Buying A Home

What You Need to Know Before Buying a Fixer-Upper

How To Buy A Fixer-UpperFixer-uppers can offer the best of both worlds to many buyers. Buying an older home lets them save money, and give them a chance to use their handyman skills. The process of fixing up a home also lets buyers learn and develop new skills as well. But there's a darker side to houses that have seen better days - one that buyers sometimes fail to see. Before falling in love with a money pit, it's time to develop a game plan.

Look for Solid Bones

Whether a homeowner is fixing the home for themselves or to resell the home for a profit, experts say that the best fixer-uppers are those that need cosmetic improvements. Refinishing a floor, painting a room or redoing drywall are all simple projects that can be done quickly, and the differences can be truly night and day to the inhabitants. This will also help in securing financing through 203k home loan, which has firm lending limits.

The same can be said for replacing the lighting fixtures, changing the shutters, replacing the doors, or updating the siding of the home. The only problem is that most buyers are already looking for houses with solid foundations and building blocks, so that means it may be difficult to score a get a deal (especially in a competitive market.)

Consider the Averages

All buyers will need to do the math of how much it will take to renovate a space compared to how much they'll spend on the home. The best way to make these calculations...

Is Buying a Single-Family Home or a Condo the Right Choice?

Is Buying a Single-Family Home or a Condo the Right Choice? Many individuals want to compare their options when deciding what properties to consider when purchasing a home. Both single-family homes and condominiums can be great choices. The decision boils down to the specific needs of buyers. What are some of the considerations home buyers should keep in mind when determining which type of home will best suit their needs?

Explore the advantages of single-family homes and condos as you determine your choice.

Save Time on Maintenance with Condos

Those who choose to own a condo can avoid many of the routine maintenance tasks that owners of single-family homes must deal with. With condo living, the association hires individuals to handle landscaping, snow removal, yard maintenance and more. This does come at a price as condominium owners pay dues, but it frees owners of the some of the regular responsibilities often part of owning a home.

Single-family homeowners have more say in the maintenance and care of their property. Individuals can choose to mow the lawn themselves or hire others to perform the service. If a single-family homeowner does not care for the work of the individual, they can easily find a replacement. This is not such an easy situation for the average condominium owner.

Fewer Restrictions with Single-Family Homes

Those choosing a single-family Sterling...

When Is It Best to Buy or Rent a Home?

When Is It Best to Buy or Rent a Home?Many renters dream of buying their own home and no longer having to deal with a landlord or property manager. A good number of families currently rent; over a third of households rent. Both renters and home owners can live in comfort and privacy.

When might be the best time to make the leap to owning a home? Explore the following factors today.

Are You Ready to Pay?

In order to be approved for a conventional home mortgage, applicants may need to put up as much as 20 percent of the purchase price. In addition to this significant cost, approved applicants looking to close on a home will needs to pay additional fees, moving and closing costs with the purchase of a home.

There are mortgage loans available requiring little to zero down as a down payment. Specific eligibility requirements apply but a VA loan or USDA loan may make home ownership more affordable for the first-time home buyer. There are a number of upfront costs to buying a Reston home and those who cannot afford to put 20 percent down may need to pay mortgage insurance premiums until there is a satisfactory amount of equity in a home. Renting while saving up for a larger down payment may be one way to reduce additional costs associated with making a smaller down payment.

What is Your Credit Score?

A person's credit score is one of the...

USDA Home Loans: What You Need To Know

USDA Loan

There are many different ways to buy a house, and most people who make a purchase of this size will need a mortgage to complete their purchase. With that in mind, though, there are several different mortgage options for buyers to consider. Among these is the USDA loan, which is not generally heard about as much as FHA or VA loans, along with standard mortgages. The USDA loan is backed by the United States Department of Agriculture, but not every person or every property will qualify. Here is what buyers need to know.

Who is Eligible for a USDA Loan?

Both single people and couples can be eligible for a USDA loan. They do not need to be veterans or part of any particular group of people. They do, however, need to have specific income levels and choose a qualifying property. If they do those things and meet those requirements, they can be eligible for a USDA loan.

This is not based on age, gender, race, type of work performed, education, or anything else, and only on the property and the income levels of the people who want to buy a home. Buyers also need to be without good housing now, and show that they have a credit history. This is still a mortgage, and people must qualify – but the rules for qualification may be easier than for other mortgage programs.

What Are the Income Guidelines?

The income guidelines vary based on the number of people in the household and the...

How Does a 203k Loan Work? Home Renovation Loans Explained

Using a 203k Loan to Refurbish Your Fixer-Upper HomeSome people want to buy a home and fix it up at the same time, however, making repairs and upgrades to a home involves additional expenses—some anticipated, some unforeseen. While fixer-upper homes often come at a reduced cost, the additional expense in repairs can make such homes easily as expensive as buying homes that are move-in ready. Buyers who seek mortgages guaranteed by the Federal Housing Administration (FHA) should know that 203k loans may allow them to get a loan to purchase a home, and also pay for home improvements.

What Is a 203k Loan?

Buying a fixer-upper can be a bit tricky for a lot of buyers with limited funds. Lenders are often reluctant to grant a loan on a home that may not even be safe for a buyer to live in until the repairs have been made. However, buyers who are willing to take on the work may be able to turn the liability into a secure property that is worth far more than they paid. With a 203k loan, people can get money insured by the FHA to buy a home and improve it immediately, or to get funds to improve their existing homes.

How Does a 203k Loan Compare to an FHA Loan?

Although 203k loans and FHA loans are guaranteed by the same institution, they are not the same kind of loan. FHA loans are granted to borrowers who are looking for a primary residence that meets current FHA loan limits. Although...

A Guide to VA Loans: What Veterans Should Know When Buying a Home

What Buyers Need to Know About VA LoansThere are a number of great ways to finance a home, and one of the options for some buyers is a VA loan. This is a loan through the Veterans Administration, and it is only open to certain people. Since not everyone will qualify for a VA loan, the first thing a buyer will want to do is find out if they are eligible. Their real estate agent can help them with that. If they can use the VA loan system, then they can begin the pre-qualification process and start exploring how much they can borrow and what other requirements they may need to meet. That can help them be more prepared to make an offer on a home, get it accepted, and get their loan closed in a timely manner, so they can move into a great new place. Here are the basics you need to know about VA loans.

Who Qualifies for a VA Loan?

A VA loan is open to veterans and their families. For people who have served or are serving in any branch of the military, this type of loan can give them an opportunity to purchase a house with little to no money down. That can, of course, make a big difference in whether someone can get a home, especially if they do not have a lot of money to spend or they don't have a big down payment. The interest rate is also generally good on a VA loan, and the credit score restrictions are more lenient than some other types of mortgage loan products when buying an Ashburn home or a home anywhere.

What is the Process for Getting a VA Loan?

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FHA Basics: What You Need to Know

What to Know About FHA Home LoansThe Federal Housing Administration guarantees loans that allow many interested buyers to get into real estate ownership. FHA loans can be beneficial, but they also feature limitations that buyers should understand. This guide covers what to expect from FHA loans.

What Are FHA Loans?

Although homebuyers often hear reference to FHA loans as they begin to research the process of getting a mortgage, the FHA does not actually lend money to borrowers. Instead, the Federal Housing Administration guarantees loans that lenders make to certain qualified applicants. This encourages lenders to grant mortgages to people who might not otherwise be able to qualify to buy a home, due to their income, credit history, or ability to make a large down payment. FHA loans do not make lending less expensive or easier for buyers to make mortgage payments. Instead, they limit the expenses that buyers must cover in order to get a home, and relax the lending requirements to promote accessible homeownership.

Who Qualifies for FHA Loans?

People who have applied for traditional mortgages often find that they are expected to have a higher income, a better credit score, or more assets in reserve to get the best loans. By comparison, the FHA makes borrowing more accessible to a wider range of buyers. Applicants should have the following:

  • A credit score of at least...

Bad Credit? Don’t Give Up on Homeownership Just Yet

How Individuals with Bad Credit can Work Toward Buying a HomeWhen unexpected emergencies come up, it can be difficult for many of us to get back on track. Paycheck-to-paycheck situations often make it nearly impossible to plan for out-of-the-ordinary expenses, and when things start to fall behind, it can severely impact one’s credit score. What’s even more unfortunate is that situations like this can place one’s financial future in jeopardy and make buying a home a difficult task to accomplish. However, there are programs available that offer assistance to individuals who have bad credit no matter what the cause.

Who To Work With

Most of the programs available for buying a home with bad credit are backed by the government, and while you still need to meet certain qualifications, they aren’t nearly as strict as other traditional routes. In many cases, programs like FHA or USDA require a credit score of around 580 or higher, which is far lower than most, but it still requires that some of your ducks are in a row. Many of these programs require little or no down payment as well, which further helps individuals to qualify to buy a home, be it in Leesburg or elsewhere.

Others with scores lower than 580 aren’t out of options entirely, as some utilize a rent-to-own...

Ready to Buy Your First Horse Property? Start With These Tips

What to Know When Buying Land for HorsesWhether horses are your business, hobby, or both, making sure you purchase the right property to house them is extremely important. Equestrians must consider not only whether a horse property has a safe, secure stable or housing, but also whether the land can also supply the proper amounts of mineral-rich pasture for grazing, access to fresh water, and a topography that will allow the horses to be exercised and ridden without risk of injury.

If you are preparing to purchase your first horse property, the following tips will help ensure that you choose the property that has everything your horses need to be live long, healthy lives.

Choose a location that will provide the basics of proper horse care while meeting any government regulations regarding livestock and biosecurity

It can be difficult to pinpoint the best location for a horse property. In addition, prospective buyers must make sure that their plans for the property will be in full accordance with any governmental regulations regarding livestock or biosecurity policies for properties that house and keep animals, including horses.

Select a property size that will comfortably support the maximum number of horses expected to be housed there

Once the general area has been chosen and there are several properties under consideration that meet any existing governmental policies, the actual size of the property...

How to Handle a Toxic Mold Problem in Your Home

Dealing with Toxic Mold in the HomeMold remediation is big business today. Part of the reason is that toxic mold can have serious health consequences, with symptoms that range from headaches, skin rashes and eye irritations to serious allergic reactions, asthma and lasting lung issues.

The underlying problem is moisture, and once mold spores appear, it can be very difficult to eliminate them or completely counteract the environment that gave birth to them. Even in the desert, mold and mildew can thrive in dark, damp corners of a home: Under the sink, near an air conditioner, or in a water heater closet.

Diagnosing a Problem

Detecting mold can be difficult, but a "sniff test" is often the first clue, particularly in a basement or garage, around plumbing fixtures and in utility rooms. If you have recently moved to a new Fairfax home and family members are plagued by red eyes, runny noses, irritating coughs or general malaise, suspect mold, especially if you don't normally suffer from allergies. There are different types of mildew and mold, and infestations can spread quickly.

According to the Environmental Protection Agency, small patches of mold can often be treated successfully by a homeowner or handyman. Once the source of the mold has been determined—usually a leaky faucet or hose bib, or a dripping water line—and fixed, the next step is clean up and repair. You can scrub a moldy wall...

Why Buyers Should Get a Home Inspection

The Importance of Home Inspections for Home BuyersBuying a home can be a process, and, whether or not buyers are concerned with the condition of the home, they generally use the services of a home inspector. The inspector can tell the buyer what problems the home is likely to have and what the remedies for those problems likely entail. Of course, home inspectors don't always catch everything—some issues may require a specialized inspection in addition to the original inspection. To some, it may seem like an extra expense, but the inspection can truly help out a buyer and protect their investment. Here are just some of the reasons a home inspection should be performed.

All the Big Systems Need to Work Right

One of the main reasons for getting a home inspection is to know that all of the big systems in your Centreville home are working correctly. The air conditioning and heating are important, but so is the electrical system and the plumbing. If those things don't work right the home may not even be livable, and it's clear that the home may be worth less than what the buyer is asking. With that in mind, a home inspector can test all of those systems more thoroughly than a buyer, and they are trained to look for certain types of problems that an untrained eye may not catch when looking over the home and considering a purchase.

The Inspection Can Mean Negotiation With the Seller

If there are ...

What You Need to Know About Down Payments

All About Down Payments for Home BuyersFor better or for worse, making a down payment is an essential part of almost every home buying experience. Because most people don’t have tens or hundreds of thousands of dollars readily available to buy a home, buyers typically need to go to either a bank or a loan agency for help. Whomever the buyer goes to will ask that they have a down payment prepared, which is a set amount of money the home buyer needs to have prepared upfront before they can purchase a home. Before rushing to the bank, here’s some things to remember when it comes to making a down payment.

How Much Does a Down Payment Cost?

The average loan agency will ask that a home buyer pay 20% of the home’s total cost up front, so if a home is valued at $300,000, the appropriate down payment would be $60,000, and the remaining money will be loaned to the buyer by their bank or agency of choice and become the buyer’s mortgage to pay back in monthly increments, and because the money is being loaned, the buyer will also have to pay interest on it. 

Can I Pay Less Than 20%?

Yes. It is possible for home buyers to pay as little as 3% as a down payment. These down payments are particularly attractive to first time home buyers––be...

Buying a Home When You’re Self-Employed

How to Apply for a Mortgage When Self EmployedBeing your own boss is becoming more and more desirable and easier to achieve as years go on, yet it doesn’t always bring all positives. Choosing to become self-employed is a great option for many, but it creates more work when it comes to tax time and making large purchases. Those who try to buy a home while self-employed might find that the process isn’t as easy as it is for those with a traditional paycheck.

Going Through The Mortgage Process

While on the surface the same paperwork is still used and many things look the same, trying to get a mortgage while self-employed does bring in a few nuances that can make a big difference to the end result. Most people know that getting approved for a home loan largely depends on one’s income, and that generally speaking, the larger the income the more money can be loaned.

When a self-employed individual applies for a home loan, instead of providing a W2 like many others, they are required to submit two years of their taxes, including all of their business write-offs. Ultimately this means that due to business expenses, the documentation will reflect their net profits to be much smaller than they actually were. This can lead toward a smaller dollar amount being approved, or even a denial if the numbers just aren’t favorable.

Lenders will also look at the history of the business,...

Is Getting a Home Mortgage Still Too Difficult?

Getting a Home Mortgage

There is no doubt that mortgage credit availability is expanding, meaning it is easier to finance a home today than it was last year. However, the mortgage market is still much tighter than it was prior to the housing boom and bust experienced between 2003 - 2006.

The Housing Financing Policy Center at the Urban Institute just released data revealing two reasons for the current exceptionally high credit standards:

  1. Additional restrictions lenders put on borrowing because of concerns that they will be forced to repurchase failed loans from the government-sponsored enterprises or Federal Housing Administration (FHA).
  2. The concern about potential litigation for imperfect loans.

What has been the result of these concerns?

6.3 Million Less Mortgages

The Policy Center report went on to say:

“It was so hard to get a mortgage in 2015 that lenders failed to make about 1.1 million mortgages that they would have made if reasonable lending standards had been in place. From 2009 to 2014, lenders failed to make about 5.2 million mortgages thanks to overly tight credit. In total, lenders would have issued 6.3 million additional mortgages between 2009 and 2015 if lending standards had been more reasonable.”

In an interview with DSNews, Laurie Goodman and Alanna McCargo of the Policy Center further explained:

“Our Housing Credit Availability Index (HCAI)* measures the probability that mortgage borrowers will become delinquent on that mortgage for 90 or...

3 Questions to Ask Before Buying Your Dream Home

3 Questions to Ask Before Buying Your Dream Home

If you are debating purchasing a home right now, you are probably getting a lot of advice. Though your friends and family will have your best interest at heart, they may not be fully aware of your needs and what is currently happening in the real estate market.

Ask yourself the following 3 questions to help determine if now is actually a good time for you to buy in today’s market.

1. Why am I buying a home in the first place?

This truly is the most important question to answer. Forget the finances for a minute. Why did you even begin to consider purchasing a home? For most, the reason has nothing to do with money.

For example, a recent survey by Braun showed that over 75% of parents say “their child’s education is an important part of the search for a new home.”

This survey supports a study by the Joint Center for Housing Studies at Harvard University which revealed that the four major reasons people buy a home have nothing to do with money. They are:

  • A good place to raise children and for them to get a good education
  • A place where you and your family feel safe
  • More space for you and your family
  • Control of that space

What does owning a home mean to you? What non-financial benefits will you and your family gain from owning a home? The answer to that question should be the biggest reason you decide to purchase or not.

2. Where are home values headed?

According to the latest Home Price Index from CoreLogic, home values are projected to increase by 5.3% over the next 12 months.

What does that mean to you?

Simply put, if you are planning...

Have You Saved Enough for Closing Costs?

Have You Saved Enough for Closing Costs?There are many potential homebuyers, and even sellers, who believe that they need at least a 20% down payment in order to buy a home or move on to their next home. Time after time, we have dispelled this myth by showing that many loan programs allow you to put down as little as 3% (or 0% with a VA loan).

If you have saved up your down payment and are ready to start your home search, one other piece of the puzzle is to make sure that you have saved enough for your closing costs.

Freddie Mac defines closing costs as:

“Closing costs, also called settlement fees, will need to be paid when you obtain a mortgage. These are fees charged by people representing your purchase, including your lender, real estate agent, and other third parties involved in the transaction. Closing costs are typically between 2 and 5% of your purchase price.”

We’ve recently heard from many first-time homebuyers that they wished that someone had let them know that closing costs could be so high. If you think about it, with a low down payment program, your closing costs could equal the amount that you saved for your down payment.

Here is a list of just some of the fees/costs that may be included in your closing costs, depending on where the home you wish to purchase is located:

  • Government recording costs
  • Appraisal fees
  • Credit report fees
  • Lender origination fees
  • Title services (insurance, search fees)
  • Tax service fees
  • Survey fees
  • Attorney fees
  • Underwriting fees

Is there any way to avoid paying closing costs?

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