What Does a Home Truly Cost in Northern Virginia?

Today we are excited to talk about both the perceptions, and
realities, of homeownership in Northern Virginia. The National
Association of Realtors recently released a report saying Americans
at every age and income level agree that homeownership is both a
smart financial decision, and part of the American dream. We’ve
talked about some obstacles to homeownership in the past, but as
studies like this have shown, many obstacles are perceived. They
aren’t real. A recent study by Fannie Mae revealed that many
consumers are either unsure or misinformed regarding the minimum
requirements to obtain a mortgage. We are going to break down three
such challenges today. Down payment perceptionsMany renters have
mentioned that the lack of an adequate down payment is the thing
that most prevents them from buying. According to the Fannie Mae
report mentioned above, 40% of all renters don’t know what kind of
down payment is required, while 15% think you need at least 20%
down and 4% believe at least 10% down is required. The reality is,
there are tons of programs out there from Fannie Mae, Freddie Mac,
and FHA that offer 3% down programs. VA and USDA loans offer 0%
down programs. The average down payment for a first-time buyer is
6%. “The average credit score for FHA loans is 687.” Credit score
perceptionsMany renters have also mentioned that the lack of a good
credit score is the thing preventing them from buying. According to
the same Fannie Mae report, 54% of all renters don’t know what
credit score is required, and 5% think you need at least a score of
740. Actually, many mortgages are granted to purchasers with a
score below 700. The average credit score for FHA loans is 687, and
the average score on all loans is 722. Debt-to-income ratio
perceptionsMany renters say they carry too much debt, but 59% of
renters surveyed by Fannie Mae don’t even know what ratio is
acceptable. Lenders like to see a back-end ratio that does not
exceed 36% of the buyer’s stable monthly income. All of this leads
us to the bottom line: Don’t let a lack of knowledge or
misinformation keep you from buying this year. If you don’t know
where to start, or have any other questions about the market, we
would be glad to help. Give us a call or send us an email. We look
forward to being in touch!