Depending on the type of mortgage you choose, you will probably make a down payment anywhere between zero and twenty percent of the purchase price of your home. This range is very large, but the good news is that you get to choose what size down payment you'll make in the very early stages of house hunting. You can talk with your home loan officer to find out what mortgage type is best for you (and this decision will largely be based on how much money you can put towards a down payment).
Your down payment is usually the largest expense in buying a home, but remember that it is not the only cost. There are several other expenses that can add up to be quite a bit of money. Usually these costs total anywhere from three to eight percent of the purchase price of your home.
When buying a home, you should expect to pay for certain items and services throughout the home buying process. These expected costs are called buyer costs, or buyer expenses. Some typical buyer costs include the inspection(s), appraisal, surveys, title insurance, escrow items, attorney fees, and mortgage fees (credit report fees, loan origination fees, points, interim interest, and transfer fees, to name a few). Also, most home insurance companies require at least one month's payment before the closing (and some companies want the entire year's payment upfront).
Some of the typical seller costs, or seller expenses, include the CL-100 (also called the termite inspection bond), deed stamps, the home warranty, commission for both the listing real estate agent and the agent representing the buyer, possible home repairs, and accrued interest.
Since no two real estate transactions are the same, you should get your buyer's expenses confirmed before signing a contract. It's true that there are typical buyer costs and seller costs, but it's a good idea to get these in writing so that you know how much you'll need to spend during the home buying process. Also, be sure to talk with your real estate agent and your mortgage lender so that you can get an estimate of how much you should expect to pay when buying your new home.
One of the biggest financial benefits is probably income tax deductions. You can reduce your taxable income by deducting the property taxes and the interest of your home mortgage from your gross income. So, if you pay $6,000 a year in interest and $1000 a year in property taxes, you can subtract $7,000 from your taxable income.
Another benefit of owning a home is that you control how much you pay for housing every month. By choosing a fixed rate mortgage, you know that your housing payment (your mortgage payment) will not change in the years to come. So, if you chose a 20 year fixed rate mortgage, your monthly payment would be the same in 20 years as it is now. If you chose to rent instead, you can certainly expect the rent price to go up significantly in that same amount of time - especially in Charleston's rental market.
The rental market here in Charleston brings me to the third benefit of owning a home. Depending on the area, rent prices in Charleston are relatively high, especially compared to other areas of South Carolina. Right now a one bedroom and one bath apartment in West Ashley (one of the more affordable areas close to downtown and to the beaches) is about $550 a month, and in downtown Charleston it is about $800. The cost of renting in Charleston makes owning a home a good financial investment. If you are going to spend that much money a month renting, you may as well go ahead and put the money toward an investment that will give you your money back in the future (plus some money).
Another financial benefit of owning a home is appreciation. The average appreciation for homes in Charleston is roughly twelve to fourteen percent. This number is much higher than many other cities. And, even with a slower market, this percentage is higher than many other types of investments. Appreciation motivates investors to buy lots of real estate and then rent it out. These investors don't make their money off charging high rent - instead, they count on the homes' appreciation for profit.
Both Keadle & Lee & Kandi Keadle are contributors for EditorialToday. The above articles have been edited for relevancy and timeliness. All write-ups, reviews, tips and guides published by EditorialToday.com and its partners or affiliates are for informational purposes only. They should not be used for any legal or any other type of advice. We do not endorse any author, contributor, writer or article posted by our team.
Keadle has sinced written about articles on various topics from Real Estate, Home Improvement How to and Real Estate. Lee Keadle is a full-time real estate agent in Charleston, SC. He works with a team of three agents to give buyers the best services possible. You can search for new homes on our website at. Keadle's top article generates over 2900 views. to your Favourites.
Lee & Kandi Keadle has sinced written about articles on various topics from Real Estate, Environment and Mortgage. Lee & Kandi Keadle are professional Charleston REALTORS®. with years of experience in the market, it is Lee & Kandi's goal i. Lee & Kandi Keadle's top article generates over 1600 views. to your Favourites.