Resources abound for first-time home buyers!
by Sarah Lockwood
Maybe it was the hours spent playing house was the lofted treehouse bunk bed my dad made for me. Or maybe it was my early infatuation with TLC’s “Trading Spaces” and then HGTV. Or maybe, as my Aunt Kay suggested, it was genetic.
“You don’t have to explain it to me, Sarah,” she said with an understanding smile. “You and I are the same. We’re nesters.”
It didn’t feel extraordinary to dream of buying a house at age 24. To turn that dream into a reality, however, I needed more than a gut feeling. Here’s what I learned over the course of the home-buying experience that helped make my dream come true.
First, you don’t need a 20 percent down payment to mortgage a house. That’s the biggest misconception for first-time home buyers, according to Ingrid Sell, a senior loan officer at Village Bank.
“In fact, if you’re a first-time home buyer, the down payment is less of an issue,” says Sell, who has worked in mortgages for 24 years and was, full disclosure, my mortgage broker.
The other misconception, she says, is that you need a perfect credit score. A loan officer’s job is to confirm that you can afford the loan you are applying for and have a history of paying your bills on time.
“We’re not looking for perfect credit for seven years,” Sell says. “Everyone should shoot for that of course, but life happens.”
With lower credit score and down payment requirements, Virginia Housing Development Authority (VHDA) and Federal Housing Administration (FHA) loans are popular first-time homebuyer financing options. There are also many grant options available for first-timers through the VHDA and Federal Home Loan Bank. But know this: if you don’t put 20 percent down, you will likely have to pay private mortgage insurance (PMI) with your monthly house payments. Depending on the type of loan, PMI could be required until you’ve reached 20 percent equity, or for the entire life of the loan.
For me, the PMI was worth it. With just under $1,500 (or about 1.3 percent) down, I was able to buy a humble rancher with a monthly mortgage payment lower than the rent I was paying for a third of an apartment in The Fan.
Psst, I’m a real estate agent.
This post was authored by local resident and REALTOR, John Womeldorf. John is known around town as Mr. Williamsburg, for both his extensive knowledge of the Williamsburg/ Hampton Roads area and his expertise helping buyers and sellers in the local real estate market.
If you are a homeowner searching for someone innovative to sell your home I would love to share my thoughts on marketing. You can read some of the stories I have written about the homes I have sold here.
Additionally, I have helped hundreds of folks find their dream home/ community and would love to help you find yours in Williamsburg, Yorktown, New Kent, VA Beach, Chesapeake, Suffolk, Isle of Wight Poquoson as well as Richmond.
You can reach me by phone at 757-254-8136 or email [email protected]
I look forward to serving your real estate needs!