First time homebuyers are a significant portion of today’s real estate market, representing nearly 40% of all transactions. In Virginia, there are special programs in place to help the first time homebuyer achieve their dreams.
Many of today’s buyers are Millennials (18-34). It is estimated that 50% of the Millennials will ask a family member for help with a down payment. The remaining 50% will use their own savings and resources to purchase a home.
Here are my recommendations to all first time homebuyers:
First, speak to a mortgage lender to obtain pre-approval on a loan amount. This way the first time homebuyer will know exactly what he or she can afford. A knowledgeable lender can assist a buyer with cleaning up their credit or establishing credit, common hurdles with first time buyers. I even recommend that buyers speak to more then one lender. Do NOT let the loan officer pull your credit until you’ve definitely decided to work with him or her.
Home Inspection: Request a copy of this document upon completion of inspection. The buyer pays for the inspection and so has a right to a full review of issues with the property.
Drive around neighborhoods where you are interested in buying. Spend some time in the neighborhood where you intend to buy at different hours of the day and night. How far is it from work? How close is it to family, church, schools, shopping? Examining these facets of home ownership will help determine the most desirable location.
Carefully consider the type of home purchased. Many young professionals prefer a townhouse or condominium to a single family dwelling because yard work is included in HOA fees. Townhome and condominium communities also offer additional amenities, such as outdoor or indoor pools, fitness and community rooms. Some first time homebuyers will need a yard, and some may even have skills to work on and maintain a home, so they will search for single family dwellings in their price range. Think these issues through carefully before beginning a search for a home for sale.
Remember, real estate taxes and homeowners insurance are added into the monthly costs of a loan. When applicable, homeowner association fees are also added to monthly costs.
Virginia's First Time Homebuyer Programs, 2014
FHSPs (First Time Homebuyer Savings Plans) can be utilized by homebuyers themselves to save for a home or members of their family (or even close friends) may set up an FHSP to contribute to a down payment on a home. Money deposited into these special accounts is sheltered from Commonwealth of Virginia taxes, so long as it is used to purchase a home. The maximum amount that can be deposited into a FHSP account is $50,000. Learn more, visit: http://www.varealtor.com/fhsp/.
VHDA first time homebuyer down payment assistance programs is an excellent way to obtain much needed funds when purchasing a home. The buyer must be income qualified to receive these loans – however income limits are set at modest amounts. This organization offers first time homebuyers classes, lender assistance and other tools, in addition to funding for down payment assistance. Visit:
First time homebuyers interested in beginning the process of buying a home should feel free to ask questions. No questions are too dumb! I have plenty of experience helping the first time homebuyer purchase and close on a home. For more information on purchasing real estate for sale in Virginia, call 757-288-4685 or email: firstname.lastname@example.org.