First-time home buyers in Greenville

The 20 percent myth, retired

Conventional loans start at 3 percent down for qualifying first-time buyers and 5 percent otherwise. FHA starts at 3.5 percent. VA can be zero for eligible veterans, and the upstate has a substantial veteran population. Twenty percent avoids mortgage insurance — it was never a requirement to qualify.

The better question is what combination of down payment, mortgage insurance and remaining savings leaves you comfortable. Emptying the account into the down payment and closing with nothing in the bank is a worse position than putting less down and keeping a cushion.

The tax figure on the listing is probably not yours

South Carolina assesses an owner-occupied primary residence at a lower ratio than a second home or a rental, and primary residences also receive relief from part of the school operating tax. If the house you are buying was a rental, the taxes shown on the listing reflect the seller’s classification, not yours — and if it was owner-occupied and you are buying it as a rental, the figure moves the other way.

Taxes reach your monthly payment through escrow, so this is not a technicality. I estimate escrow from a properly classified figure rather than copying the listing, and after closing it is on you to file for the owner-occupied classification with the county. Do it promptly.

Cash to close, not down payment

Plan around cash to close: down payment plus closing costs plus prepaid taxes and insurance, less deposits and credits. Closing costs commonly run 2 to 5 percent of the price. A seller contribution toward closing costs is normal to ask for, and out on the newer inventory around Verdae, Five Forks and Simpsonville the builders will frequently contribute if the offer is written to ask.

Two things that catch first-time buyers here

Downtown condominiums are attractive at first-time-buyer prices and require the project to pass a review of its own — reserves, owner-occupancy share, ownership concentration, litigation and, in a mixed-use building, the commercial share of the floor area. And the older houses on the historic streets come with original systems, which an FHA appraiser will measure against minimum property standards.

Neither is a reason to avoid either kind of house. Both are reasons to have the check run before your earnest money is committed rather than in the week before closing.

Down payment and closing cost assistance

SC Housing runs statewide assistance products, and employer, municipal and non-profit programs exist as well. Eligibility, income limits and terms are set by the sponsoring agency, and no single lender can originate every product. Ask me which ones we can actually do before you build a plan around one.

The mistakes that cost first-time buyers their approval

• Financing furniture before closing — a new payment changes your debt ratios at exactly the wrong moment.
• Depositing cash without a paper trail. Move money by transfer so it can be sourced.
• Changing jobs mid-transaction without telling anyone. It is often fine; it is never fine as a surprise.
• Letting a credit card balance spike. Credit is re-checked shortly before closing.
• Budgeting off the listing’s tax figure without checking how the property was classified.