planning to plant gets enough water. Whether you’re going to seed your lawn or sod it, plant your own shrubs and flowers or hire a professional, it sounds silly but nothing will grow properly without water.
Decide ahead of time if you’ll install an irrigation system. It’s usually a job that’s best done by professional irrigation installers with the proper equipment and tools. However, with some planning, a rented trench digger, proper PVC pipe, glue, sprinkler heads and an ample supply of time and patience, it can be a relatively easy Columbia SC home improvement project to undertake yourself. Another word of advice, leave the actual drilling for the water source from underground wells and the installation of the pump system to the pros. You’ll be much happier afterward.
Now that you have a game plan it’s time to spring into action. Your all-new outdoor landscape will be the perfect complement to your brand new home. Oh, and don’t forget to go buy a lawnmower, edger, rake, weed eater and a dozen other gardening tools you’ll need!
Read more about home improvements in the section of articles on Columbia SC Home Improvements just below Columbia SC Real Estate Categories in the column to your right. Remember, we also post tips daily on Facebook and Twitter. Check us out there, too.
The Columbia SC economy saw only modest increases in the past year in the cost of food, transportation and clothing. No doubt, with similar numbers nationwide this has helped millions of Americans cope with what can often be dynamic consumer price changes. These and other slight increases have helped many households in the U.S. make ends meet.
However, this is not the case for tenants who are in the rental market. The cost of housing has definitely continued to have a huge impact on their disposable income. Let’s take a look at how rising rents are affecting a large segment of the population.
Columbia SC Economy: Rents Going Up
Recent statistics released in the Consumer Price Index clearly shows signs that rents have skyrocketed in the past few years. The Consumer Price Index reflects the differences from one month to the next in major spending categories. In May, 2016 – for the second consecutive month – the increase in rental income was nearly 4%, almost four times the total inflation rate of just 1% over the past year.
While the continuous rise in rental prices has subsided slightly in recent months, the factors causing rental increases haven’t gone away. According to a recent report by leading real estate market researchers at Trulia, home ownership for renters has become more difficult over the past four years. Ironically, this comes at a time when home ownership is a more attractive financial alternative to renting in many housing markets not only in the Columbia SC economy, but throughout the United States.
Trulia reports the supply of more expensive homes on the market has increased, while the number of starter homes decreased by nearly 44% over the past four years. When compared to the same period of time, the number of mid-range “trade-up” homes for sale dropped by 41%.
Ralph McLaughlin, chief economist at Trulia said, “Consumers are increasingly worried about tight inventory when finding a home, and rightly so. Low inventory has been, and will continue to be, a strong headwind for house hunters.”
Columbia SC Economy: Home Buying
Home buying has become unaffordable for first-timers, primarily due to an ever-shrinking home inventory and rising home prices. Prices have increased over 30% in the starter-home category over the past four years. Statistically, a median priced starter home comprises roughly 38% of a typical first-time homebuyer’s total income – an increase of 6% from four years ago – according to Trulia’s findings.
This information largely contributes to the continuing downward trend in the home ownership rate. Home ownership peaked during the spring of 2004, with 69.2% of Americans owning their own homes. That percentage has fallen gradually since the housing collapse in 2007, currently standing at only 63.5%.
While the low-inventory scenario varies across the country, the Columbia SC economy has experienced its share of an unusually meager supply of homes for sale. According to Trulia’s statistics, in some markets starter-home inventories have decreased by more than 77% in the last four years, while the median sales price for that type of home rose 78%.
Probably one of the most devastating effects of rising rents is the impact they have on lower-income households in the Columbia SC economy. According to Pew Charitable Trusts, during the last two decades, housing throughout America has consumed a larger share of the typical household budget – despite the amount of household income. However, though households in the lower third income tier spend less than those in the higher income tiers, they spend a larger share of their income when compared to renters.
Columbia SC Economy: Mortgages
In addition, rising rents have been blamed for many first-time home buyers being unable to break into the Columbia SC economy and become homeowners because they are unable to save enough money for a down payment. Despite rent increases slowing their pace in recent months, the down payment requirements along with other expenses such as closing costs, taxes, insurance and potential home improvement costs continue to appear insurmountable to an ever-increasing number of prospective American home buyers.
In the past several months, mortgage lenders throughout the country have offered additional lending products designed to assist prospective home owners in affording the required down payment. In addition, in order to increase the national home ownership percentage, it's likely that additional mortgage products and services will be devised to assist first time home buyers.
Statistically speaking, however, a leveling of home prices and an increase in home inventory will have the biggest impact on the Columbia SC economy and the U.S. housing market. We've seen in recent months how the law of supply and demand has adversely affected the real estate market. With fewer homes for sale in the supply chain, buyers are faced with a seller's market created by increased demand. As a result, home prices have continued to rise steadily. Economists say an increase in the number of homes for sale in the market will improve and increase the number of prospective purchasers – producing a better balance of supply and demand.
You can find more articles pertaining to the Columbia SC economy in the Columbia SC Economy section of our site below Columbia SC Real Estate Categories in the column to your right.
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