Buying a Columbia SC home remains a dream for many people. Whether you are a young professional, part of a new family, or an empty-nester, the desire for permanence, peace of mind, and independence can be extremely motivating, in part because almost everyone considers these factors important for having a good quality of life.
When looking for a Columbia SC home, whether for the first time or not, many would-be homeowners finding themselves wondering: what kind of Columbia SC home can I actually afford and how do I find one that is affordable on my budget?
Determining a Budget for Your Columbia SC Home
You must take an objective look at your finances to understand exactly how much you can afford to spend on creating your perfect home.
You must look closely at all your debts, bills, and earnings, and that can be uncomfortable or even depressing, depending on your circumstances.
A good place to start is by talking to a financial adviser, loan officer, or other professional to get an accurate picture of your finances and potential budget for buying your Columbia SC home.
In the end, however, you should have a figure in mind in terms of the monthly payment you can afford. Remember the payment includes more than just the principal and interest associated with the home loan. You will also be paying property taxes, homeowner’s insurance, and possibly mortgage insurance, making the payment higher than you may initially think.
Finding an Affordable Columbia SC Home
In recent years, some of the best real estate deals have been on foreclosures and short sales. Foreclosures are homes sold by the bank holding the mortgage, usually due to non-payment by the owner. Sometimes, homes may be sold at auction by the state/city due to non-payment of property or other taxes. Foreclosures are generally sold well below market value, primarily to prevent the bank or other interested parties from losing even more money on the property. Lists of foreclosures can be found online or sometimes in local newspapers.
Short sales are similar, however, the list price of the home may be higher than a foreclosure. Keep in mind, many of these homes are not necessarily in good condition and may need work, either cosmetic or structural, to make the home livable or nice inside.
If you choose to purchase such a Columbia SC home, a property inspection beforehand can save you a lot of potential heartache. Replacing a roof, for example, generally costs thousands. Mold remediation is likewise expensive, not to mention hazardous. Homes for sale by-owner are likely to be affordable; however, the transaction itself can be much more difficult without having professional assistance working on behalf of both parties.
These reasons alone should be convincing enough to hire your own agent to look after your best interests in any purchase of a Columbia SC home.
Other Expenses When Buying A Columbia SC Home
Closing costs can be one major expense. Ideally, the seller should pay the majority of these costs. To avoid surprises, be certain to understand fully which expenses are your responsibility and which ones belong to the seller. High closing costs can represent a serious expense that could be unnecessary or at least negotiable.
The same goes for insurance. It is entirely possible to overpay for a policy that does not provide any additional benefits to you as the homeowner. You should get quotes from several insurance companies prior to choosing a policy. Do not skimp on coverage! Just make an attempt at getting what you need for an affordable rate through comparison shopping.
We have more articles to help in the process of buying a Columbia SC home over in our Columbia SC Home Buying Tips section of articles under the Columbia SC Real Estate Categories to your right.
Although the gap between renting and buying is narrowing across the U.S., Columbia SC home buying is still 38% cheaper than renting according to Trulia's Winter 2014 Rent vs Buy Report.
Rising mortgage rates and Columbia SC home prices have narrowed the gap over the past year, though rates have recently dropped and price gains are slowing. Now, at a 30-year fixed rate of 4.5%, Columbia SC home buying is 38% cheaper than renting versus being 44% cheaper one year ago.
Columbia SC Home Buying Beats Renting Until Rates Hit 10.6%
Even though prices increased sharply in many markets over the past year, low mortgage rates have kept homeownership from becoming more expensive than renting. Also, in some markets, rents have risen sharply; rising rents hurt affordability relative to incomes, but rising rents make buying look cheaper in comparison.
Will renting become cheaper than buying soon? Some markets might tip in favor of renting this year as prices continue to rise faster than rents and if – as most economists expect – mortgage rates rise, due both to the strengthening economy and Fed tapering.
Columbia SC home buying becomes more expensive than renting if mortgage rates rise to 10.6%, and rates haven't been that high since 1989.
Of course, the cost of Columbia SC home buying versus renting depends on how much home prices rise (or fall) after you buy. Estimates assume conservative Columbia SC home price appreciation, but – as we all know after the last decade – Columbia SC home prices can unexpectedly rocket or plummet.
For more Columbia SC home buying tips, visit our Columbia SC Home Buying Tips link under our Columbia SC Real Estate Categories to the right.
The Columbia SC home buyer marketplace is changing. Home values are on the rise and mortgage rates are still near historic lows. So for those who have been sitting on the fence, now is the perfect time for you to buy.
Things Every Columbia SC Home Buyer Must Decide On
How Much Can You Afford?
Find out how much you're able to borrow and determine what price range you can afford before you ever start looking for a home. Get a pre-approval letter from your lender to help us, your real estate agents, find a Columbia SC home that will fit within your budget.
Decide Exactly Where You Want to Live
Whether your desired location is based on a particular school district you like, or being closer to work, don't compromise. We will work hard to find the perfect home in your perfect Columbia SC area neighborhood.
Know Your Needs and Wants
Having a garage or a basement may or may not be important to you. However, when it comes time to sell your home, these things will matter. Talk to us about the amenities of the home you're thinking about and how they stack up to the overall market. Decisions you make today could create issues when you try to sell the house later on.
Get an Agent on Your Side
Working with an agent who has your best interests in mind is very valuable. As your agent, we will provide data on the home that will help you determine your initial offer.
Respond With a Sense of Urgency
Be prepared to make a decision quickly after you view a home. Properties are selling very quickly, and we don't want you to miss out on the perfect Columbia SC home because you were not ready to move.
Hire a Home Inspector
A home inspector can save you thousands of dollars down the road. Columbia SC real estate is one of the best investments you can make, but not if you make the wrong choice. Ask us for inspector recommendations, interview a few of them and choose the one you're most comfortable with. Never buy a Columbia SC home without having a home inspection done, NEVER!
These Columbia SC home buyer tips will help you successfully navigate the home buying waters. For more Columbia SC home buyer tips and articles, click over to our Columbia SC Home Buyer Tips section under Columbia SC Real Estate Categories to your right.