Downpayments and Northern Virginia Real Estate

If you're ready to purchase a home in Northern Virginia this year, you've likely begun saving for a downpayment. You may have even gone so far as to research other options, like lines of credit, as a means of a downpayment. There are other options and a variety of factors that go into the money down, so don't exhaust yourself! Here's a look at the factors that your mortgage lender will consider for your Northern Virginia real estate purchase:

The Money Down

A downpayment is standard in most every Northern Virginia home purchase, unless you're purchasing with cash. There's no way around it— in fact, few loan programs will actually allow you to buy a home in Arlington, Alexandria, Falls Church, DC without any money down. When putting money down for a home, anywhere from 5 to 20 percent is typical, but of course that varies by your loan type. "Conventional and FHA loans typically require minimum down payments of 5 percent and 3.5 percent, respectively," said AOL Real Estate. "On a $200,000 mortgage, that's $10,000 for conventional and $7,000 down for FHA. But [homebuyers] often put even more skin in the game."

Reserve Money

Do you have a set of reserve funds for a rainy day, or rather a later mortgage payment? Lenders will want to see that you are able to continue paying your mortgage beyond the first payment and one way they can do this is by requiring a certain amount of reserve funds. It does vary by lender and mortgage loan type, but commonly lenders will require at least one month of reserves that is similar to the monthly payment on a new Northern Virginia home, including the property taxes and insurance.

Your Own Money

Tax time is now over! And one thing Northern Virginia lenders will look at is your own income, determined by tax returns. They will examine your residual income, or the income you have left over after you've paid your major monthly expenses. In addition, "lenders will take a close look at the ratio of your major monthly debts against your gross monthly income," reported AOL Real Estate. "This is known as debt-to-income (DTI) ratio, and different loan programs have different requirements."

I happily serve the areas of Alexandria, Annandale, Arlington, Burke, Centreville, Chantilly, Clifton, Fairfax City, Falls Church, Great Falls, Herndon, Lake Ridge, McLean, Mount Vernon, Reston, Rosslyn, Springfield, Tyson’s Corner and Vienna.

Earle Whitmore

Long & Foster Real Estate, Inc.
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