Your Home Buying Solution for Hilton Head Island, SC and Bluffton, SC Real Estate

Funding Required For Your Hilton Head Home

Buying a home in Hilton Head Island is a lot like buying a home anywhere else in the country. You have certain financial obligations you will have to meet once your offer has been accepted and your closing process begins.

Here’s the funds you will need to have in order to buy a Hilton Head home.

Earnest money for your Hilton Head Home

Escrow is a good faith deposit. When your offer is accepted and you sign a purchase contract the contract will stipulate how much earnest money is required. The earnest money tells the seller that you are serious about buying the Hilton Head home. Think of earnest money as putting your money where your mouth is. Usually, earnest money can be used to offset costs of purchasing the home. For example, if you put down $1,000 this can be used to help with closing costs, etc.

If the deal falls through escrow money is returned to you, except in cases when you back out of the deal for a reason that isn’t covered in the purchase agreement. For example, you may put a contingency in your purchase agreement that says, “based on satisfactory completion of a home inspection”. If the report comes back with something negative and the seller won’t pay for the repair, you can walk away and get your escrow back. But if you simply get cold feet, you’re going to forfeit the escrow.

Getting Your Hilton Head Home Inspection

A home inspection is always a good idea. While the lender will order one on their behalf, you want to order one yourself. You want a home inspector that is in your corner and will give you his take on the state of the home you’re buying in Hilton Head Island, not the lender’s view.

This service isn’t free but it is worth every dime. A good home inspector will be able to give you an honest, complete assessment of the home and any outstanding items that need attention.

Your Realtor will be able to direct you to reputable home inspection companies in Hilton Head Island.

The Down Payment Needed For Your Hilton Head Home

As part of your home purchase you will need to make a down payment. While a lender will front a large part of the loan needed for your Hilton Head home, they want to see you put in some money too. That’s what the down payment is for. These days, 3% to 10% is common, but the more the better. If you can manage a 20% down payment, you don’t have to carry the mortgage insurance required, which will lower your monthly mortgage payment.

Obviously, the amount needed depends on how much a lender is willing to give you. If they are willing to approve a loan for 95% of the purchase price, then you would need to make up the other 5% plus closing costs. So, a $500,000 home in Hilton Head Island would require a down payment of $25,000 in this example, with the lender picking up the other $475,000.

Hilton Head Home Closing Costs

If you have enough leeway in the loan, you may want to include the home’s closing costs in the mortgage amount. What is included in closing costs varies, but can include:

•    Loan Application Fees
•    Cost of Credit Report
•    Loan Origin Fee
•    Points
•    Title Search and Insurance Fees
•    Lender’s Attorney Fees
•    Appraisal
•    Homeowner’s Insurance
•    Private Mortgage Insurance
•    Inspections
•    Survey
•    Recording Fees
•    Transfer Taxes
•    Buyer’s Attorney
•    Escrow Deposit for Taxes
•    Partial Month’s Interest

This is required in addition to the down payment. During the closing period you should receive a Good Faith Estimate of all closing costs from your lender. Remember, this is just an estimate. Things like interest rates and points change continually during closing until you lock them in.