Real Estate: From Closing Costs to Credit Debt, Sellers Offer Incentives for Divorced
The bad housing market is causing woes for many, but for first-time buyers now is the time to buy real estate. Prices are starting to fall to the point of affordability. First-time buyers should see this as their opportunity to grab a hold of the American dream. If you’ve just gotten a divorce, this may be a good time to consider buying a home as you move into your new life as a single person.
As a first-time homebuyer myself, I decided to begin searching for my perfect home now. I thought it might be interesting to chronicle some of my own experiences of buying a home in the West Palm Beach area. I thought it would be interesting to make others are aware of the incentives that are out there right now. I also thought that this would give other first-time buyers a glimpse into what shopping for a home is like in reality. Maybe other first-time buyers had gotten discouraged about never owning a home before too, but now I assure you it is slowly coming within reach.
My search actually began earlier than planned when I was talking with a neighbor who had just purchased a new home in Terracina, a pretty exclusive community located in West Palm Beach. He had just moved into our apartment complex less than three months ago, and I asked him how he was getting out of his lease. He proudly announced that his closing costs would be paid, as well as $4,600 set aside to break his lease. He said that because of the market being the way it is, that there are many incentives being offered to buyers. So, the next day I decided to go check it out for myself.
My family went to an area community called Terracina to see what our neighbor was talking about, but no one was at the gate to let us in.We looked across the street and saw a sign plastered across a building “New Homes at Closeout Prices,” and decided to check out those homes instead. We drove toward the sales office. Having never even looked at buying a home before we didn’t know what to expect.
The salesman came to the door and showed us the layout of the community. He told us there was a community pool, cabana, and playground, and that there were seven houses available and asked us what we were looking for.Because we have a small family, we didn’t need much space.We told him something with more than three bedrooms would seem overwhelming. He told us that he had two available, one that had a lake view for $270,000 and one without a view for $250,000. He asked us if we had thought about our price range, and we told him no. (Of course, I had. I just wanted to see if he had any incentives to offer.) He said he would show us both explaining that the one on the lake had an upgraded kitchen (which is something important to me) but that the other one was nice, too.
As we walked into the houses, I thought about how as a first-time-home buyer, I would have never imagined that my family would ever even consider looking at a brand new house. Both of the houses were beautiful, but of course, I fell in love with the kitchen in the house on the lake. We went back to the office and the salesman printed out a good faith estimate. He explained that he puts first-time home buyers into the FHA loan, (which is currently at a 5.25 percent interest rate) and currently it only requires 3 percent down. He said that they would pay our closing costs, (totaling to $14,000) and that we would need only $8,100 to move in! He explained that with taxes, insurance, and mortgage insurance, the monthly payment would be about $1,941.
Finally, I let him know that was a little more than we could afford.He then asked what we could afford. I told him about $1500 to $1700a month with taxes and insurance. He told me that our price range was about $190K to $225K. (This, of course, I already knew.) Then I said, “Well we might be able to afford that payment if we didn’t have to pay our monthly credit card and loan bill.” He replied, “Maybe we can pay off your credit cards.” We were completely astonished!He explained that with the market being so bad, builders and sellers are looking for creative ways to get homes sold. Could you imagine buying a home with only $8,100 down and being debt-free? That is definitely the American Dream come true!
I will be chronicling my local experience for buying a home in this column to let people know what is available in the current housing market. I want people to know what crazy incentives that some builders and sellers are offering right now! Realistically, my family won’t be ready to buy for another six months to a year; but it is good to know what you are looking for.
So how do you know if you are ready to buy? Buying a home is the biggest investment many people will ever make. Lenders will look at your credit, your income, and how much money you have available for a down payment. There are many programs that are available to help first-time buyers. There are programs available through the State of Florida and FHA. There are also programs available for teachers, policemen, firefighters, and veterans.
To find out more go to www.floridahousing.org or www.hud.gov and click on the links for buying a home. Many of these programs also require that the homebuyers attend a First Time Home Buyers course with a HUD approved non-profit credit counseling agency.
