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Feb 28

Determining Your Down Payment for First-Time Homebuyers

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One of the most important factors for securing your mortgage loan is the down payment. This upfront payment on a home is separate from your monthly mortgage payments. Planning a realistic down payment is important to getting the type of mortgage loan that you want. Because of this, saving the desired sum is important and requires considered financial awareness. Basically, the higher your down payment, the lower your monthly payments, because it is the remaining amount owed divided over the term of your mortgage.

Before you determine how you will make a down payment, it’s important to understand the requirements that certain types of loans will have, as many will require you to pay 3%-5% of the total cost of the home. An FHA loan requires a minimum down payment of 3.5% and is what many first-time homebuyers will end up using. All FHA loans also require home buyers to purchase MI, or mortgage insurance. With a 20% down payment, home buyers can use Conventional financing will not be required to purchase mortgage insurance. A higher down payment will give the buyers more options when it comes to shopping for a mortgage and ultimately with the house they buy.

The down payment is one of approximately 4 factors that will determine if a buyer is pre-approved and ultimately approved for a loan: down payment, credit history, employment and income, and bank statement history. A down payment does not actually have to be available to the buyer at the time an offer is made, so long as the full sum is available at the time of the closing.

The more you put down the lower your monthly mortgage payment will be. USDA and VA mortgage loans are government-backed and do not require a down payment which may be attractive to some customers who have difficulty saving a large sum. Homebuyers with lower credit scores may benefit from providing a larger down payment.

Here are four steps to determining how much money to put down:

1. Plan ahead
Because mortgage loan approval will involve the home buyer’s credit score, income and employment history, and bank history, it is important to evaluate these factors before beginning home buying process. Because the down payment will be provided up front, a large down payment can increase the likelihood of getting the loan that you want if you have a low credit score. However, if you have excellent credit history and income, providing a larger down payment may not be necessary unless you would like to avoid the requirement of purchasing mortgage insurance.

2. Determine what you can pay from savings
After evaluating your credit score and income history, you should determine how much you can provide as a down payment. Savings are important, so be reasonable and realistic about what you can provide. Remember that FHA loans require at least 3.5% down, and when speaking to a mortgage lender, they may provide you with their own, additional requirements. Keeping these
factors in mind will help you determine your home buying budget—but remember, lending is a conversation, and you should feel comfortable working through different scenarios with your mortgage professional.

3. Set a goal for your mortgage terms
It is important to set goals when shopping for a mortgage and one of the most important is your interest rate. If you are seeking a lower interest rate, you may want to provide a higher down payment. Not only will this offset the costs that you will be paying each month because the remaining balance on the loan will be reduced, but it will be a positive factor in evaluating your readiness to repay the loan to the lender. Remember that after a down payment, the remaining balance on the loan will be divided by the loan term, and this will be your monthly payment with interest. Figuring out these numbers with a mortgage lender will allow you to realistically evaluate what you can pay each month, and having that goal in mind will help you take the steps to get there.

4. Meet with a mortgage lender
After setting goals and determining what type of mortgage loan you would like, it is time to visit a loan professional and get a rate quote. Many local mortgage agents are happy to go back to the drawing board and help you to determine your best options for obtaining your ideal interest rate and loan terms. Remember to be open and honest with your mortgage lender, and that a local lender will be able to give you the most time and attention, opposed to large, national lenders or over-the-phone mortgage apps.

Determining your down payment is an important step in shopping for a mortgage. Remember to evaluate all of the factors that will determine your mortgage loan, set goals, and find a local mortgage lender that will work hard to realize your goals.

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Feb 9

Advantages of a Local Mortgage Lender

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Quick mortgages are advertised everywhere these days. Large quick approval mortgage lenders portray home buyers signing “instant” mortgages over their smartphone. Corporate structured mortgage lenders advertise that they care about individual success and financial security. Whatever the claim of these large companies, it’s nowhere near the reliability of a local mortgage lender. Here are four reasons why you should work with a local mortgage lender:

1. Have the opportunity to shop rates more closely
Having the availability of a mortgage lender in person will give you the opportunity to view and discuss mortgage rates and loan types more closely. Insider knowledge will allow you to see the variables that are affecting your rates and will help you to understand which mortgage type may be best for you. You won’t be able to get that sort of conversational feedback from an app or large financial institution.

2. Face to face contact unavailable from a website or app
Local mortgage lenders are usually small, personal businesses that value relationship building. Many rely on setting appointments, standing by for phone calls, and giving quick replies to questions. Don’t deal with the contact structures of corporate or online lenders who will reroute you through their customer service department. To them, you’re a number. Local lenders will give you their time and presence in order to ensure that you have a friendly experience.

3. Work with one person who understands your needs.
National banks are giving you scripted information. Their loan types are a part of a system that was built at a corporate office. Mobile apps and websites are even further detached and will allow no options for conversation, feedback, and re-evaluation. Meeting with a local lender will allow you to build a relationship that isn’t possible with online or large corporate lenders. Shop local to meet a real person who will evaluate and value your needs.

4. Local lenders will understand your local market.
Shopping for a mortgage locally will not only make it easier to find a reliable partner in the expenditure of buying a home but will also provide insights into your local real estate market. Real estate agents will commonly have relationships with local lenders and can point you in the direction of someone trustworthy. A local lender will understand your wants and needs better than a large lender or app because they will have worked in your area previously.

Local has meant better for a long time now. Local mortgage lenders are going to give you more time and appreciation, and in turn, you will return more value on your new home. Mortgages don’t need to be a hassle, and lenders don’t need to rush you in and out of their doors. Remember to shop locally when considering a mortgage.

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Feb 7

Goochland County Real Estate: 2016 Market Summary

Goochland Real Estate and Home Sales Statistics for 2016

2016 was another strong year for home sales in Goochland, Virginia with 317 homes sold. The average home sold in 2016 was 2,933 square feet and sold for $478k (an average of $163 per square foot). The average sale price was up 9% over 2015 home sale prices marking another strong year of growth in home values. The average listing price in 2016 was $483k with homes averaging 72 days on the market. The highest priced home sold in Goochland in 2016 was $2.7 million where the lowest sale price was $23,700.

Goochland is very diverse area offering everything from horse and livestock farm properties to luxury neighborhoods such as Holland Hills, Kinloch, and The Meadows at Joe Brooke Farm. Goochland homeowners are spoiled with the serenity of country life with convenient access to many amenities in neighboring Short Pump (West End of Henrico). Find your peaceful country getaway in Goochland Virginia.

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Feb 7

Powhatan County Real Estate: 2016 Market Summary

Powhatan Real Estate and Homes Sales Statistics for 2016

2016 was another great year for real estate activity in Powhatan County, Virginia. In total, there were 464 homes sold in Powhatan which was a slight increase over 2015. The average home sold in 2016 was 2,245 square feet and sold for $299k which comes to $133 per square foot (average for 2016). This average sale price was up 3% over 2015 Powhatan home sale prices, marking the third straight year home sale prices have increased. The average listing price in 2016 was $302k and averaged 55.7 days on the market. The highest sale price for a Powhatan home sold in 2016 was $1.2 million while the lowest priced home sold for $31,650.

Powhatan is a very diverse area offering many luxury neighborhoods such Aston, French Hill, and Founders Bridge. It is also a community known for expansive acreage available for horse, livestock and agriculture farms. While the area is considered rural, Powhatan homeowners still appreciated convenient access to local medical facilities, great restaurants, and multiple entertainment options. Find your next home in beautiful Powhatan Virginia.

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Jan 25

5 Steps to Getting Mortgage Ready in 2017

5 Steps to Getting Mortgage Ready in 2017 WMcPherson

 

New Year’s means new goals for many, and buying a house and beginning to gain equity may be one of them. January is a good time to buy, and many young families without school-age children can capitalize on the buyer’s market at this time of year. Here are some things you can focus on for getting a mortgage in 2017.

Check your credit score
Many first time home buyers will have newly established credit showing student loan repayment and beginners’ credit cards. Whether or not knowledgeable about credit scores, you should always check prior to and shopping for a mortgage. Given time and effort, your credit score may improve, and it will be highly effective getting a better mortgage rate and higher approval for a loan. In order to get a Federal Housing Administration (FHA) low down payment advantage of 3.5%, you must have a credit score of 620 or higher.

Determine your price range
Determining your price range will help you to find the right mortgage for you. Your down payment, monthly payment, interest rate, and loan term are all variables that can determine your price range. Having an overall house cost going in is a good idea, and other terms can be determined later, but remember to factor in real estate taxes, homeowners insurance, and any mortgage insurance to determine the overall cost of the home. This is also a good time to your research and home shopping method your areas of interests and their real estate history.

Shop for a mortgage lender
People are going online for services more and more now. Finding a mortgage lender with a reputable website and web presence will help you to find a match. Recently, “quick” loans have become popular as an alternative, but remember that these will incur different costs such as higher interest rates and higher down payments because those lenders are not really taking the time to learn who you are to evaluate your assets. This is why many home buyers prefer to work with a local, established mortgage lender. This is also a great time to determine which type of mortgage you will be shopping for. If you are having trouble finding a good mortgage lender, try going to a realtor first. They will inevitably know people in the business that they can recommend.

Start the pre-approval process
Getting pre-approved with a mortgage lender should be a comfortable process once you have determined the right lender. It will involve going over credit scores, assets, income, employment history, and other elements that will contribute to the pre-approval amount for purchasing a house, as well as the interest rate and term suggestions. Be open to working with the lender, they will be happy to calculate and recalculate new terms until you find an ideal match. Furthermore, ask about rate locks to determine if you can rely on a lender to “lock in” an interest rate before the final mortgage is calculated. Remember that this is not the finite meeting about a mortgage loan.

Get Shopping
Once you are pre-approved and have the confidence of knowing that you can purchase a home at your budget, you should feel eager to start the home buying process. Your realtor will be able to better determine your price range and understand the factors of your pre-approval. Realtors on both sides of the sale will be more open to negotiating to meet your pre-approved budget, as it leads to a quicker home sale and faster resolution for all parties. Remember that pre-approval is not the last meeting that you will have with your mortgage lender, and that there may be flexibility within your pre-approval determined by the cost of the home.

Buying a home may be the largest purchase that you ever make. Being aware of your credit score and income history will go a long way to finding a better mortgage. The New Year is a great time to determine how you can realize your goals of owning a home. Taking the time to meet with a mortgage lender at any point in the buying process will give you the confidence to move forward and to become a homeowner.

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