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For Buyers - Tailor Made Loans
When you're ready to buy a home in Old Town, Kingstowne, Del Ray, or Manchester Lakes, you'll have plenty of choices when it comes to financing, but keep in mind that all mortgages are credit score driven. No
two buyers are exactly alike, so the mortgage industry has been
proactive and responsive when it comes to creating loan products
to help buyers find a home.
From the first-time buyer, to the experienced investor, mortgage
companies have made it very easy to find a loan that will best suit
your needs, but due to the recent changes in the lending industry, qualifying has become tighter than in the past.
There's still more to choose from than the traditional 30-year fixed rate mortgage, and these financing options can work to your advantage
when fully understood.
| Do you need a lower interest
to qualify and purchase, but are also scared of rising interest
rates? |
Consider a 10-year interest-only loan that then automatically transfers into a 20-year fixed
loan at the same time. Why this is a good fit? You can weather
the interest rate storm with a low rate, and build equity during
the 10-year period. Once the 20-year period kicks in, you can
either continue, or refinance if the rates are lower. (This assumes that the real estate market is stable or on the incline allowing you to build equity in your home.) |
| Are you purchasing a new construction home
from a builder? |
Consider a loan with a longer interest-rate
guarantee. Why this is a good fit? This is perfect for the buyer
who is fearful about the uncertainty of interest rates over
the long term. Usually with new construction, the lender will
lock-in your rate within 30-60 days of home delivery. With a loan
rate guarantee, the stress of an unforeseen increase in interest
rates with a higher estimated monthly payment, is eliminated. |
| Do you need a year or two of breathing room
before making full payments? |
Consider a fixed-rate loan with an initial interest rate buydown. Why this is a good fit? In a cool buyers
market, this type of loan is ideal for buyers who held the short
end of the stick during a hot sellers market. With a buydown,
a home that was not within reach becomes within arm’s
length because a lower interest rate means lower payments, which
means greater affordability. |
| Are you in a high appreciation market and
expect to move in 10 years or less? |
Try the interest-only ARM loan with a longer
amortization period. Interest-only ARM loans usually come in
5/1, 7/1, or 10/1 types. With these loans, your required monthly
payment is only the interest portion. In a hot sellers market
where appreciation is on the upswing, buyers take advantage
of home ownership, with the tax advantages, while the value
of the home continuously increases. |
| Do you want cash flow and to build up equity? |
Look into the flexible option ARM. This type
of loan will allow you to make the interest-only payment in
months where you need some extra cash. The rates for these loans
may be a little higher over the long run, but in the short run,
the option of having to pay only the interest portion of the
monthly payment can be very helpful. |
| Are you purchasing a four-plex? |
Try the Alt-A mortgage, which offers loans
at rates between prime and subprime for borrowers whose loan
needs don’t conform to Fannie Mae or Freddie Mac guidelines.
This loan is more suitable for investors. |
| Are you a firefighter, teacher, or police-officer,
or have an income at or below the area’s medium? |
Many lenders have special first-time buyer
programs, and community partnership programs. Popular programs
like the Virginia Housing Development
Authority (VHDA) loans, and county government housing grants
make it possible for lower-income families to qualify for homes
in the areas where they work. |
Do you want a traditional fixed rate but
need a lower payment? |
The much anticipated 40-year loan may be
a fit for you. Your equity builds slower, but your interest
rate is firm and secure, and will never change. |
Before you give interest-only loans the cold shoulder, know that these
loans do allow you to make extra payments that can go toward paying
down your principle balance. While this type of loan takes
more financial discipline, it can be one of the best tools
to enable you to purchase a home a step above what you would qualify for
with a traditional 30-year fixed rate loan. Interest-only loans are risky because you can make the minimum required payments, and years later not have paid any money toward the principal balance. It's worth an hour of your time to consult with an experienced loan officer to discuss your current financial situation so that you make the best choice in selecting your mortgage loan.
My goal is to help you buy a home that you can afford, where you can maintain a comfortable lifestyle and build lasting memories. We often meet with buyers who are not yet in a position to purchase a home and that's ok. It's better to have the information you need upfront so that you can make an informed decision, than to jump in to an expensive purchase and find yourself in a home that you cannot afford. If the time is not write, we will help you formulate a game plan so that you know exactly what you need to do in order to purchase a new home.
More Tips For Buying Alexandria, Virginia Real Estate
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