First-Time Fever

"We did our research and we knew all the advantages to buying a house over continuing to rent," says Melissa. "But what appealed to us most was the fact that we wouldn't be tripping over each other every night. I wanted a corner where I could curl up with a book and not be sitting right next to a blaring television."

Real estate experts say the Alexanders share a common bond with other first-time homebuyers. Not everyone is in the market for more spacious quarters. However, they all are looking-consciously or unconsciously-to fill some personal need.

"Buying a home is an emotional rollercoaster," says Joan Santon, Realtor and assistant manager of the Watson Realty office in Neptune Beach. "Young couples come in all excited. They want a fenced-in yard because they want to buy a puppy or have a baby. They want a big bathroom in the master bedroom because they've seen so many in model homes. They want a big kitchen where everybody can sit together. And, of course, they want a fireplace-always a fireplace."

Eventually, would-be buyers confront the realities of affordability. Some couples do their homework, but Santon says many come in with no clue about what they can reasonably afford. "We counsel them about how they might get their finances arranged so they can qualify more easily for the house they want in a location that's a good investment for them," says Santon. "Then we take them out to look at what's available."

Happily, Northeast Florida has a large range of inclusive neighborhoods and affordable homes to explore. "The beauty-and the strength-of the Jacksonville market is the availability of quality homes at all price points," says Greg Matovina, president of the Northeast Florida Builders Association. Matovina notes that a plurality of residential building permits in Northeast Florida still fall between $100,000 and $199,000.

With an average new-home price of around $132,000, Jacksonville remains the most affordable major market in Florida. "That's good news for first-time homebuyers, for young families and for empty-nesters who might be returning to a more modest home," Matovina adds. "With interest rates continuing to hold at 40-year lows, first-timers can buy more home for their money than ever before."

Bill Cellar, president and chief executive officer of Providence Homes, agrees. "Prices have appreciated in Jacksonville," Cellar says. "But for around $150,000 a buyer can get a very decent home on a smaller lot with three bedrooms and two baths. And chances are, that home will be located within a 30-minute commute from work."

Providence offers homes selling in the $150,000 range in OakLeaf Plantation in Jacksonville" target="_blank">Clay County and in Victoria Lakes near the Dames Point Bridge on the Northside.

Isabel Brown, marketing coordinator for Admiral Homes, says first-time buyers often get the most bang for the buck in a large master-planned development. Such developments often encompass neighborhoods where buyers are well to do-but everyone shares equal access to the amenities. "A first-time homebuyer in OakLeaf Plantation can take advantage of a 30-acre athletic complex with swimming pools, tennis courts and soccer fields," Brown says. "They enjoy the same benefits as buyers in much more expensive houses in the development."

Admiral offers homes in various OakLeaf neighborhoods ranging in price from $130,000 to $150,000.

Still, buying a first home often comes with a certain amount of sticker shock. John Molyneaux, division president of KB Home, says builders must be sensitive to the first-time buyer's budget while offering enough bells and whistles to make the price palatable. "We know that price is a key factor in the home buying decision," Molyneaux says. "So we strive to offer quality homes efficiently. But we also strive to offer everything our buyers want and nothing they don't want. Our standard features are based on the results of extensive consumer surveys."

In addition, KB buyers can choose from among more than 5,000 options and upgrades at the KB Home Studio. Those options include gourmet kitchens, extended or two-car garages, fireplaces, covered patios, upgraded appliances, walk-in closets and deluxe landscaping. KB, a leader nationally in the starter-home market, is active in a dozen Northeast Florida developments offering homes priced as low as the $110s.

Realtor Santon says new construction appeals to first-time homebuyers who may not have the wherewithal to purchase an existing home and remodel it to suit their tastes. "They're enchanted by the idea that everything is new," she says. "They picked the colors they wanted and everything works."

But affordable homes in nice neighborhoods are usually snatched up quickly. That's why moving quickly on a good deal is usually good advice. "We just listed a home in Neptune Beach for $149,000," says Santon. "It'll be gone in a day."

And builders are having a more difficult time providing homes that are considered to be affordable. Land prices have escalated, pushing development further out. And regulatory costs, particularly impact fees assessed by local governments on new homes, are ultimately passed along to buyers.

As for the Alexanders, they found a perfectly nice, four-bedroom house with a big kitchen, roomy master bathroom, fireplace and nice-sized yard in a small development on Fleming Island in Jacksonville" target="_blank">Clay County. "It was at the upper end of our price range and the drive in to work will be 45 minutes or more," says Melissa. "But that's okay. There are good schools in the neighborhood, my mother lives nearby and the house has space. Lots of space."

WHAT CAN YOU AFFORD?

Thinking about buying your first home? Wondering how much home you can afford? Figuring it out isn't rocket science-it's basically a matter of comparing what you earn with what you owe.

The key number with witch to begin is your gross monthly income, which includes your salary plus any additional recurring income that you can document on a tax return. Unearned sources of income such as alimony or investment income from real estate or stocks should be used in your calculations.

Then calculate your monthly debt load, which includes all ongoing obligations such as credit cards, installment loans, car loans, personal debts and other outlays such as alimony or child support. If it's revolving debt, such as a credit card, use the minimum monthly payment. If it's installment debt, such as a car payment, use the current monthly payment. And remember-you don't have to count any debt that is scheduled to be paid off in less than six months.

Typically, lenders prefer that your monthly housing expense, including taxes and insurance, shouldn't exceed about 28 percent of your gross monthly income. Further, your proposed monthly housing expense plus your total monthly debt service shouldn't exceed about 36 percent of your gross monthly income. If it does, your application may exceed the lender's underwriting guidelines and your loan may not be approved.

However, if you're able to buy the home while borrowing less than 80 percent of the home's value by making a large cash down payment, the qualifying ratios become less important. You might also choose to apply for an adjustable rate mortgage with a lower initial payment than a fixed rate program.

If the ratios work and your credit history is pristine, you may qualify for mortgage programs that require as little as 5 percent down-and others that require no money down at all. But if you're trying to go that route, make certain that there's nothing in your credit history-even a handful of late payments-that will cause a lender to question your reliability.

Remember, there are hundreds of loan programs available in today's lending market and all have different guidelines. So don't be discouraged if your dream home seems out of reach-just keep looking for a deal that works for your situation.

HELP FOR JAX FIRST-TIMERS

The Jacksonville Housing Finance Authority is designed to help low- and moderate- income first-time home buyers purchase a new or existing home by providing below market rate mortgage loans.

A five-member board appointed by the Jacksonville City Council governs the authority, which issues revenue bonds to support low-interest loans, new construction and renovation, financial packages for multifamily housing, emergency repairs and rental rehabilitation, credit counseling and special needs housing.

Generally, you must be a first-time buyer to participate. However, you may also qualify if you have gone at least three years without owning a home considered to be your primary residence. There are also credit and income criteria, and the home you buy must be located in Jacksonville" target="_blank">Duval County.

For more information, contact JHFA at (904) 353-0486.

THE FIVE COMMANDMENTS

Thou Shalt Save. Accumulate as much as you can for your down payment and closing costs. The bigger the down payment, the lower your monthly mortgage payment will be-and you'll be able to qualify for a more favorable loan.

Thou Shalt Accept Gifts. Of course you don't want to be obligated to your parents. Who does? But don't cut off your proverbial nose to spite your face-let them help if they're willing. Under current tax law, any individual can "gift" up to $11,000 to another individual without any tax consequences to either party. So, if you're married and both sets of parents pitch in, you could accept up to $44,000 to use as a down payment. "Hello, Mom? Just called to say I love you. Also..."

Thou Shalt Be Reasonable. Consider what you want versus what you need. While a kitchen fit for a gourmet chef and a luxurious bathroom may be high on your list of wants, focus on more practical considerations. You can always improve your kitchen and bathroom sometime later, when you can afford it.

Thou Shalt Act Now. Home prices are rising locally at a rate of nearly 10 percent annually, and most experts say historically low mortgage interest rates are going to begin creeping back up this year as the economy strengthens. If you're waiting for a better time, forget it-there won't be one.

Thou Shalt Seek Help. Buying a home is complicated and time consuming. Find a real estate professional you trust and let him or her guide you through the process.