I think preparing well in advance is a very good move on your part, in fact not doing that is the most frequent mistake I see buyers make. They typically wait until the very last minute and then it is too late to address any issues. I would find a Realtor you trust, get to know them well, buy their lunch or meet for coffee a couple times. Have them introduce you to the local lender they trust the most, having a good team in place is the smart move!!!
I linked my personal website below, there is a lot of good information about what to do and what not to do that will make your move as easy as possible. I am not licensed in VA so not soliciting your business, just being helpful. Make sure the loan officer you use IS licensed there! Not some overseas telemarketer! I am posting a new helpful hint every day this week that will really make it easy if you follow them, good luck,
NMLS # 6395
Financing Kentucky One Home at a Time
Shristhi and I thought we would follow up with you. You said you would have enough saved up by August - how's that going for you?
We would love to help you find a place to live, rent or buy.
Feel free to shoot one of us an email, or give us a call.
Chris & Shris Dudley
Long & Foster, Realtors
Licensed in DC, MD & VA
Office #: (703) 556-8600
Office Address: 8227 Old Courthouse Road, Tysons Corner, VA 22182
Chris Cell: (202) 297-3047
Shris Cell: (301) 655-1521
Great questions you've posed. I recommend two things. First, DO NOT PAY OFF THAT CREDIT CARD! Even though you may have a decent credit score, you'll still need to demonstrate you have accounts open and active. Pay the debt down substantially if you like, but keep a small balance on the account.
Second, meet with a Local Mortgage Banker to get prequalified for mortgage financing. The Mortgage Banker will review all facets of your loan request to answer your questions with regards to the types of loans and maximum loan amounts you could qualify for. You can do that now and get the best information to answer your questions as to whether or not you're ready to buy today and you'll get an idea of monthly payments so you can decide whether you want to save more for a larger down payment (and a lower monthly payment) in the future.
You have a lot of good advice here. I would first talk with a lender. There are a lot of good ones out there. One I like ( he did the last two refinances of my own personal residence ) is Hal Johnson, firstname.lastname@example.org, or 703-507-1572. Now for the bad news.
The Fed's latest round of easing, focused on driving mortgage rates down, when combined with Fannie/Freddie loan standards, is actually making it harder to get conventional financing. The latest NAR report I have seen, this AM, is that rejected borrowers had an average credit score of 715 with 19% down payments for conventional financing. I think that means, for you, getting a FHA loan. The reason for this is that the spread between a lender's cost of funds and the return the lender gets on these loans is actually decreasing, making it harder for lenders to make money. Combine this with really strict Fannie/Freddie buyback requirements if the loan in question goes sour, and you have a really restrictive conventional loan environment.
Now, here's the really bad news: unless FHA has changed their rules, you cannot use room rental income to qualify for a FHA loan. That applies to Fannie/Freddie financing, too. I would ask that question of any lender really early on in your talks.
If this is still the case, then your realistic option is to spend a few years saving money, while hoping for a pay increase or something else that increases your income.
It is mostly real estate agents that are on this forum and we don't generally know the ins and outs of loan qualification. But we do tend to keep up with a few loan officers that have provided excellent service to our clients over the years. I have one in particular that works with a lot of first-time home buyers and is aware of any programs that are available, including the grant program for closing costs. There are several programs with income caps that may be available to you. Julie is very detail-oriented - that's why I continue to work with her. Let me know if you would like her contact information.
Second step - it may be worth it to select your agent now, even if you buy next year. The smartest way to do this is to meet with a few agents and see which one is the best fit. That way, when you want to check out a house in a particular area or have a question, you have someone that you know you can discuss it with. It will help you get more educated as you prepare for your purchase during the "browsing" phase. I would be happy to meet with you for an initial consultation.
And final thought - if the qualification is for a lower amount than you would want, but you feel comfortable with the payment, you may want to start exploring possibilities for a co-signer (a lot of parents will do this).
Keller Williams Capital Properties Fairfax
10300 Eaton Place, Suite 120
Fairfax, VA 22030
You are on the right track. Talking with a lender now is going to help you decide which way to go. Conventional loans, FHA, USDA, VA etc. and create a plan.
In the spring some banks offer First Time Buyer Grants up to $10,000. This can help you a great deal. I have taken First Time Buyers out on exploratory home searches. This gives you an idea of the types of homes available and locations you want to live in. Then you can stay up-to-date every couple of weeks to see what homes will match your needs. Call me. I will be happy to give you the names of lenders that have grant money and help you succeed in buying your home!! 571-221-3684. Thanks, Dale
You may be a little premature in looking at properties, but it is never to early to contact a good loan officer to see what you would qualify for. Your full payment (principal,interest,taxes and insurance) has to fit under the qualifing percentage guideline. An FHA loan would generally give you the most buying power with its higher than conventional loan ratios. Happy to recommend a good loan officer to you.
Feel free to contact me at (703) 795-1705
Realty Direct LLC