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Avery Hess, REALTORS© Home

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April
4

Buying your first house is a major stepping stone in your life. Here's what you need to make your home buying dream come true.

There's nothing like the feeling of walking into your own home for the first time after closing the deal, but there are many steps to take care of between now and the big day. If you're buying a home for the first time, it's important to be prepared before you start shopping for D.C. homes for sale and making offers. Our real estate agents have the key details on what you'll need to buy your first home.

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September
8

First Home TipsBuying a house can always be an intimidating process, but buying your first house is truly nerve-wracking. But it's also fun and exciting, and our REALTORS® are here to get you through the hard parts so you can enjoy becoming a homeowner for the first time. Here's how you can get ready to buy your first home. 

  1. Save for That Down Payment
    The more you are able to save up for a down payment, the more likely you are to secure a mortgage with a good interest rate. For most homebuyers, the magic number for a down payment is 20% of the home's cost, but there are other options. Programs are available for first-time homebuyers to put down as little as 5%, but it's still in your best interest to start saving early and save as much as you can to put down a significant down payment. 
  2. Keep an Eye on Your Credit
    A credit score is just one factor that lenders will look at while deciding whether to offer you a mortgage, but it's a significant one. Credit score can impact whether you're approved for a home loan, and will likely affect the terms and interest rate. Obtain a copy of your credit report, dispute any errors, and take any steps you can to improve your credit. These include:
  • Pay off your debts
  • Make monthly credit card payments on time
  • Pay more than the monthly minimum on credit card bills
  • Avoid opening new lines of credit
  • Don't close inactive accounts
  1. Figure Out How Much House You Can Afford
    Before you even start looking at houses, you need to know your price range. Take a hard look at your budget, and remember to make room for other things. As a general rule, your total monthly housing cost (including HOA fees, taxes, insurance, and so on) should be no more than 25% of your take-home pay. 
  2. Get Pre-Approved for a Loan
    Once you've saved for your down payment and figured out a ballpark idea of your budget, you can start shopping around for a mortgage. But it's important to get pre-approved first and to do so before you really start looking at homes. Your pre-approval letter will give you a more concrete idea of what a lender will be willing to offer, and also shows sellers that you're serious about buying. The pre-approval process involves having a lender verify your financial information; you will need to supply documentation as proof of income, taxes, etc. 
  3. Remember to Budget for Closing Costs
    Closing costs often fall to the buyer, and it's easy to forget about these in your financial planning. What makes up these costs varies from house to house, but they typically include an appraisal, home inspection, credit report, attorney fees, and homeowner's insurance. Closing costs usually add up to between 3% and 5% of the home's total cost.

Our team has years of experience connecting first-time homebuyers with D.C. homes for sale, and we're committed to helping you through the entire process. Contact us today to learn more about finding your dream home in Washington, D.C., and the surrounding areas. 

February
3

2020 VA Loan Guide

One of the top benefits for service members, certain military spouses, and honorably discharged veterans is the VA home loan program. A VA home loan makes it possible for eligible individuals to buy a home with no downpayment; the terms of VA loans are favorable and help keep homeownership affordable for service members and veterans.

However, some changes are coming to the VA loan program in 2020, thanks to the passage of the Blue Water Navy Vietnam Veterans Act. Before you start browsing Alexandria homes for sale, take a few moments to understand the changes coming to the VA loan program and how they'll impact your ability to buy a home.

Loan Limits are Removed 

The Blue Water Navy Vietnam Veterans Act expands the availability of disability benefits to include more Vietnam War veterans exposed to Agent Orange during the Vietnam War. While this part of the bill doesn't seem like it would impact homeowners, it's the driving force behind one of the most important changes to the VA loan program: the removal of VA loan limits.

As of December 2019, VA loans are capped at $484,350 in most areas. After January 1, 2020, this limit will be eliminated. This will make it easier for veterans and service members to purchase more expensive homes or purchase property in cities with a high cost of living. It's still possible for your lender to deny a large home loan, and you'll need to satisfy the lender's criteria, but loan denial for larger mortgages won't be due to VA loan limits. Our real estate agents can help you find a home that works for your family and adheres to your homebuying budget. 

Allowing veterans and service members to take out larger mortgages makes it possible for the VA to raise more money from fees related to VA home loans to pay for the expansion in disability benefits.

The Funding Fee for a VA Loan is Going Up

Currently, veterans and service members must pay a one-time funding fee for their mortgage that's equal to 2.15 percent of the loan amount for first-time loan users and 3.3 percent for individuals taking out a subsequent VA loan. These funding fees will be increasing in 2020. The funding fee for first-time VA loan users is increasing to 2.3 percent, and the funding fee for taking out subsequent VA loans will be 3.6 percent.

The VA loan program also permits borrowers to roll the cost of this fee into their mortgage.

Take a moment to understand how these increases will impact your loan fees. Assume you're a first-time borrower taking out a VA loan for $300,000. When paying a 2.15 percent loan fee, this results in a funding fee of $6,450. Once the fee increases to 2.3 percent, your funding fee will increase to $6,900. 

If you're on your subsequent VA loan, the funding fee currently results in a fee of $9,900. After the fee increases to 3.6 percent, your fee will be $10,800. As you can see, the increase in fee percentages raises the funding fees by less than $1,000 in both of these scenarios.

Ready to take advantage of the removal of VA loan limits? Contact us today to start searching for your new home. 

September
18

Home Inspection Next Steps

You are one step closer to owning a home once the home inspection report is in hand. This vital document is filled with a summary of details attesting to the condition of the property. Our REALTORS® can help you examine the report and determine what steps are required to make a deal come together.

Know When to Walk Away

As the Kenny Rogers song goes, sometimes you need to know when to walk away...and when to run. When a home inspection report indicates major problems with the foundation, pollution on the property, a severely damaged roof, it is advisable to walk away. These problems are expensive and difficult to remediate. It is often not to your advantage to try and tackle them. There are exceptions, but as a general rule, it is best to walk away from a property with extensive deficiencies. 

Negotiate Repairs

Almost every home inspection report will come back with at least a few minor deficiencies. When the report indicates minor problems, it is usually something that can be negotiated with the seller. Your first option is to request the seller fix these problems as part of the deal. You will want to start your list of things you want fixed beginning with the most important items. However, you should be aware that most sellers won't want to go through the hassle of hiring contractors to perform repairs.

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