Refinancing Your Northern Virginia Home Mortgage

You've most likely heard, and even more likely noticed yourself, that mortgage rates are rising and fast. In past months, the interest rates were actually at historic lows while the housing recovery began to make its way back to normal levels. And now, if you've been contemplating the task, it may be the time for you to refinance your Northern Virginia home mortgage. According to real estate experts, refinancing is not as daunting as it may sound:

Consider Your Old Mortgage
The first thing you should do in this process is consider your old mortgage. Gather your latest mortgage statement to find your current rate, assess your annual property tax, know your credit score, and finally, find the costs of your insurance premiums.

Crunch the Numbers
Now is the time to play with a mortgage calculator or crunch the numbers yourself to estimate your new principle and interest rate. Consider how much to borrow and the length and terms of the loan, then compare the savings.

Ask Around
Chances are your NOVA real estate agent or friends and family have the names of trusted mortgage lends to recommend. Rates and estimates can always be found online, but quality service and attention cannot. Use your real estate sources and find the best fit for you.

Don't Apply Just Yet
A formal application lets your lender pull your credit score and when shopping around, pulling too many can actually hurt your score. Depending on your score, that can make a big difference.

Prepare, Gather, Decide
Shop around for the best rates, your preferred lender, gather all of the necessary documents, and then make a decision for the best possible scenario. When all of these have been decided, you are ready to apply for your new NOVA home mortgage. After it's all set, be prepared for surprises, delays, and roadblocks.

Earle Whitmore

Long & Foster Real Estate, Inc.
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More on Mortgage Payments for NOVA Homebuyers in 2013

The down payment presents the biggest obstacle to homeownership for most buyers, especially first-time buyers and those in lower income brackets. Fortunately for those people, lenders have become more willing to underwrite mortgages with small down payments.  If you need some help finding a good lender I can give you some great people in the NOVA market.

Most mortgage lenders require a cash down payment between 10 to 20% of the sale price. Some lenders have zero-down mortgage programs. If you can put down more than your lender requires, say 25 to 30%, your lender may be willing to overlook credit blemishes, approve your loan without verifying your income or both. If you come up short on the down payment, with less than 20% of the buying price, before your loan is approved you may have to obtain private mortgage insurance, or PMI, to protect the lender.  You can often lower your mortgage payment or afford a more expensive house by putting more money down.

The Lowdown on Down Payments:

If you make $40,000 a year your monthly mortgage payment (28% of gross income) would be $933. Your total monthly debt should be no more than 36% of your gross income; so in this senario: $1,200. The bigger the down payment, the more expensive the house you can buy.  So, let's say your monthly mortgage payment of $933 has an interest rate of 7.5%. In a 30-year fixed-rate mortgage, that monthly payment covers a total principal of $133,435.45. With 10% down, that mortgage would cover a house worth $148,262. With 20% down, the house price would be $166,794.

If you need more information or help determining how much you can afford, please don't hesitate to contact me with any questions.  I am here to help!

Earle Whitmore
Long & Foster Real Estate, Inc.
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Reference: www.bankrate.com

Finding Your Home in Fairfax Country in 2013

With many choices and options when buying a home in Fairfax Country how do you settle or make a choice?  The biggest and most important thing to consider is price. Always start with a price range!

Mortgage lenders are concerned with your ability to repay the mortgage especially in today’s economy. To determine if you qualify for a loan, they will consider your credit history, your monthly gross income and how much cash you have for a down payment. Start saving!  Have around 20 to 30 percent of the home’s cost to have for a down payment.

The standard debt-to-income ratios are the housing expense ratio or front-end, ratio shows how much of your gross monthly income would go toward the mortgage payment. Your monthly mortgage payment, including principal, interest, real estate taxes and homeowners insurance, should not exceed 28 percent of your gross monthly income. To calculate your housing expense ratio, multiply your annual salary by 0.28, then divide by 12 (months). The answer is your maximum housing expense ratio.

The back-end ratio is the total debt-to-income, that shows how much of your gross income would go toward all of your debt obligations, including mortgage, car loans, child support and alimony, credit card bills, student loans and condominium fees. Your total monthly debt obligation should not exceed 36 percent of your gross income. To calculate your debt-to-income ratio, multiply your annual salary by 0.36, then divide by 12 (months). The answer is your maximum allowable debt-to-income ratio.

When looking at Conventional loans your housing costs should be 26 to 28 percent of monthly gross income. FHA loans housing costs would be 29 percent of monthly gross income. 

In addition, lenders include the cost of taxes and insurance when calculating how much house you can afford.  Property taxes are part of your monthly mortgage payment, it is important to get an estimate of what yours would be.  Ask your real estate agent for the rates that apply in the area you want to buy. You must insure your property to obtain a mortgage monthly payment. Be sure to inquire about special requirements for hazard insurance, such as mandatory coverage for floods, earthquakes or wind. If you put down less than 20 percent of your home's value, you also will have to obtain mortgage insurance or take out a second loan, called a piggyback loan, to bring the first mortgage down to 80 percent of the purchase price. Both alternatives will raise your monthly payment.

If you need more information or help determining how much you can afford, please don't hesitate to contact me with any questions.  I am here to help!

Earle Whitmore
Long & Foster Real Estate, Inc.
Visit Our Website
View Northern Virginia Homes for Sale
Become Our Facebook Fan
Follow Us On Twitter
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Contact Us