5 Signs You’re About to Buy a Home You Can’t Afford

If you’ve noticed any of the five following signs occurring throughout your home search process, it might be an indication that you won’t be able to afford that home.

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During the home buying process, there are five signs to watch out for that indicate you’re about to purchase a home you won’t be able to afford.

1. The lender tries to get you to agree to creative financing terms. This could mean getting you into a balloon mortgage or adding a second mortgage—both are red flags.

2. You agree to a down payment assistance program without a true down payment saved up. This is a big mistake I’ve seen people make. Now, if you’re using a VA loan, that’s really good because you’re basically getting free money to borrow for no down payment. But often, down payment assistance programs can be a bad sign.

3. Due to an unfortunate incident, your savings have been diminished. In the event of a catastrophe like extreme car/home damage or loss of a job, you probably won’t be able to afford home payments in addition to getting those issues taken care of.

In the event of a catastrophe like extreme car/home damage or loss of a job, you probably won’t be able to afford home payments in addition to getting those issues taken care of.

4. Financing your down payment by borrowing from your 401(k), retirement account, Roth IRA, etc. These are signs you shouldn’t be purchasing a home yet.

5. You don’t have a good feeling about buying a new home. If you’re out looking for houses, you want to have a good feeling when you walk in. Make sure you’re buying the right house for you—don’t take advice from other people.

If you have any questions about affording a home or buying one in general, you can give us a call or send an email. We’d love to help you out.

10 Benefits of Owning a Home vs. Renting One

Buying a home is oftentimes cheaper than renting one. There are a ton of other benefits to buying, too.

Buying in Northern Virginia?  Get a Full Home Search Here

Selling in Northern Virginia? Get a Free Home Value Report Here

There are many benefits homeowners get that renters simply can’t. Here are 10 advantages of buying a home over renting one:

1. Predictable monthly house payments. Your landlord can change your rent each time your lease is up. With a mortgage, your payments are fixed for a period of usually 15 or 30 years.

2. Appreciation. Real estate appreciates about 3% per year on average.

3. Tax benefits. You can write off your mortgage interest on your taxes, which you’ll be paying down a lot in the first few years you own the home.

Real estate appreciates about 3% per year.

4. The freedom to make modifications to the home as you see fit.

5. Buying is typically cheaper than renting, especially in the northern Virginia area. 

6. Increased privacy. You can find a great property around here on a one- or two-acre lot. A lot of rentals end up being apartments.

7. You can build up a lot of equity in your house. If you ever need it, you can tap into the equity of your house to either make another purchase or sell for a big profit.

8. Community ties. There are a lot of active communities to get involved with as a homeowner. If you’re going to be in the area for a couple decades, meeting the neighbors isn’t a bad idea.

9. Secure retirement. By the time the mortgage is paid off, the payment is gone and you can sell to make retirement a lot easier.

10. You are the owner. This kind of goes back to No. 4, but there is a lot you can do to modify and personalize your home to your tastes that you wouldn’t be able to get away with if you were renting.

If you have any questions for us or you’re looking to buy or sell a home in northern Virginia, give us a call or send us an email. We look forward to hearing from you.

Waiting Periods After Short Sales and Foreclosures

With the election taking hold of the public’s focus, many have forgotten about the real estate market. We haven’t, and we’re answering a question about it today.

Buying in Northern Virginia?  Get a Full Home Search Here

Selling in Northern Virginia? Get a Free Home Value Report Here

Everyone seems to be so focused on the election these days that they have forgotten about the real estate market. We haven’t, so we want to answer a common question we’ve been getting lately.

During the market crash, a lot of homeowners had to go through the unfortunate situations of a foreclosure or short sale. While these things did prevent them from buying in the immediate aftermath, most of them are able to purchase now. So, how long do you have to wait to buy after a short sale or foreclosure?

A lot of it depends on the type of financing you had. For those who had a short sale with a conventional loan, they have to wait four years to buy a home. The waiting period for those with FHA financing is three years, and you only have to wait one year after a short sale to buy if you had VA financing.

Keep an eye on your credit card debt.

As for foreclosures, those waiting periods are a little longer on average. If you had a foreclosure and conventional financing, you will have to wait seven years. With FHA financing, you only have to wait three years. With a VA loan, you would only have to wait two years.

One big piece of advice I have for those of you trying to get qualified again after a short sale or foreclosure is to keep your credit card debt low. Don’t charge more than 30% of your debt to your card. Lenders don’t view those who max out their credit cards as reliable people to lend large sums of money to.

If you have any questions for me, don’t hesitate to give me a call or send me an email. I would love to hear from you.

3 Ways to Help You Buy a House With No Money Down

Buying in Northern Virginia?  Get a full home search here

Selling in Northern Virginia? Get a free home value report here

There are three different programs that exist to help you buy a house with no money down.

The first is a USDA loan. This is mainly for rural areas, and if you happen to live in one, you can have the Agriculture Department give you a loan for your down payment so you don’t have to come up with any money. What we also typically do is ask the seller during negotiations to pay all your closing costs, so aside from a few inspections, you’re saving a lot of money.

Another option, if you are or were once in the military, is a VA loan. With this, you don’t put any money down. It’s 100% financing, so you don’t have to bring any cash to the table. And again, any closing costs you might incur would be something we’d ask the seller to pay.

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Along with using these loans, we ask the seller to pay all your closing costs.

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Finally, there is the Virginia Housing Department 2nd Trust Program, wherein the Virginia Housing Department loans you a second trust for your down payment. This program does run out of money occasionally, but we still have plenty of lenders who use it.

As you can see, there are ways out there to buy a house with no money down and no cash being lifted from your pocket. If you have any questions about any of these programs, or you know anybody else buying or selling a home, give me a call. We’d love to help, and we hope you have a great summer.

What Influences Your Buying Power in Northern Virginia?

Buying in Northern Virginia?  Get a full home search here

Selling in Northern Virginia? Get a free home value report here

Today, I’ll focus on four specific things that help determine your buying power in Northern Virginia.

• Your credit score: As one of the most important factors in the buying process, I recommend checking your credit score. Oftentimes, these services offer advice on how to improve your score.
• Your down payment: You should know how much your initial down payment will be. A lender looks at this. Different types of loans don’t even require one, so it’s better to familiarize yourself with the requirements.
• Your debt-to-income ratio: This accounts for how much debt you have and how much income you bring in. This ratio determines if you’re able to pay off debt, and impacts what type of loan you’ll get.
• Your financial resources: One of the lender’s biggest concerns is whether or not a borrower has the means to pay back the loan. They’ll need to review your financial information to know.

If you’re thinking about buying or selling a home in the surrounding area, give me a call or send me an email. I’d be happy to answer any real estate questions you have!