First Time Home Buyer Guide
Are You Ready For Home Ownership?
Owning a home—it sounds amazing, doesn't it? However, in order for buying a home to be the happy and satisfying experience it was meant to be, you need to ensure that you are financially and mentally prepared for the responsibilities that come with it.
Some first-time homebuyers have a notion that homeownership is like renting, but with the power to have pets and paint the walls whatever color you like. With great power comes great responsibility, though; unlike renters, homeowners take on a mortgage, property taxes, and home maintenance. Preparing for homeownership requires you to take critical stock of your finances and your expectations.
Questions For Prospective Homeowners
Are You Ready to Buy?
Owning your own home is about more than just being able to decorate any way you like; it's about being prepared to maintain your home over the years, realizing that a significant part of your income and time will go towards the mortgage, repairs, and maintenance. It's about being willing to take the risks of homeownership with a realistic expectation of the rewards.
How Much Can You Afford?
One of the first steps of your home buying process should be talking to your preferred lender and getting a preapproval letter. Your lender will verify your financial documents and tell you how much money you'll be approved to borrow, so you can get a better idea of which homes are within your price range.
It can be discouraging to find that your salary won't stretch as far as the home you want to own. However, sacrificing a huge part of your income just to pay the mortgage can very quickly make homeownership a burden rather than a point of pride. It's better to buy a modest home now and look at purchasing your "dream home" in a few years.
What is Your Debt-to-Income Ratio?
This is something that lenders take very seriously, and it ties in very closely to how much home you can afford to buy. The general rule is that your overall debt should not be more than 40% of your income, and your housing debt should not be more than 32%.
What 32% of your income will buy depends on where you want to live. In areas further away from the city, you can buy a large residence and ample acreage more affordably. In highly sought-after areas, such as Alexandria, Arlington, Reston, or Tyson's Corner, for example, you typically trade size for the benefits of proximity.
What Do You Want Out of a Home?
Do you hate the idea of cleaning your own gutters? Do you shudder at the thought of lawn care? Would you rather just pay a fee every month and have everything done for you? If so, you'll probably want to focus your search on home types where these are part of the package, such as condo associations. However, these typically come with their own considerations and tradeoffs. For example, would having to obey rules about when you can have your garbage cans out bother you, or do you want to live in a neighborhood where everything is 'just so' and don't mind the extra regulations?
The answers to these kinds of questions can help you narrow down the search for the right type of property for you.
Tips That First-Time Homebuyers May Not Know
The 20% Down Payment Rule? It Has Exceptions
This is a good rule to follow when you can, but there are plenty of home loans that let you put down less for a down payment.
- An FHA loan can have a down payment of as little as 3.5%.
- Freddie Mac and Fannie Mae have programs to back conventional loans for as little as 3% down.
- Are you a veteran or active service member? A VA loan has a 0% down payment.
- Homebuyers looking in rural areas may qualify for a 0% down USDA loan.
Check For Applicable State and Federal Programs
First-time homebuyers might be surprised at just how many programs are out there to help them save money! Here are just a few:
- The Energy Efficient Mortgage program provides benefits to homebuyers looking to make energy efficiency improvements.
- Looking at a fixer-upper? Check out the CHOICERenovation, FHA 203(k), and HomeStyle loans—all federally backed.
- Virginia has a lot of state programs to help homebuyers! Some VDHA programs are even available exclusively to first-time homebuyers, such as the Down Payment Assistance Grant, Closing Cost Assistance Grant, and Mortgage Credit Certificate.
Keep Some Cash in Reserve
One of the "hidden" costs that can trip up first-time homebuyers is closing costs. Closing costs typically run between 3% to 6% of the cost of your house, paid to your lender in exchange for loan services, and they cover things like appraisals and home title searches. In the excitement of finally getting a dream home, some costs like moving costs may also slip a buyer's mind.
In addition to these, it's a good idea to keep some cash in your account for the comfort of financial stability while you make the transition to your new home.
You Don't Have to Do Everything Yourself—That's What We're Here For
It's perfectly okay to not know everything there is to know about homebuying before you start your home search. That's what we're here for—the trusted, reliable, knowledgable real estate experts you've sought out to act on your behalf. We're happy to answer any questions you may have during the homebuying process, and we're with you every step of the way until the key to your new home is in your hand.
Get to Know the Area You Plan to Live In
Once you know what you want, it's time to decide where you want it. Alexandria and Northern Virginia have a lot of great communities to choose from, and as locals, we're happy to tell you about them. Check out the community pages below, and feel free to shoot us a message to ask questions or get more in-depth information!
Browse Northern Virginia Cities/Counties
Area Military Bases
Your At Home Team Is Here to Help
You need a good agent, like David and Sallie, who will work hard for you. Your At Home Team is dedicated to helping you find the right home, at the best price. We want you to find the home that will make you happy and successful in real estate ownership.
When you hire us to help you buy your first home, the first step is to know what type of property you want and how much you can afford. Then we'll find a way to merge these two priorities and find a home that you'll enjoy owning.
Keep your objectives in mind when visiting a home. Sometimes the idea of owning a home can overwhelm your practical sense, so keep your feelings in check. Keep a list handy of the features that you need and want in a home, and judge each home by the list instead of by details that could distract you from your goal. When you're alone with your agent, you can go over the pros and cons of each home. We can help you stay on track while still keeping our eyes out for a great property.
Make the offer. This can be a maze of "buyer," "seller," "subsidy," "deposit," and "completion." Our job as your REALTOR® is to represent you and make certain your offer is the best it can possibly be.
Get all necessary inspections done. A home inspector will check for signs of harmful materials like asbestos, lead paint, and mold. They'll also check for evidence of pests, faulty wiring, and leaks. This is a crucial part of the home purchase. Not getting an inspection done means that you could be stuck in a home with a bad case of black mold and no recourse other than to pay for its removal. Inspections will cost several hundred dollars, but again, this is more than worth it in the end....you are making a huge investment and you want to make an educated decision.
The final walk-through is done prior to settlement. This is the time you can validate the property is in the condition as stated in your contract.
From the first interview that determines your requirements to the moment that you receive the keys, David and Sallie help you with the complicated process of buying a home. Don't hesitate to contact us to find out more about how we can make the home buying process easier!
Your At Home Team
With David and Sallie behind you, the outcome is certain to be successful! Contact Your At Home Team for more information about first-time home purchasing and to begin looking for your new home now. To schedule an appointment or talk to us directly, call 703.286.1333 today!