Facts and Tips First Time Woodbridge, Virgina Home Buyers Need to Know
It is exciting to think you are ready to buy a home!
This week I had a buyer who relocated here and was getting a little frustrated because it was hard to figure out which homes had a monthly fee on top of the mortgage and taxes and which ones did not.
If you have been pre-approved by a lender for a mortgage amount of let's say $200,000 for this example.
Not all homes you see online will be available to you even though they are priced $200,000 or less!
Why?
Well that is because in Woodbridge, Virginia like many areas in Northern Virginia we may have a condo fee attached to the townhomes in this price range.
If you are approved for $200,000 and the townhome community you like online has a condo fee for let's say $127.00 a month which includes common area maintenance, and trash here is what you can expect the payment to be...
If you use an online mortgage calculator such as Bank Rate and put in $200,000 this is what it would say your payment will be 940.00 ....Oh, you say to yourself I can do that!!
Not so fast!!
This mortgage calculator does not show or monthly taxes and homeowners insurance.
You are thinking well what will that cost?
Be prepared for a couple hundred more dollars a month.
Next we must know what type of mortgage you will use to buy the home. Conventional, FHA, VA, USDA, VHDA, NAVY Fed 100% Loan. Each one of these will change the monthly payment on a 200,000 home price!
Let's for this Blog Post assume you are using an FHA loan and you will put down the minimum down payment of 3.5% see what the payment really will be at the same 3.875% Interest rate above at $200,000.
Notice the bottom line payment will be almost $350.00 a month more than the first mortgage calculator! That makes a difference and this is if it is a true townhome with no extra fee.
Now let's see what happens to that payment if it is a townhome condo and has a fee of $127.00 a month which includes master insurance policy, common area maintenance and trash. Yes, now the payment is $477.00 more than the first online calculator!
Yes, as you choke!!
Now the payment is $477.00 more than the first online calculator!
Here is a rule of thumb to keep in mind when looking at a home with a condo fee. For every $100.00 in condo fee, it lowers your buying power by $20,000 at today's interest rates of 4%
(This formula works the same if you are looking at higher priced homes as well!)
So in this example above if you qualify for a max loan amount of $200,000 and you want to buy a condo with a 127.00 condo fee you need to keep that sales price below $174,000 or less in order to qualify for this home!
Now let's flip this my relocating buyer they decided against townhomes that had a condo fee and they focused on only what we call FEE Simple homes meaning a townhome with no condo fee. They were able to buy a home right up to the max $200,000 loan approval with no concerns
If you or someone you know is thinking about buying a home please give me a call and I would be happy to coach you on your options. I am not a loan officer I am a Buyer Agent helping people to be successful finding the home of their dreams and helping them to get prepared to buy a home. Knowing what your budget is and the type of loan you will be using is where you must start. Without this information, you will be shopping without your wallet and could fall in love with something that you cannot afford.
The most important first step is to get pre-approval with a Local Lender you can sit down and talk with face to face. Have them pull your credit and discuss your loan options. They will help you to understand the requirements of each type of loan and what will work for your personal situatio
TIPS from Pat
1. It is never to early to start getting prepared.
2 Make sure you are and have been paying your bills on time for the past year.
3. Do not change jobs now or in the near future unless it is the same field and for more money.
4. Decide do you want a Condo, Townhome or Detached Home
5. Do not house hunt until you have sat down with a local lender. As you see from my examples above you could easy be misinformed. Online calculators and even on the line pre-approvals do not look at your full financial picture. I have met with far too many buyers who thought they were good to go when in fact they were anything but ready.
You have heard the saying "It's not what you know but who you know." now you know me Patty Blackwelder and I am just a phone call away.
Call or Text Me at 703-801-9367 and Let's Talk
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