Home Buying in 22033>Question Details

Eric Phillips, Other/Just Looking in Fairfax County, VA

First Time Buyer

Asked by Eric Phillips, Fairfax County, VA Tue Oct 2, 2012

I'm a first time buyer trying to get a better grasp on what I should be doing.
My situation - I have about 5k in the bank. I aproximate that by next August I will have about 20k saved. I currently make 38k a year before taxes. I have no debt execpt $800.00 on 1 credit card which will be paid off shortly. And my car is fully paid off. I also have a good credit score.
So I was wondering if I were to contact a lender/bank for a pre-approval and a real estate agent right now, would I just be wasting their time?
Ideally I'd like to get a place in the $250k/300k range which i estimate to be $1,700 or less a month. However I read an earlier post about .29% of your monthly wage being a factor? Well for me that would total out to $696 a month. And in Fairfax County you can't even rent a cardboard box with that. Am I just out of luck on this?
Side note - I want a place with 3 bedrooms so I can rent out 2. I plan on living their for a long time. Does this help at all?
Any advice would be great.

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Answers

13
$1700 per month won’t work but a back ratio of 29% is a lot lower than what DU will approve, I had one approved recently with a back ratio of 48%.

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,

Jim Simms
NMLS # 6395
JSimms@cmcloans.com
Financing Kentucky One Home at a Time
Web Reference: http://jamessimms.com/
1 vote Thank Flag Link Wed Oct 3, 2012
You can create a free account at my website: http://www.livinginfairfaxcounty.co, so that you can get listings on a daily basis. This will give you a better idea of what homes are available in the market right now and which one is a good fit for you and your budget. My lender will prequalify you, at no cost, and the preapproval letter is good for 90 days. Once you decide where you would like to buy a home and live, I can show the home and guide you through the process.
0 votes Thank Flag Link Tue May 7, 2013
Hi Eric.

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.

Best,

Chris

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
Email: chrisdudley@longandfoster.com
Shris Cell: (301) 655-1521
Email: shristhi.dudley@longandfoster.com
--
http://www.dudleyrealtor.com
0 votes Thank Flag Link Tue May 7, 2013
Good morning Eric,

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.


Good luck!
Trevor Curran
NMLS #40140
0 votes Thank Flag Link Wed Oct 3, 2012
Hi, Eric,

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, hjohnson@embracehomeloans.com, 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.
0 votes Thank Flag Link Wed Oct 3, 2012
Hi Eric,

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).

Thanks,
Sonal Goda
703-863-0031
0 votes Thank Flag Link Tue Oct 2, 2012
Eric, to add on to what I posted a few minutes ago; I live in the 22033 zip code so I know it well.
0 votes Thank Flag Link Tue Oct 2, 2012
Eric, the fact that you are inquiring early on is great! As a few agents who posted before me said, it's never too early to start planning. Buying a home will probably be the biggest purchase you make in your life so you want to be sure you are ready, willing, and able to do this. I want to help you reach your goal of being a homeowner and I have a lender on my team who would also love to help out. Give me a call when you have a chance and so we can go over details and set up a time to get together and go over some information that will be of great help to you. My number is 703-307-3449. I look forward to hearing from you!

Sincerely,
John Ginty
Realtor
Keller Williams Capital Properties Fairfax
10300 Eaton Place, Suite 120
Fairfax, VA 22030
Cell: 703-307-3449
JohnGinty@kw.com
http://www.JohnGintyRealEstate.com
http://www.Facebook.com/JohnGintyRealEstate
0 votes Thank Flag Link Tue Oct 2, 2012
I can create a free account for you at my website: http://www.livinginfairfaxcounty.com so you can view all available homes in the areas that you would like to purchase in. My lender, Michael Kenyon of Intercoastal Mortgage, have helped a lot of First Time Home Buyers acquire their first homes and we would be happy to prequalify you for the loan and assist you in your search for your dream home. Please feel free to call me at 703-269-8706 or via email at libanez70@gmail.com
0 votes Thank Flag Link Tue Oct 2, 2012
Hi Eric,
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
0 votes Thank Flag Link Tue Oct 2, 2012
Great idea to get started early. Find a local lender to get you qualified. FHA's ratios are much more generous than 29% depending on your circumstances. Feel free to contact me directly for any advice. You are definitely on your way to home ownership. We can also help with your closing costs with a 1% of the sales price credit at closing.
Glen Baird
703-691-7878
0 votes Thank Flag Link Tue Oct 2, 2012
Eric,
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
Don Stewart
Realty Direct LLC
0 votes Thank Flag Link Tue Oct 2, 2012
You have to watch where you purchase if you plan on renting out rooms! Better check first where that is allowed. Condos or townhouse maybe/ Parking can be a problem. Check with a lender to see what you can purchase. Rates have never been so low! I'd be glad to help you1 Been in the business over 27 years!
0 votes Thank Flag Link Tue Oct 2, 2012
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