First-Time Home Buyer Questions, Answered
Buying your first home can feel like everyone else already knows the rules. They don’t—and you shouldn’t have to guess. Here are a few questions we hear from buyers around Charleston and the Lowcountry.
Do I need 20% down to buy a home?
No. Some conventional loan programs allow as little as 3% down, while FHA loans can allow 3.5%. Eligible VA buyers and buyers purchasing eligible properties through USDA programs may have zero-down options. Your choices depend on your finances, the property, and the loan program. A smaller down payment can also affect your monthly payment and mortgage insurance costs. Consumer Financial Protection Bureau
If I qualify for zero down, do I need any cash?
Possibly. The down payment is only one part of the budget. You may also have closing costs, earnest money, inspections, an appraisal, moving expenses, and repairs or purchases after closing. Seller credits or assistance programs may help with some costs, but we should look at your estimated cash to close, not just the down payment percentage. Consumer Financial Protection Bureau
What is earnest money?
Earnest money is a deposit made under the purchase contract that shows your good-faith intent to buy. Your contract sets the amount, when it’s due, and who holds it. Consumer Financial Protection Bureau
What happens to my earnest money?
If you purchase the home, the deposit is generally credited toward your down payment or closing costs and appears in your closing figures. If the transaction ends before closing, whether you receive it back depends on the contract, the reason for termination, and whether the required steps were completed on time. Don’t assume the deposit is automatically forfeited—or automatically refunded. Consumer Financial Protection Bureau
What if I discover something that makes me want to walk away?
If your contract provides a due diligence period, that is your time to investigate the property. Schedule inspections promptly. Get an insurance quote. Ask about anything that could affect your decision, from the roof and crawlspace to flood insurance or future plans for the property.
Depending on the contract and timing, you may be able to negotiate a solution, accept the home as-is, or terminate. Under South Carolina’s due diligence provisions, a buyer who terminates this way may owe the agreed termination fee, even when the earnest money is returned. The notice and payment deadlines matter. South Carolina REALTORS
What if I lose my job and can no longer qualify for the mortgage?
Call your lender and agent as soon as you know. If your contract has a financing contingency and you have met its requirements, you may have a path to terminate because financing is unavailable. The protection is determined by the actual contract and your circumstances; losing a job does not automatically cancel the purchase agreement. South Carolina REALTORS
What expenses might I pay before closing?
The most common are your earnest money deposit and the inspections you choose. An appraisal may also be paid before closing, depending on the lender’s process. Inspection costs are usually money spent to learn about the property; if you decide not to buy, you generally don’t get that service fee back. We’ll talk through likely expenses before you make an offer so you can plan for them.
Do I need to be pre-approved before I start looking?
You can browse anytime, but a pre-approval helps you shop with a realistic payment and cash budget. It also lets us catch financing questions early, before you fall in love with a house or face a contract deadline.
The most useful first-time buyer question is the one you’re hesitant to ask. Whether you’re still saving, comparing loan options, or ready to tour homes, Erin and I can help you understand the numbers and the steps before you make a commitment.