First Time Home Buyers Q&A

IS NOW A GOOD TIME TO BUY A HOUSE?

If your finances are strong and you’re planning to live in Hampton Roads long term, now can still be a wise move, but do not buy unless the numbers work for you and/or your family. Right now we are seeing more inventory with modest price growth coupled with lower competition and more negotiation power.

HOW MUCH HOUSE CAN I AFFORD ON MY INCOME?

In order to answer this question I would advise speaking to a lender/mortgage broker. However, there are some general rule of thumbs for context. Generally whatever your yearly income is, you should be able to afford a home anywhere from 3-5x of your annual income.

ARE THERE ANY FIRST TIME HOME BUYER PROGRAMS IN VIRGINIA?

Yes, Virginia offers a multitude of first time home buyer programs to assist with tax credits, down payments, closing costs, etc. I would advise you speak with your lender/mortgage broker more about these government programs to see if you qualify.

WHAT ARE THE PROS AND CONS OF A VA LOAN?

PROS:

  • No down payment required.

  • No premium mortgage insurance (PMI) required. This can save hundred of dollars on your monthly mortgage bill.

  • Lower interest rates. VA interest rates are normally .25% to .75% lower than conventional interest rates.

  • Credit score requirements are flexible.

  • Buyer protections with limits on closing costs and easier refinancing later.

  • You can use your VA loan more than once for multiple properties.

CONS:

  • VA Funding fee is generally 2 - 3% of your loan amount.

  • Stricter appraisal guidelines.

  • You can only use if you intend to live in the home and not for second homes or investments (initially).

  • Your VA entitlement plus your income can limit your buying power especially if you have used your VA loan in the past.

SHOULD I BUY NOW OR WAIT?

If you are in a strong financial position and your goals and living situation allow for you to live in the home for appx. 5 plus years then you should buy now. You should wait if you are unsure of your job or considering possible out of the area relocation, you’re financially hampered, or you are expecting your financial position to improve soon.


WHAT CREDIT SCORE DO I NEED TO BUY A HOUSE?

You do not need a perfect credit score in order to buy. However, the better your credit score is the better loan options you will have. Consult with your lender/mortgage broker in order to determine your personal financial situation.


HOW LONG DOES IT TAKE TO BUY A HOME?

Once you have a home under contract the process is generally 30 - 60 days long. If you aggressively started looking for homes today, a realistic expectation is 1 - 2 weeks for lender approval and house shopping with another 30 to 45 days to get your home offer under contract and to the closing table.