Realistic house price (Columbia, Greenville, West Columbia: mortgage, credit, lawyer)

[ArcticPhoenix]

I'm planning on relocating to South Carolina (either the Greenville area or the Columbia area), and I just want to know what I could really afford on my salary. I make in the general vicinity of 30K/yr, and my pay wouldn't change by much when I relocate (I'm waiting until I'm done with college, and I'll be moving in about two years).

Can I, realistically speaking, get a decent home for under 120K? I don't want anything more than 4 times my gross income for safe measure, and I shiould have a (relatively) decent down payment by the time I'm ready to move.

Any good ideas about where I could buy an affordable, decent, home? I don't need something huge, but I do need a 3 bedroom (I have two children, a wife, two chinchillas, a fish, and a parrot). Right now I'm living in a pretty small two bedroom apartment, and our place is only about 735-765 sq. ft.

What do you think I could get for about 120K or less?

And how big is the airport there?

[waccamatt]

You could get a nice starter home for $120K, but as a banker I wouldn't recommend spending 4 times your annual salary for a home. A mortgage for $120K, with taxes and insurance escrowed, would be close to $800 a month and with $30,000 a year income it would be next to impossible to qualify for that size mortgage with 3 dependents. If someone tries to convince you to accept a mortgage for that amount, please think long and hard about that amount. You can still find a decent 3 bedroom starter home in Columbia for $90,000, which I think would be a more realistic figure unless you have a large down payment or more income. You would get the most house for your money in the east Columbia/Leesburg Road area, some parts of Irmo or West Columbia and Cayce. Good luck to you.

[Brandon Hoffman]

It really depends on a lot of other factors such as how much debt you have, what is your total family income, income to debt ratios, what kind of financing you get (some great first time buyer grants), how much you put down. If you have 20% to put down where you are financing about 100k and avoid MI then you'll be able to get a nice home for 120k.

You should be able to get a home in good area that is anywhere from 1100-1750 sf with possibly a 1 car garage.

[ArcticPhoenix]

I have 0 other debt. No credit card bills, no car payment, no medical bills... nothing. I should have about 10-15K for a down payment when I move.

Would it be possible for me to be able to afford a house in the Columbia area?

And, if I have to buy a 90K house, is it possible to find a nice 90K house near Columbia?

[waccamatt]

Originally Posted by ArcticPhoenix

I have 0 other debt. No credit card bills, no car payment, no medical bills... nothing. I should have about 10-15K for a down payment when I move.

Would it be possible for me to be able to afford a house in the Columbia area?

And, if I have to buy a 90K house, is it possible to find a nice 90K house near Columbia?

With no other debt and that down payment, $120 K for a house is more reasonable. There are a number of places where you can get a starter home for $90K, but your options open up a lot more at $120K. I'm sure you could find a 1200 square foot 3 bedroom home in that price range. Do you know yet what part of town you'll be working in? It's so much easier to narrow places down when we know where you will need to commute for work (especially with gas prices the way they are now).

[Brandon Hoffman]

And with your salary you should also qualify for some grant money for first time buyers so that will help with your interest rate and your purchase amount. There is a big difference between 120 and 90 but if you're patient you can get a good home at 90.

[waccamatt]

In addition to what Brandon mentioned, if you are willing to buy inside the city limits in a low-to-moderate income census tract, the city has great loan programs with low interest rate programs available.

[ArcticPhoenix]

I'd prefer not to live within city limits. I'm not a big fan of living within cities, and I need something that's reasonably close to the airport. Interesting about the grant money, though. I'd imagine that the better my credit score, the better the interest rate that I'll get, correct?

Do either (or any of you all for that matter) think that I'll likely be able to buy a house for around a hundred thousand still in a couple of years? I'm thinking prices aren't going to jump that much, but you never know.

[Tommy1981]

There are several "starter home" neighborhoods in the area directly around the airport. They're probably still in the city limits though. $120k with a builder like Mungo will get a fairly nice house, but it would definitely be on a smaller lot.

I just bought a house as a first time home buyer. Our income was higher than yours, so the game was a bit different, but I did find there were some options for getting FHA money for a downpayment, provided your income is under a certain level. Be sure to consider all the aspects of the mortgage product. If you've got less than 20% down, most mortgages will require Private Mortgage Insurance (PMI, or MI as Brandon referred to it). That insurance does NOTHING for you as a buyer. It gives the bank peace of mind that they will get all of their money back if you default while you owe more than your house is worth. If you can get downpayment assistance to get over that 20% downpayment, then you'd eliminate some amount from your monthly payment (I heard numbers of around $100 a month, but I'd guess it would be less for a loan around 100 or 120k).

Interest on a loan is tax deductiable, closing costs are not. Bank of America has a "No-Fee Mortgage Plus" mortgage product that pays all of the closing costs (Orgination Fee, Lawyers, Surverors, etc) except taxes and hazard insurance, and they don't require PMI. They do require 5% down, probably have fairly stiff requirements for approval, and have about .75% higher interest rates than other traditional 30 year Mortgages, but with out requiring the PMI and having the ability to put any money that you would have put towards closing costs toward your down payment, you could probably get the best deal from them. And you'll love your income tax refund next year.

If you qualify for assistance and can get to 20% down, that will really help you. 20% or not, Shop around and get Good Faith Estimates (GFEs) with out checking your credit every place. The Rate isn't as important as the APR. The APR factors in all of the fees for a loan. If you get GFEs from 10 different banks for the same loan term and the same amount down, you can compare the APR to see which loan is the best deal (Lowest is best). Then apply and let them check your credit for the one thats the best, rather than having your credit hit for applying at each bank. Rates have been very volatile and trending up since March or so. When you get to the point of locking in your rate, try to lock in sooner rather than later. I watched my rate hoping for some downward movement for about 2 weeks, and eventually had to settle. It would have been better to lock the first day I could have. Also it really soldifies your offer if you get preapproved before you make an offer, especially being a first time buyer. You may be able to use a preapproval to negotiate a lower price. You'll have usually 90 days between preapproval and making an offer, so don't get preapproved too early if you're not ready to make an offer inside of 90 days.

I hope this helps. Good luck!

[ArcticPhoenix]

Awesome! Thanks a bunch for all the info!

Hrmm... what about buying a repo'd house? Could I get a better deal that way? How exactly does that work? What about houses that are put on the market in the area right now? Are they just sitting, and is the house appreciation in the area relatively high, or does it vary dramatically within different areas around Columbia?