FINANCING YOUR HOME IN LOUDOUN COUNTY
Information about different types of home loans.
Q. ARE FIRST TIME HOME BUYER PROGRAMS AVAILABLE IN LOUDOUN COUNTY?
Q. ARE "SHORT SALE" OPPORTUNITIES AVAILABLE IN LOUDOUN COUNTY?
Q. ARE FORECLOSURED HOMES FOR SALE IN LOUDOUN COUNTY?
Q. HOW MUCH CAN I BORROW?
Q. HOW DO I CHECK ON MY CREDIT?
Q. HOW MUCH MONEY DO I NEED TO BUY A HOME IN LOUDOUN COUNTY?
Q. CAN I FINANCE MY CLOSING COSTS?
Q. WILL I HAVE TO PAY PRIVATE MORTGAGE INSURANCE (PMI)?
Q. CAN I PAY MY DOWN PAYMENT WITH MY CREDIT CARD?
Q. DO I NEED TO BE PRE-APPROVED BEFORE LOOKING AT HOMES IN LOUDOUN COUNTY?
Q. Are First Time Home Buyer Programs Available in Loudoun County?
A. YES. The VHDA, the Virginia Housing Development Authority, offers programs for First Time Home Buyers with lower interest rates for eligible home buyers.
Q. Are "Short Sale" opportunities available in Loudoun County?
A. YES. There are about 75-100 homes actively listed as short sale listings in Loudoun County. Homefinders can help you find the best one. We know the process and will guide you from search to settlement. You may expect to save about 5-10% from market value on a short sale. The bank must agree to accept the seller for a short sale and the bank must agree to the price. It is not automatic.
Q. Are Foreclosed homes for sale in Loudoun County?
A. YES. There are about 175-200 foreclosures for sale in Loudoun County. Homefinders can help you find the best one for your money. Most foreclosed homes have been discounted by the bank owner because of condition. These homes are sold "as is" but there are bargains to be found.
Q. How much can I borrow?
A. Depending on your income and credit score, you should be able to borrow approximately 3 to 3 1/2 times your annual gross income. $100,000 annual income times 3.5 = $350,000. This is an estimate. Actual borrowing power is a combination of your credit score, your annual income, your fixed monthly debt payments and savings for down payment.
Q. How do I check on my credit?
A. There are numerous on line resources to obtain a credit report. The most well known is probably the Equifax company. Homefinders.com agents will help you obtain a FREE credit review from a known and trusted lender. Once you have been credit approved, you'll receive a "Lender's Letter" which is necessary before you can buy a home in Northern Virginia.
Q. How much money do I need to buy a home in Loudoun County?
Closing costs in Loudoun County are approximately 2.5% of the purchase price to the buyer, PLUS the down payment which can vary from Zero to 5, 10, 20 percent or more. This does not include any points to the lender that buyer may elect to pay in advance to reduce the interest rate and monthly payments. EXAMPLE
Q. Can I finance my closing costs?
A. Yes. Lenders offer loans that are 100%, 103% and 107% of the purchase price of the home you wish to buy. You will actually finance your closing costs and down payment by paying a slightly higher interest rate. This is not a bad solution for home buyers who have good income, good credit but little cash. The interest on the loan is tax deductible and you benefit by accruing equity in your home. Home loans with no down payment have become more difficult to obtain following the mortgage mess of 2007. Lenders are requiring higher fees, higher credit scores and better financial disclosure. Homefinders.com can refer you to qualified lenders that will make sure you get a good loan for the type of finacing you need.
Q. Will I have to pay Private Mortgage Insurance (PMI)?
A. Probably not. Private mortgage insurance is required from borrowers who borrow more than 80% of the purchase price of the home they are financing. Lenders can offer loans that combine the 80% First Trust and a 20% Second Trust. Interest on the Second Trust will be slightly higher than the First Trust, but the interest payment is tax deductible and the home will be appreciating from the day you settle your home purchase. Mortgage loan is deductible for 2008 tax returns. This tax exemption may be extended again.
Q. Can I pay my down payment with my credit card?
A. Probably not. The charge on the credit card would have to be included in the debt ratio and could cause you to fail to qualify for a loan. However, if the lender knows that you are taking the loan from the credit card provider and it is included in your income to debt ratio, you can withdraw money from the credit card line of credit, deposit that money in your bank account and the lender will then have the "paper trail" for your credit transaction and if the loan meets the income to debt ratio for your particular type of loan, that is permissible.
Q. Do I have to be Pre-Approved before looking at homes in Loudoun County?
No. You need to be "PRE-QUALIFIED" before writing an offer on a home because you'll need a "Lender's Letter" to show that you have had a credit review. That satisfies the seller that, if they accept your contract, the contract will get to settlement. Loudoun County real estate sells very fast and most sellers will only consider a pre-qualified buyer's offer.
MORE QUESTIONS??
Contact Homefinders.com at 800-711-7988 or email homefinders.com if you have additional questions about mortgage financing. We can help.
Many loan instruments are available for home buyers in Loudoun County today. Conventional loans with rates fixed for 30 years, 10 years, 7 years, 5 years, 3 years, 1 year and several combinations of fixed and Adjustable Rate Mortgages (ARMs). Terms may be for 10 years, 15 years or 30 years or 40 years, with the amortization of 30 years the most popular.
CONVENTIONAL MORTGAGE LOANS IN LOUDOUN COUNTY
By far the most popular loan type to buy a home in Montgomery County is the Conventional loan. These loans generally follow the Fannie Mae guidelines. Many of the Fanny Mae guidelines are designed to protect home buyers. However, many of the guidelines that lenders follow are designed to protect lenders. The guidelines require that buyers be credit worthy to reduce the likelihood of default.
JUMBO CONVENTIONAL LOANS
These loans conform to the Fannie Mae guidelines for eligibility, meaning that, on average, the buyers may devote up to 28% of their before tax income to housing. These loans generally require a down payment of at least 5%. In exchange for a slightly higher interest rate, the lender will lend you money with no down payment and will even pay your closing costs. The higher interest rates are deductible and are often a good buy for folks with good income, good credit and little cash. CONTACT US for more information about Jumbo or Super Jumbo loans.