Introduction
For first-time home buyers in Volusia County, buying a house is an exciting adventure. But it can also be a bit overwhelming, especially when it comes to understanding the costs involved. From Edgewater to Deltona, the journey to homeownership requires careful planning and a good grasp of the market.
Table of Contents
The Challenge of Rising Home Prices
Home prices are on the rise. This can make it harder for first-time buyers to afford their dream home. Reports have shown that Volusia County home prices have increased a modest 1-10% from last year. This means houses are getting more expensive but they aren’t dramatically increasing, which should give you hope!
Why This Matters
Higher interest rates and higher price points (compared to 2021-2022) can be stressful and stretch your budget. For young professionals and families, every dollar counts, and it’s important to know where you stand financially before diving into the housing market.
What You Need to Know About Costs
Down Payment
One of the biggest costs is the down payment. Most first time home buyers believe the down payment is usually about 20% of the home’s price. However, there are loans that require less, and they might have extra costs like mortgage insurance. In Volusia County, the average home price is around $300,000. So, a 20% down payment would be $60,000. But you can pay less upfront (0-5%), meaning your upfront costs are lower and your monthly costs are higher.
Closing Costs
Closing costs typically include fees for inspections and appraisals, along with taxes and other charges. These can add up to 2% to 5% of your loan amount. For our example home price, that could mean an extra $3,000 to $10,000 you need to be ready to spend during the home buying process.
Insurance and Taxes
Don’t forget about homeowner’s insurance and property taxes. Insurance protects your home from damage and loss and is typically paid on your behalf from your monthly payment plus your “escrow”. Taxes are paid to the local government each year, typically also paid on your behalf from your escrow account with your lender. Together, these costs are another important part of your budget.
Maintenance
Once you have your home, you’ll want to keep it in good shape. Maintenance includes small repairs like replacing lights, faucets and fixtures or bigger projects like replacing a roof. Many experts suggest saving at least 1% of your home’s value each year for these expenses. That’s about $3,000 per year for our example home.
How to Prepare
Budget Carefully
Make a list of your income and expenses. Decide what you can comfortably afford each month. Don’t forget to include all the home-related costs mentioned above. Use an online mortgage calculator like ours to see how much house you can afford after accounting for these extras.
Improve Your Credit Score
A better credit score can help you get a better interest rate, which saves money over the life of your loan. Make sure to pay bills on time and reduce your debt as much as possible before applying for a mortgage. Reach out to me for credit related tips & tricks.
Look at Different Lenders
Not all loans are created equal. Different lenders offer different rates and closing costs. It’s smart to shop around and get quotes from several lenders. Even a small percentage difference can add up. As long as your shopping lenders and asking for only a “small credit pull” your credit will be minimally affected. Further, keep your mortgage inquiries within a 10 day period and decide which lender is the best fit during that time. Your credit will bounce back quickly if you follow these simple steps.
Opportunities in Volusia County
New home builders are offering incredible incentives and mortgage rate buy downs, which make a new home more affordable, but may require living in a HOA with additional fees and rules.
Foreclosures are another option, but often require more repairs than your loan will allow.
Rural housing is still available for as little as $0 down.
Owner financing, rent to own and assumable mortgage are other ways that new buyers are finding ways to own a home.
Working with a knowledgeable real estate agent like myself, can help find where new homes are being built, or where there might be a good match for your budget and preferences.
What If the Market Changes?
The real estate market can be unpredictable. If interest rates drop, I anticipate a bull rush of buyers who have been sitting on the sidelines waiting for their opportunity. This creates competition and home prices will be driven up by the increased demand. At this moment, more homes are becoming available, so prices are leveling off or even dropping. This is a great time to buy, while sellers are negotiable on price and there’s little competition from other buyers.
Staying informed is the key. Paying attention to local real estate reports can help you understand when is the best time to buy.
Final Thoughts for First-Time Buyers
Buying your first home is a big step. It’s normal to feel anxious about the costs, but with careful planning, it is achievable. Understanding the full range of expenses, from the down payment to ongoing maintenance, means you can create a budget that works for you.
Remember, Volusia County has many resources and opportunities. With thoughtful preparation, you can navigate the market to find the perfect home. Whether in New Smyrna Beach, Port Orange, or anywhere in-between, the right expert guidance can make the process smoother and less stressful.
Choosing a trusted real estate agent can provide the support you need to make informed decisions and find a home that fits your lifestyle and budget. Happy house hunting!
