During the recession of 2009, the number of Columbia SC home buyers depending on down payment assistance from family members or friends tripled. It’s estimated that roughly 21% of homes were purchased by homeowners using a gift or a loan as their down payment. Let's look at why that need may still exist.
Columbia SC Home Buyers – "Who Can Save Today?"
According to a recent analysis of Zillow of federally-provided real estate sales data, the percentage of Columbia SC home buyers needing down payment help from their families is still higher than it was before the 2009 housing crisis. The 21% number mentioned above dropped to just over 13% in 2014. However, compared to 2007 when only 8% of purchasers required assistance from friends or family, the percentage is substantial.
The Zillow report spotlights one glaring reason the need exists for many prospective Columbia SC home buyers — the absence of savings. In order to keep monthly mortgage payments close to or less than what they are paying in rent, first time homebuyers usually need cash for a down payment. That can be a challenge, and it’s the main reason
during the recession — and even now — prospective purchasers seek help from their family.
In what the Zillow data characterizes as “middle-income households” 25% of Columbia SC home buyers turned to friends or family members for help with their down payments in 2014. During that same year, only 15% of low-income and 16% of high-income households received assistance for their down payments.
Real estate experts say skyrocketing rents, a high percentage of student loan debt and slow income growth are among the factors preventing many first-time Columbia SC home buyers from being able to save money for a down payment. More troubling to some insiders is what is seen as a potentially widening gap in inequality. Assistance networks and programs available to low-income households may not be able to sustain that assistance, while higher-income home buyers may not need the help.
First-time Columbia SC home buyers are especially reliant on friends and family for help with the down payment. Not only are their rents high, but mortgage credit is tight, making their entry into the homeownership arena “iffy” at best. In addition, home values and sales prices have increased. And as prices increase, so do the down payment requirements. Naturally, as first time home buyers, they have no cash from the sale of a previous home to fall back on.
Find more tips and articles for Columbia SC home buyers to your right in the Columbia SC Home Buying Tips section just below Columbia SC Real Estate Categories. And Follow us on Facebook and Twitter for daily news and tips we post there.
Rising mortgage rates are the biggest worry for prospective Columbia SC home buyers. Bigger than rising prices and the lack of available inventory, according to a survey released recently by Trulia.
The survey suggested that rates — which remain below 5% — aren't likely to be a deterrent to Columbia SC home buyers just yet.
Mortgage rates have jumped in recent weeks, creating concerns that the rebounding real estate market could lose steam. A separate survey released recently from the Mortgage Bankers Association showed that interest rates for a 30-year fixed mortgage rose to 4.68% recently — the highest rate in two years.
Trulia surveyed about 2,000 people over three days in late June, just after rates began to spike upward. Some 41% of respondents said their biggest worry was that mortgage rates would rise before they were able to buy a home. That was more than the 37% who were worried about prices rising and the 36% who worried that they wouldn't be able to find a home they liked.
While rising mortgage rates have yet to have a noticeable effect on purchase mortgages, they have already led to a steep decline in refinancing. But, over time, rising rates should slow down recent price growth.
How High is Too High for Columbia SC Home Buyers?
The bigger question is how high is too high? The answer to that, Trulia says, is 6%. After combining the responses to several questions, Trulia found that some 56% of respondents who planned to buy a home would be discouraged if rates hit 6%. Among renters who planned to buy, about 62% would be discouraged if rates hit 6%.
Economists have been expecting rates to increase because the economy is improving and market expectations that the Federal Reserve will ease up on bond buying and other extraordinary measures designed to keep interest rates low.
Columbia SC home buyers who want to take advantage of the low interest rates on buying a home need to move now in order to avoid even higher rates and higher prices. Contact us today for the most current mortgage rates and plans available for Columbia SC home buyers.
Columbia SC home buyers 
have been flocking to the market in droves this past year, trying to take advantage of affordable prices and record-low mortgage interest rates while they still can.
When it comes to applying for a mortgage — the most important aspect of the home-buying process — recent surveys found that about one in three buyers have no idea what they're doing.
In today's market, where the low supply of listings and bidding wars require swift decision-making, it's pretty unsettling that few buyers come in well-prepared. And considering the fact that the housing crisis was largely attributed to homeowners who took on mortgages they couldn't afford, buyers apparently haven't learned many lessons.
Columbia SC Home Buyers Need Education
Here are some key findings from the recent unrelated reports by Zillow and the Yale Law Journal study:
- One-third of about 1,000 potential buyers who took Zillow's Mortgage IQ Survey did not know they could get a mortgage with less than 5 percent down. (The minimum down payment for FHA loans is 3.5 percent and VA loans can be obtained with zero down.)
- One-third of buyers incorrectly believe that all lenders are required by law to charge the same fees for credit reports and appraisals.
- 26 percent of buyers thought they were obligated to stay with the lender that pre-approved them (not so) while 24 percent believed the best interest rates and fees are only obtained through their own bank (again, not true).
- The Yale study, conducted over three years, also found that 31 percent of its participants did not understand the basic principals of a mortgage, and many didn't even bother to read the terms of the documents they were signing.
- Nearly one-third of participants who read a lender disclosure form didn't know the loan being presented had an adjustable rate, despite the fact that the form clearly specified so.
If you'd like to see how prepared you are to join the ranks of Columbia SC home buyers, take Zillow’s 10-question mortgage quiz.
Get more mortgage information by checking out the mortgage related articles under Columbia SC Mortgage Info to your right.
Even with this full-fledged seller's market underway, many Columbia SC home buyers are running from some listings.
Call them turnoff listings, or whatever you want to call them. For one reason or another, Columbia SC home buyers are turned off by these homes. Often times it's due to being overpriced, excessive restrictions on access to even seeing the homes, owners not willing to make repairs, or a variety of other selling mistakes.
Nationally, according to new data from the National Association of Realtors, 44 percent of all new listings take 90 days or more to sell, 22 percent take six to 12 months, and 9 percent take more than a year.
Why Columbia SC Home Buyers Run From Some And Not Others?
More often than not, the root problem is the owners of the property. We see homes being sabotaged by owners all the time.
Sabotaged? Not intentionally, but by "doing things or not doing things that would make the house easier to sell." Demanding an unrealistically high asking price — and refusing to negotiate on lower but qualified offers — is the top turnoff for many would-be Columbia SC home buyers.
Imposing severe restrictions on when and by whom the house can be shown is another. For example, sellers who will only allow showings between 10 a.m. and noon on Saturdays, or who require a 24-hour advance notice before appointments to show during the week, or who won't let anyone in unless they or the listing agent are present, inevitably delay offers and sales. In short, making it nearly impossible for Columbia SC home buyers to even see their home.
Other Big Turnoffs For Columbia SC Home Buyers:
- Poorly cleaned, messy houses with obvious deferred maintenance.
- Sellers who insist on being present — or hover nearby — when shoppers visit so they can point out every feature they improved or like. Better for sellers to be out of the house or out of sight.
- Odors in the house that are either bad — especially from dogs, cats and other pets — or come across as cover-ups, such as scented candles, potpourri plug-ins, etc. When buyers encounter obviously artificial smells they wonder: What are the owners covering up?
Just because homes are selling fast in the Columbia SC area doesn't mean yours will. You've got to think of it as a product you're marketing, not just as your home. Get it in shape to sell. Price it realistically. Be flexible and cooperative on showings and negotiations. Unless your home has features that really put off potential Columbia SC home buyers like costly physical defects, ugly design, bad location or bad schools, your property should sell in today's market.
Many previously foreclosed Columbia SC home buyers are now wanting back in to the home market. In what economists call "The Boomerang Buyers", many who lost their homes to foreclosure are now wanting to buy again.
With more and more people who previously lost their home to foreclosure getting back in to an already crowded market, it's no wonder why would-be Columbia SC home buyers are finding there is less and less available inventory of homes to choose from when they are looking for that perfect home.
We have other Columbia SC Real Estate News under our Columbia SC Real Estate Categories to your right.