Home Buying in Alexandria>Question Details

Federalworker, Renter in Alexandria, VA

Single, continue renting or start looking for a home?

Asked by Federalworker, Alexandria, VA Thu Nov 24, 2011

I was looking for single-family homes around my area, but I felt that buying a home is really meant for those couples with double income. I want a place that I can really call my own and have more privacy than that of apartments or townhomes I work with the government and I really feel I have a steady job at 80k/year. My credit is >800 but how would a lender feel about giving me a loan seeing as I only have one source of income and maybe do a 10-15% downpayment?

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I would ask one more question before giving you a recommendation…….

How long do you plan on owning this property?

If you plan on owning 3 years or less, then I would recommend to continue renting……..
Anything longer than that, buying becomes a viable option but all your unique needs should be taken into consideration to get a big picture.

As far as what you should buy, well that will depend on many aspects of you specific criteria in a home and location of that home. The first most important aspect will be what price range you can afford and then go from there.

Find a great agent and a good lender to take you to the next steps.

Below is a link to an article I have written that may be useful to you, explaining what “Buyer Beware” is in the state of Va.
0 votes Thank Flag Link Tue Nov 29, 2011
Federalworker,

Buying a home is an important step. however to buy a home you must have a series of variables aligned and it seems that you do have it at this time. So, that is a clear advantage.

There are a lot of factors to consider, how much are you paying in rent? how much will you like to pay in your mortgage? Take into consideration the tax break that you will get with the mortgage that you are not getting renting.

Market definitively is on your side, most likely prices will stay in the same area for a while so no need to rush based on that. The interest rates at this moment are great, this I think it will go up sooner than later.

What I would suggest you is to start looking into the market with no rush, get familiar with neighborhoods and prices. By doing so you will get an educated eye and you will determine if an opportunity comes by.

Good luck!

Rosina
2 votes Thank Flag Link Fri Dec 9, 2011
Hi Renter,
From the information you've posted, you should be easily able to qualify for a mortgage loan, and that would be the first step. Find a local lender(s) and go through the pre-qualification process. Ask for a worksheet outlining all the costs in a transaction for a single family home in the price range you think you'll fit. Once you've had an opportunity to review this data, you'll know where your comfort zone lies in terms of price. Then interview Realtors and find someone you think you'll work well with. Remember that the buyer's agent's commission is typically paid from a split of the listing agent's commission, so under normal circumstances, there should be no cost to you for expert representation. There's a step-by-step on my website.
0 votes Thank Flag Link Wed Dec 14, 2011
Federalworker,

As long as your debt ratio is within limits, it's not anything to worry about. A good lender can sit down with you and walk you through the pre-approval process so you know what you qualify for. Based on your credit, income, assets/down payment you will qualify for "X" loan amount. It's important to also figure out what your monthly budget would be for a mortgage and I make sure my clients take into consideration taxes, insurance, mortgage insurance(if any), HOA/CONDO fees(if any) and the additional expenses of owning a home like lawn maintenance, utilities, unexpected repairs, etc. That is in addition to all of your other living expenses!

So, you can tell a lender you would like your total monthly mortgage at "X" and based on your credit, income, assets, down payment, debt ratio, property type, tax rate, estimated hazard insurance he should be able to give you a sales price/range to stay in.

If you would like more details on the pre-approval process take a look at my article here:
http://www.trulia.com/blog/elliott_r_oliva/2011/12/pre-apppr…

For more questions or to schedule a free consultation contact me at your convenience.

Elliott R. Oliva
Mortgage Banker
NMLS Lic. #353884
Primary Residential Mortgage
202-681-1636 direct
eoliva@primeres.com
"Se habla Espanol"
0 votes Thank Flag Link Mon Dec 12, 2011
0 votes Thank Flag Link Tue Dec 6, 2011
You are in an excellent position to purchase a home. Lenders are concerned with one thing. Are you qualified to purchase a home. From the information that you have given you are qualified. The lenders are interested in how you pay your bills (your credit score tells that story), your income and your debt to income ratio. .
0 votes Thank Flag Link Mon Nov 28, 2011
Hi, You sound like an excellant candidate for homeownership in todays market. There are many types of loan products out that so speak directly with a loan officer to find out your options. Your credit plays a big part in what you will qualify for and with rates at %4 right now it's an amazing opportunity.

Christopher Pagli
Licensed Associate Broker
Accredited Buyer Representative
GREEN Designated Agent
William Raveis Legends Realty Group
914.406.9023
0 votes Thank Flag Link Mon Nov 28, 2011
My colleagues below have given some excellent answers. What I might add is that if you are single..and active..a detached home can sometimes take a bit more of your time than a town home! The maintenance will be more but the potential for maintaining/rising value may also be more.

Yes you may have more privacy..but with the income you are speaking of..the location(s) available for an affordable detached product may not be as good as an affordable attached product.

If you would like to do a comparison..feel free to contact me and I would be happy to show you.

Kind Regards,

Erik J. Weisskopf, ABR,CDPE,CRS,GRI
Erik@AskMeAboutHomes.com
703.216.1222
0 votes Thank Flag Link Mon Nov 28, 2011
You would have no problem getting a loan ... of course it will be based on your overall income and credit. The real question is can you afford the type of home you want #1 and #2 do you expect to be in the area for at least 5+ years. If the answer to both is yes, go ahead and start looking. If the answer to either is no... then rent.
0 votes Thank Flag Link Sun Nov 27, 2011
The first question that I ask all of my buyer clients is how long do you plan to stay in this house, if you were to buy today. During the boom, if you were here for 2 years or more, we said you HAD to buy. Home owners were making 30-40% appreciation a year in some areas. Many of my government and military clients here on 2-3 year tours made lots of money during this period. Now, in order to recoup your costs, you're looking closer to 5-7 years. The next question is if you were to buy today and had to move before your 5-7 years were completed, would you be able to rent this property. This will depend on how much money you are putting down to purchase your home. If you're putting your entire life savings and you move to another state, you may need the proceeds from your house to purchase again and would have to sell your current home.

I love investment property, so I try to structure my client's purchase to be able to rent at a profit should you have to relocate before you originally planned on leaving. This just takes an experienced agent to guide you through the economics of what makes a smart purchase for both a principle residence and an investment property.

All of that aside, you will get financial benefits from being a home owner versus a renter. The Housing Affordability Index is at an all time low and Interest rates are still quite low. There are many great loan products that allow buyers to purchase with less than 20% down these days.

The best step is to sit down with an agent and lender to discuss all of the nuances of your situation in person. This should be a no obligation, detailed, meeting to help guide you into making the smartest decision for you. A lot of renters really should remain renters and a lot should be buying; we're here to help you decide which category best fits you.

Good luck with your decision, Brenda Stone
0 votes Thank Flag Link Sun Nov 27, 2011
Hi

There are a number of people in your same boat, single incomes that buy homes. Buying a home is a big decision that needs to be thought and weighed out. There is more than the financial decision that goes along with buying a home, there is also the social and lifestyle decision. How long do you plan to be in the house? If it is more than 3+ years than buying, especially right now with rates as low as they are would probably make good financial sense if you plan to stay in the area. In addition there is the financial benefit of home ownership with tax breaks. Right now with it being a strong rental market, you might be able to get a mortgage for the same or less than paying for a rental. Other things to consider: How much would/do you qualify for? Have you thought about neighborhoods you want to live in? Features that you must have in the home vs would like to have?

I just had a client, who is a single individual purchase a single family home, so yes it can and is done all the time. I would recommend you talk to a lender to two so see how much you can get qualified for and what the payments would be, so you can start looking at places and know what is in your price range.

Please feel free to drop me a line if you have any questions or need any assistance.

Thanks

Melissa
mbarkalow@comcast.net
202.285.9479
0 votes Thank Flag Link Sat Nov 26, 2011
There are a lot of opportunities out there. I'll give you a few things to think about. I bought my first house when I was 25, single, in the Navy and getting ready to deploy - it was still an excellent financial move for me. All your personal goals and circumstances need to be considered but if you have a steady gov't job and plan to stay in the DC area, now is the time to buy.

Most of what I will talk about has to do with finances.

Consider the cost of renting vs. owning. At 4%, 30 mortgages are almost free money - inflation is higher than that and your interest rate is locked in for 30 years. Your rent will always go up and you get nothing back when you leave. Its the Federal Reserve's and Government's policy to inflate so your cash will only be worth less in the future, not more. Real estate is a hard asset with intrinsic value that will adjust (up) with inflation. Real Estate is a great inflation hedge.

Consider taxes. At $80k a year with no deductions, I'm sure you are paying a lot in taxes. With the mortgage interest tax deduction, you will shelter some of your income from taxes and put the money to work for yourself paying off the home.

Make sure you know about the FHA 203k loan. Its a home renovation loan that allows you buy a home as is and include all the costs of repairs in with one easy mortgage. I've helped clients creates tens of thousands of dollars of equity with this loan program. Before you look at houses, make sure you know about this loan program. Not only can it give you an incredible financial boost by moving in with equity but it can create the best possible lifestyle for the least amount of money because you can move into a brand new renovated home rather than one that needs a lot of "sweat equity." With this loan, you can have both - new home and equity.

In many cases, its also cheaper to buy than rent. There are two things to consider with that benefit. First, its cheaper for you to buy than rent. Second, you now have an asset that you can rent for positive cash flow if you decide to move, relocate, get married an buy a new home, whatever the case may be. Third benefit of that is with a rental property, you can form a business around that rental property and save even more on taxes.

I talk a lot about taxes because its not how much you make, its how much you keep.

With all that said, home ownership is a lifestyle choice so its not just about the money. Its about the lifestyle you want to have. Only you can put a price on that. Good luck. I'd be happy to talk to you more about 203k homes or buying in general. Check out the website below for some before/after pictures and a great renovation video of some of my clients homes.

Good luck!
Chris
0 votes Thank Flag Link Fri Nov 25, 2011
As described, you apear to be a very good candidate for a mortgage....buying vs renting is one of the age old questions that individuals often wrestle with and often comes down to two important factors....needs and means. What are you looking for as a residence that would enhance your quality of life and can you afford it.

With housing prices coming down as they have and the existance of great numbers of opportunities to purchase at excellent savings many people are seeing this as the perfect time of getting into home ownership. However, this decision comes down to your needs, desires, and financial means.

You may find it helpful by meeting with several loan specialists to find out about programs and rates that will suit your needs...This may clear the way for you to make the right decision.

Hope this is helpful.

Bill
0 votes Thank Flag Link Fri Nov 25, 2011
It would apprear that you are very well qualified to purchase. There is no discrimination against a "single buyer" and with historically low interest rates, this is a wonderful opportunity to buy. Please contact me if you would like to discuss particulars.

Diane G. Murphy, Broker
703.684.7297
DGM Properties, Inc.
Licensed in Virginia, Maryland and DC
0 votes Thank Flag Link Fri Nov 25, 2011
It has been said that renting is a lifestyle decision while buying a home is an investment decision. From your comments, it appears that you're leaning to making an investment decision in your future. You're paying a mortgage now - it's just not yours so you're getting none of the tax benefits of home ownership. I highly recommend you contact a Realtor and I reputable mortgage lender and start the process. It's a great time to become a home owner - interest rates are as low as they've ever been the selection of homes is very good prices are competitive. I'll be delighted to help.

Joe Gillis
REMAX/Regency
540 878-9573 (cel)
JoeGillis@remax.net
Web Reference: http://Homes.JoeGillis.net
0 votes Thank Flag Link Fri Nov 25, 2011
There are MANY single first time home owners and for that matter, many single second and third time home owners in Alexandria! You should be fine with puchasing a home with your credit score and income providing you do not have a high debt to income ratio. Would be more than happy to help you with a lender and with finding a special home!

Sue Feinthel
Weichert, Realtors - Old Town
121 N. Pitt Street
Alexandria, VA 22314
703-819-1964
suef@mris.com
0 votes Thank Flag Link Thu Nov 24, 2011
The simple answer: Mortgage rates are at historical lows (4%) for 30 year fixed loans. Prices are 40% off of the high marks before the housing downturn. The last 3 quarters of 2011 have witnessed stabilized prices throughout Northern Virginia. It's always possible for prices to go lower. But not likely due to available inventory (see attached link). Mortgage rates cannot go lower at this point or it would not be profitable enough for underwriters to fund home loans. Your income, credit score, and down payment look good. I encourage you to contact the lenders we work with. They are the best we've worked with for the past 12 years. Contact information is available on one of our websites: http://www.themoyersteam.com. We would be happy to work with you as well.

Dwayne and Maryanne Moyers
Top 2% of Realtors Nationwide
Avery-Hess Realtors (6 Offices in Northern Virginia)
http://www.MaryanneMoyers.com
http://www.NotYourTypicalRealtor.com
http://www.facebook.com/themoyersteam
Maryanne: mmoyers@averyhess.com
Dwayne: moyersteam@gmail.com
0 votes Thank Flag Link Thu Nov 24, 2011
Speaking for happy single homeowners like myself, I say, "Why wait?" I've sold many homes -- detached, townhomes, condos -- to both single men and women. From a mortgage qualification standpoint, having only one source of income (your own) is no barrier at all. And a 10-15% down payment is absolutely fine in this area. Lenders will examine many different aspects of your personal financial situation, but you certainly sound as if you wouldn't experience any challenge in being approved. In the current market, after ensuring that you're financially secure enough to make a home purchase, another important factor to consider is how long you would plan to stay in the home. Generally speaking, if you are confident you can commit to remaining in the same home for at least 3-5 years, it's a good investment to make. You're fortunate to live in an area of the country where our home sales have remained steady and where real estate should remain strong, thanks in no small part to the large number of government and government-related employers. I've worked with many first-time home buyers and, as mentioned, many single buyers -- if you have more questions or would like to visit, please don't hesitate to reach out to me. Happy Thanksgiving!
Web Reference: http://www.pegbell.com
0 votes Thank Flag Link Thu Nov 24, 2011
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