Buying a vacation condo can be one of the smartest things you’ll ever do, as well as one of the most stressful. But you can cut or even eliminate the stress by being an educated homebuyer, plus greatly increase your chances of getting a better buy.
First, get to know the Myrtle Beach area you’re interested in, the value of its condos for sale, the schools, transportation considerations and other factors. You’ll also want to make sure you have the necessary money for a down payment and closing costs. Typically down payments can be anywhere from 3% to 20% of the condo for sale’s value depending on the type of mortgage. And if your down payment is less than 20%, you may also be required to pay Private Mortgage Insurance (PMI).
Your closing costs will need to be prepaid and placed in escrow. Closing costs include taxes, title insurance, finance costs, mortgage points and other costs related to the purchase. When you apply for your mortgage, you should receive an estimate of these costs. And you also have the option of asking that the seller pay your closing costs as part of the contract.
Of course, before anything else you need to know how much you have to spend. The general rule when buying a condo in Myrtle Beach or anywhere else along the Grand Strand is that payment shouldn’t be more than 25% of gross monthly income. And your monthly housing expenses and outstanding debts shouldn’t be more than 30-40% of gross income. Obviously you’ll need to know what your expenses will be, including utilities, insurance, condo homeowners’ association fees, maintenance cost as well as a little extra set aside for unexpected emergencies. And know your spending limits! You may prequalify for a higher limit, but make sure it’s not more than you can afford long term.
You’ll want to obtain a credit report from the three main agencies TransUnion, Equifax, and Experian and check to make sure accurate. And you’ll want to hold off on buying big-ticket items before applying for a mortgage, since it can affect whether you’re approved and the amount you’re approved for.