Getting Acquainted with Our Homebuyer

Here’s some essential information about Mark and his wife:

• Age: 38 years (at the time of purchase)

• Location: Charleston, South Carolina

• Marital Status: Married

• Combined Income: $220,000 (from SEO/content marketing and government contracting)

Analyzing Home-Buying Expenses

Mark provides a detailed overview of his first property’s expenses:

• Home Price: $545,000

• Down Payment: $70,000

• Closing Costs: $19,000

• Moving Expenses: Approximately $4,000 (with assistance from family)

• Mortgage Payments: $3,400 per month

• Insurance and Taxes: $500 monthly

• Loan Type: 30-year fixed mortgage at 5.75%, secured when rates decreased early last year.

The following section features a Q&A with Mark concerning his experiences during the home-purchase process.

Establishing a Budget and Determining Affordability

Mark explains their budgeting approach: “We assessed what monthly payment we could comfortably manage without drastically altering our lifestyle, then worked backward from there. While this may not be the most conventional method—especially since online calculators often overlook factors like taxes and insurance—it provided a more realistic perspective than assuming we could suddenly adjust our spending habits to afford more.”

Key Insights on Mortgages for First-Time Buyers

“Choosing the right mortgage officer can be even more crucial than selecting a realtor,” Mark emphasizes. “The mortgage process is often more intricate and less enjoyable than house hunting, making it essential to have someone knowledgeable who can clarify the complexities. A dedicated mortgage officer should be responsive, even during odd hours, to address your queries and provide honest guidance regarding your finances.”

Proportion of Income Allocated to Mortgage Payments

“Approximately 19% of our gross income is directed towards our mortgage, which I estimate to be about 30-35% of our net,” he shares.

Surprising Expenses Encountered

While taxes and insurance should not be categorized as unexpected, they can significantly increase total monthly payments. Mark notes that they were fortunate to have exceptional support from both their realtor and mortgage officer—underscoring the importance of feeling comfortable and respected throughout the process; buyers have the right to walk away if they feel unsupported.

Reflections on What Could Have Been Done Differently

“During the hectic periods of 2021-22, we might have secured a larger or better-located property had we been more flexible with our offers,” says Mark. “While adhering to a budget is undoubtedly important, the reality of the housing market doesn’t always align with your pricing expectations. If a home resonates with you and fits your budget, it’s worth making the investment.”

Advice for Other First-Time Buyers

Given the evolving nature of the housing market, Mark offers several relevant tips:

• Look Beyond Cosmetic Issues: Don’t rule out a home based solely on superficial flaws since those details tend to fade over time. You can modify nearly everything in a house except its location.

• Revisit During Inclement Weather: If possible, view the property again when it’s raining. For instance, flooding can be a concern in some areas, and understanding how weather affects specific parts of the home can provide valuable insights.

• Explore the Neighborhood: Assess not only your commute but also the local amenities that support your lifestyle interests. Remember that your routine and hobbies will remain consistent, and a challenging location could lead to dissatisfaction.

• Focus on Current Needs: Choose a home that aligns with your present lifestyle rather than a projected future. Prioritize accessibility to nightlife and community amenities if those are important to you.

• Maintain Contingencies: Avoid waiving standard contingencies like inspections, as this can be detrimental, especially for first-time buyers given the scale of the investment.

Duration of the Home-Buying Process

The overall timeline spanned roughly two years. They began searching for homes in 2021 during a volatile market fueled by low interest rates and competitive cash offers. However, the finalization of their home occurred swiftly, taking about 40-45 days.