Linton Hall Provides First-Timers Tips for Buying and Financing a Home

Just five years ago, one could buy and finance a home relatively easily. However, since the Great Recession and the crash of the housing market, many people are finding it difficult to qualify for home loans. The shifting scale of home values and prices has created once-in-a-lifetime opportunities for younger people to enter the real estate market, while leaving others apprehensive to get back into it—after all, values have dropped more than 40 percent in some markets!

Searching for your dream home can be complicated enough, let alone making sure it can be successfully financed. Regardless if a one is a new homeowner or a veteran, Linton Hall knows how stressful the process can be. To ease this burden, keep the following suggestions in mind when buying and financing a home:

  1. Save, Save, Save! It is important to reserve as much money as possible for the down payment. Several first-time homeowners will invest in a mortgage insured by the Federal Housing Association. As a part of this program, buyers can put down as little as 3.5 percent of a home’s cost. If the home doesn’t qualify however, one must apply for a conventional loan—requiring between 10 and 20 percent of the purchase price as a down payment.
  2. Be responsible with your finances. Now more than ever, lenders are taking a closer look at applicants’ debt-to-income ratio, in addition to one’s housing-to-income ratio. Generally, responsible lenders follow a strict 28/36 rule. This means that no more than 28 percent of your monthly income should go to housing costs, while no more than 36 percent should be devoted to debts.
  3. Make sure your credit report is clean. As a good credit score is critical to getting the best mortgage terms possible, it’s important to review your score and make sure it’s error-free. Under law, you can request one free credit report each year through one of the major credit bureaus (Experian, Equifax, and TransUnion). Before applying for a mortgage, look at your credit score and take active measures to fix any outlying errors.
  4. Plan for first-year expenses. Many new homeowners are so concerned with trying to scrape together a down payment that they forget about the additional expenses that go into setting up a house. It’s always a good idea to set aside $5,000-$10,000 for essentials such as a lawnmower, dishwasher, basic decorating, or unexpected repairs that may pop-up. (It would be awful for the air conditioning to stop working during the hot summer months, for example!)
  5. Play hard to get and shop around. It’s important to look at several options to get the best home for your dollar. The same holds true when applying for a mortgage—get proposals from at least three or four lenders before deciding on the best offer.
  6. Consider buying a “starter” home or “fixer-upper.” Although these properties are often smaller and require minor repairs, they’re also a great opportunity to enter the real estate market at a lower cost, while building valuable equity at the same time. Look for a house that needs a little love and attention, situated in a neighborhood where the other homes are well maintained or being remodeled.
  7. ALWAYS do a home inspection before agreeing to any transaction. Even if you’ve just received the offer of a lifetime, buying a home without an inspection first would be a huge mistake. Not only will the professionals be able to alert you to potential problems that may not be obvious to an untrained eye, but it could also be useful should you need to sue the seller for concealing problems.



About Ashley Leigh

Ashley Leigh is one of the most successful real estate agents in the United States and founder of Linton Hall, Realtors®, the premier real estate company in Prince William County, Virginia. In his book Billion Dollar Agents, Steve Kantor featured Ashley for individually producing well over $2 Billion in career sales selling thousands of homes. Ashley Leigh's innovative marketing programs have been have been written about in Fortune magazine. Additionally, Ashley has been profiled in RISMedia’s Real Estate Magazine and Power Team Report and has been recognized by REALTOR Magazine as one of the Top Sales Agents in the U.S. The Wall Street Journal ranked Ashley as one of America’s Top 20 Realtors in the Nation for his sales production for several years. Connect with Ashley on Google+

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