Buying a home, whether it’s your first or your fifth comes with a lot of “I didn’t know that.”
Real estate is constantly changing and there are always going to be questions about choosing the right home to determine what loan is best for you. Lending is a big part of real estate and it’s also always changing. Below is what you’ll need to know about mortgages and how they relate to buying a home in Kingstowne.
What’s The First Step To Buying A Home In Kingstowne?
Kingstowne, like many other areas of Northern Virginia, and the United States for that matter is experiencing low inventory. When supply isn’t keeping up with demand competition comes into play and makes getting a pre-approval for a home loan more important than ever. It’s always important but, when inventory is low it’s a downright must. Being a pre-approved buyer not only signals to sellers you’re serious, it also gives them confidence you can actually buy their house. If you’re considering buying a home starting with getting pre-approved is your first step. Consult with your agent for recommendations and team up with a lender who you not only trust but, one that can close your loan promptly after you go under contract on a home.
How Much Can I Afford?
This is a question I get a lot and there are multiple factors that are considered in order to determine affordability. It’s not one I can answer as a real estate agent and always reaffirms why talking to a lender is the first step in home buying. Debt to income ratio, credit score, and credit utilization all factor into a pre-approval. Not all lenders are created equal and you need to work with one that reviews your credit and your finances, not only to determine how much you can afford but, also to determine if there is anything that needs improvement before you buy.
Are Interest Rates Rising?
Yes, interest rates have risen this year but, buyers are still buying because historically rates are still low. Buying now means locking in an interest rate that is very likely lower than it will be in the future. If rates keep rising (they’re predicted to do so) and you wait to buy it will impact your overall buying power. According to NerdWallet’s 2018 Home Buyer Report millennials make up the largest share of current first time home buyers and 82% state buying a home is a priority.
This is another question I get a lot and while perfect credit can be a subjective term we always tell our clients you certainly don’t need an 800 credit score to buy a home. In general, the minimum score lenders look for is a 620. There are some that can and will go lower than that. An average credit score is in the mid 600’s. If your credit score is 740+ you’re considered to have an extremely strong credit score. When obtaining a mortgage the higher your credit score the better your rate will be but, that’s not to say you can’t get a mortgage without perfect credit, you absolutely can.
Do I Need To Put 20% Down?
It’s a common misconception that you need to put 20% down to purchase a home. It’s absolutely a myth that you need to put 20% down, right now the average in the nation is 10% down. There are programs that offer 3% and 5% down as well. There are cases where if for example, you’re in a multiple offer situation where 20% down could make your offer stand out more but, that’s going to be case by case and shouldn’t deter you from wanting to buy. There are plenty of ways to make your offer stand out if you have competition that doesn’t include a higher down payment.
How Long Does It Take For A Loan To Close?
The closing timeframe will vary by lenders and even states. In the Kingstowne area, average closing time is 30 days. We work with a handful of preferred lenders and all can close in as quickly as 2 weeks if needed. This can set our buyers apart if they’re in a competing situation. That said, often times if a home is still occupied the sellers need a few weeks to move out. Working with a loan officer that gives you the flexibility to close on the seller’s timeframe is important in the current market conditions because sellers are in the driver’s seat. In the Kingstowne area, it’s not advisable to work with a lender that needs more than 30 days to close your loan.
Are you looking for help with your Kingstowne real estate needs? Contact me at 703-431-3755 or [email protected]. Whether its questions about buying a home or looking for a recommendation for a local lender I’m always glad to assist.