One of the biggest difficulties manyLynchburg, Campbell County or Bedford County first-time home buyers face is a lack of down payment and the necessary funds for closing costs.
However, even with the widespread availability of “no-money-down programs” evaporating in the credit crisis, one national no-down payment program still remains: USDA Rural Development home loans.
Guaranteed by the USDA (United States Department of Agriculture), this program might make you think that you have to buy farmland or live “in the country” to qualify, but this is often not the case. In fact, you might be surprised to see just how many neighborhoods actually do qualify as rural development areas. For this program, the term “rural” really applies to those areas with a lower population or fewer homes, not necessarily those areas and neighborhoods far outside of the city.
There are several benefits of the USDA loan program besides no money down. The program also does not require private mortgage insurance, and the seller is allowed to pay all of your closing costs and pre-paid items up to 6.00% of the total sales price of the property. And while this is great news for first-time home buyers, it’s important to note that you don’t have to be a first-timer to qualify for a USDA loan.
Other than the location of the property you’re seeking to buy, there is one other limitation to this valuable program that you must consider: your income. Luckily, however, these numbers have recently increased to allow more potential buyers to take advantage of this special program. For households in non-high cost areas, with up to four people, the income limit is $70,750. In households where 5-8 people reside, the income limitation is $93,400. These income limitations are guidelines and, in some cases, may be exceeded.
To find out more about USDA loans, give me a call. Let’s find out whether you qualify for this program.
The holidays are upon us and if you haven’t already, you will likely soon be hearing the song, “The 12 Days of Christmas”, or seeing any one of a number of “Top Ten Things You Need to Do in 2010″ lists. While you won’t find 12 things, or even 10 things here to think about when considering a mortgage or a home in Lynchburg, Campbell County or Bedford County Virginia, you will find several things you need to be aware of when seeking mortgage financing.
In fact, provided you were willing to accept the payment, you could even do so with little money or no “skin” in the game.
In much the same way you cannot get yesterday back, if you have a FICO score that needs, shall we say, improvement, you may be unable to get a mortgage today.
Depending on your lender, the amount of your down payment and the mortgage program you are applying for, the minimum standards for qualifying could be the lowest FICO score ofeitherborrower, with a minimum score of 680.
For those applying for a loan guaranteed by the FHA, lower scores could still get you in that home but standards have risen there as well and can vary by lender.
The best path to take before you sign a purchase contract or apply for financing could warrant having your credit profile checked out by your lender in advance.
During the boom, it was not uncommon for prospective home buyers in the Lynchburg, Campbell County and Bedford County area to discover they could qualify for a housing payment that, in conjunction with their other monthly debt, would consume a majority of their income.
Examples of this could have included total monthly obligations that could meet or exceed 60% of one’s monthly income. Obviously, this could and did create issues for people when the joy of owning a new home was quickly replaced by the sinking feeling that their mortgage payment was now causing extreme financial hardships.
In the month of December, many home lenders are pulling the maximum amount of monthly debt that someone can qualify for, including a housing payment, at 45% of monthly gross income. For many folks, this amount may still be too high based on other payments including child care, insurance or other routine payments not inclusive of normal qualifying debt.
While lenders may have a maximum amount you can allocate to housing, no one knows what you are comfortable paying more than you. To ensure you won’t get into trouble later, express to your mortgage professional what you are comfortable paying and use that number to back into the maximum house you can buy.
One way to help your cause is to ask for a little help, and this doesn’t necessarily mean hitting up mom and dad for some extra cash. Turn your request to the seller instead and you may find that not only will you get what you need but you might get a little more “juice” as well.
You should know that both qualified first time home buyers and move up buyers are eligible for a “gift” from Uncle Sam in the form of a tax credit.
You may be getting some money a few months after you close. But, did you know if the seller pays to lower your interest rate, which could help you either qualify or make it a little easier to make your payment each month, that you could be eligible for an additional tax deduction?
The IRS treats “points” or fees paid to lower your interest rate as an item which is deductible on your income taxes and it doesn’t matter who pays them. Let’s say that your seller agrees to pay two points toward lowering your interest rate, which could drop your rate by approximately half a point as an example.
If the amount paid is $4,000, or two points on a $200,000 loan, you will not only get a lower rate but potentially another $4,000 deduction on your income when you file your tax returns, potentially putting additional money in your pocket after you file.
The key here is to make sure when you are negotiating your purchase contract, you ask the seller for a concession for buying down your interest rate.
The concession can be either in the form of a dollar amount requested, a percentage of the sales price, or a percentage of the loan amount. Ask your mortgage professional for additional guidance as to the best path for you to follow.
While down payment requirements have increased for some programs, it is still possible to buy a home with less than five percent and also NO money down. Yes, you did read you can buy a home without a down payment.
The loan program that allows for you to qualify with as little as 3.5% down is one that is guaranteed by the FHA and the ones that allow for no down payment are those guaranteed by the VA and USDA.
Granted, there are restrictions with each of these programs that can include maximum loan amounts based on your location with FHA loans, income and property requirements for those offered by the USDA, and your qualifying status as an eligible Veteran.
However, the ability to purchase a home in the Lynchburg, Campbell County or Bedford County area with less than five percent down is still a possibility for millions of Americans.
Also, keep in mind that sellers may still offer concessions in the form of paying closing costs which can also decrease the amount of funds you may be required to have to purchase your next home in Bedford County or Campbell County or Lynhcburg MLS area.
Well rounded preparation will take the fear out of trying. This is how daredevils, extreme sports addict or adrenaline junkie have the courage to try something new.
Home buying in Campbell County, Bedford County and Lynchburg Va can be a risky sport.
For those who may have made an offer on a property, it may have been a foreclosure or a short sale and for some reason was not able to secure a ratified agreement, it could feel like defeat. Sheer fearlessness isn’t enough to become a home owner you need to know the rules.
Just squeaking by the home buying process isn’t enough to achieve victory. You have to keep your eye on the whole picture not only is buying the house your goal but also to keep a roof over your head.
A simple explanation what a REALTOR like me is all about and what home buying is about. This is pretty straightforward video and should explain what I do in simple terms, however if you have any further questions you can dig around here on this blog or my site and learn more about me and the home buying process in Lynchburg Va. You could also email me or send me a text message we well. I always enjoy talking to people about my passion which is real estate. I’m kind of like a help-a-holic. I really enjoy helping people.
Sometimes we have to jump through a lot of hoops to get to the settlement table. This is what makes using a professional buyers agent or sellers agent so important in this real estate market. As a professional we have a few tricks up our sleeve. When necessary we must use a little real estate voodoo to get a house sold.
When purchasing real estate in Lynchburg Va there is no truth in the cliché “Ignorance is bliss”
Here are Seven Good reasons not to stick your head in the sand.
Knowledge is bliss. You as a first time home buyer in Lynchburg Va don’t have to know it all but you must know what is important to reaching your particular goals Depending on the type of home you are looking for would depend on the type of knowledge you need to make an informed decision. In the beginning it is best to start at finding out what you don’t know about the particular home purchase and fill in the blanks. This will assure that you can make a confident buying decision
Specifics are bliss. Not all first time home buyers are the same. Consequently not all first time home buyers should seek the same home purchasing solution. Everyone has different needs. Generally the weakest link for a first time purchaser is a down payment. This may not be your particular case and to generalize and focus on that would necessarily help you meet your goals of home home ownership.
Not assuming is bliss. Assumptions cost money and waste time. Don’t assume anything. Ask questions and listen to the answers. To be conscientious and deliberate to get clarification could mean money in your pocket as a first time home buyer.
Courage is bliss. Fear can influence your decisions and you may make a decision in haste. Fear of missing out on a good deal can actually cause buyers to dive into buying which may not be in your best interest. Having the courage to say no this is not the house for me or the time for me to buy is just as important as knowing that this is the right time for you to buy. Working with me I will put your interests first & work on a strategy which ensures you have all the knowledge necessary to protect yourself and your family.
Impossibilities are bliss. It may take long to make the impossible happen but it can happen. Your dreams can come true. However you need a good strategy to get you there along with your dreams. If you are serious about owning your own water front property or mountain vacation home than lets sit down and chart a reverse-engineered long term strategy which is determined with the end in mind. It may take two or three real estate purchases to get you there with some strategic real estate investing but it will be worth the planning.
Plan B is bliss. When purchasing a home expect the unexpected. Worst case scenarios, contingency strategies and Plan B alternatives are good safe guards when diving into home ownership. Be proactive and think ahead. This approach could help you not get broad sided by an unanticipated repair or event and could allow you to take advantage of a great opportunity.
Cashflow is bliss. Cash may be king but cash flow means peace of mind. Over and beyond the purchase price of the home first time home buyers must remember that they need to also pay for the lawyer fees, title insurance or a survey and reimbursement of property tax to sellers who have paid for the year in full and the long list of other closing costs. I’ll help you with the details of possible expenses. We will also talk about affordability of owning. Over the first year there may be unexpected expenses. Let’s talk about a projected ownership budget as well as purchasing costs. Beware of getting into the house rich cash poor category.
