Orange County, Virginia, has become one of the most popular areas for people with families. Even though it’s a mostly rural area, it is still close to large cities like Richmond, DC, Charlottesville, etc. Rural areas and suburbs have become desired locations for families looking for new homes, or vacation homes, especially during the pandemic. With that in mind, we want to cover a simple and useful Virginia home loan guide and get you one step closer to your dream house! Let’s get started!
What is a home loan?
Let’s start by defining what a home loan is. Also known as a mortgage, it is a type of loan used only to purchase a house. A lender creates a contract with the borrower for a specified amount of money. The borrower uses that money to buy a house and pays monthly installments to the lender over a period of 15 to 30 years.
When you start browsing the hottest neighborhoods in Orange County, Virginia, be sure to check with your agent what the average cost of homes is. That will tell you if your credit score will allow you to get the amount you will need to buy a house.
Let’s break down the structure of a monthly loan
One of the most critical parts of our instructional is to teach you how to calculate your monthly payment. To get the amount of your monthly loan payment, take the principal amount (the sum that the lender borrows you) and apply the interest rate to it.
conventional fixed-rate mortgage – a kind of loan that conforms to the size of the loan and your financial budget, and the interest rate is fixed until it is fully paid;
adjustable-rate mortgage – interest rate fluctuates and will change based on the predetermined index;
FHA mortgage – Federal Housing Administration loan has more flexible lending requirements than a conventional loan. It also includes insurance premiums, but more of that in the next section;
VA mortgage – Department of Veteran Affairs loan will allow eligible service members to purchase a home with a low down payment, or without a down payment;
Jumbo mortgage – this type of loan is what you would usually use if you want to purchase a luxury home when the price exceeds conforming loan limits. To get it, you need a high credit score and a low debt-to-income ratio;
What are insurance premiums and property taxes?
When buying a home in Virginia, you also need to pay an annual insurance premium that protects your home from any damage. It also protects you from a financial loss or if someone gets injured on your property. Furthermore, you need to pay quarterly property taxes to your local municipality.
It often happens that a lender pays for both the taxes and insurance premiums. In that case, you will actually pay more than your monthly mortgage payment, and that money goes into your escrow account. Then, the lender uses it to cover the expenses when they are due.
When we consider the cost of purchasing a home, paying your real estate agent, and organizing a relocation, you can see how important it is to precisely calculate all of the expenses and know your financial limit. Through this guide, we will also teach you how to save money whenever possible. Since you cannot cut corners when it comes to paying your lender, you can at least consider consulting Verified Movers, and they will connect you with affordable and licensed moving companies in the area.
What is a promissory note?
When you sign the contract with your lender, there is also a second agreement included. It is called a promissory note, and when you sign it, you oblige yourself to repay your home loan and the interest rate. Furthermore, you pledge to stick to the repayment schedule.
A second mortgage and how to use it
It is a common practice to get a second mortgage after you purchase your house. This loan comes in two forms: home equity loan and home equity line of credit.
While with a home equity loan, you borrow a sum of money and pay it back with interest over time, a home equity line of credit works a bit differently. You can borrow a granted amount of money over time, and you can split it. That means you can borrow one amount during this year and the rest during the following year. This means you can calculate how much money you need, and you are not under the obligation to get the whole sum.
A second mortgage is calculated if you take the total cost of your home and subtract the remaining mortgage balance. If you bought a home worth $150,000, and you have $100,000 to pay, that means you own a percentage of your home in the sum of $50,000. That sum is how much you can borrow for your second mortgage.
One of the major benefits of a second mortgage is that you can spend it on anything you want. While you can do home renovation projects, you can also spend money on anything else, like paying for relocation. With that money, you can hire movers that provide an easy and stress-free process. It will undoubtedly make your life a whole lot easier and free up some time to focus on other more pressing matters.
How to secure a mortgage
When you apply for a mortgage, the first step is to research lenders and find the best interest rates for your pocket. Securing a mortgage is a lengthy process, though. The main requirements are a favorable credit score, a low debt-to-income ratio, and a down payment.
A credit score is considered good if it’s above 670. You can still get it with a lower credit score, but your interest rate will be higher. Your debt-to-income ratio should be below 36%, and the down payment is at least 20% of the price. The higher the down payment is, the lower the interest.
Virginia home loan guide made easy
Do not be frightened by the process of getting a mortgage. We hope that this Virginia home loan guide has everything you need to go through the process with ease. Once you have your dream home secured, you will have a lot to do Virginia and you will never be bored. Best of luck in buying the home of your dreams!
Whether you’re looking for homes for sale in Lake of the Woods VA or Waterfront property in Virginia we are your Real Estate Advisors for Stafford, Fredericksburg, Spotsylvania, Locust Grove, Central Virginia, and Greater Virginia. Thinking of selling? In any market condition, “what is my home worth?” is the #1 question asked by homeowners. If you wish to sell your home, it needs to be sold for top dollar and in a timely manner. Pricing your home accurately, Pat will partner with you to make the selling process so much easier. Get started today by calling us at (540) 388-2541 or contact Pat Licata.
To see available Lake of the Woods properties, please visit our site.
Welcome to 110 Independence Street, located close to the back gate in amenity-rich Lake of the Woods! This beautiful, well-maintained home is only one year old. Why wait for new construction when you can have new without the wait? As you arrive, you are welcomed by stone accents and a front porch that will be one of your favorite areas on which to relax. As you enter, you will love the gorgeous hardwood floors, designer interior doors and all of the fine finishes! Imagine an open concept with the gourmet kitchen and family room flowing so effortlessly to make family living easy and entertaining a breeze. As you continue through the home up to the owner’s suite, you will feel how inviting and spacious the suite is with cathedral ceilings, a massive walk-in closet and an elegant en-suite bathroom. To complete the upper level, there are three additional bedrooms conveniently spaced out, as well as a full bath and laundry room. Wait…that’s not all: the finished lower level offers a half bath and expansive finished area that can be used as flex space, family room, game room, or a fifth bedroom.
A private, gated, secured community, Lake of the Woods offers anything and everything you could possibly want. Home to two lakes (the 550 acre main lake and a 35 acre “fishing lake”), a golf course, an equestrian center, a fire and rescue department, and a church all within the gates, Lake of the Woods simply has it all. Whether your passion is boating, water skiing, kayaking, golfing, horseback riding, or simply taking in the breathtaking views from the clubhouse while enjoying a fabulous meal, from your own deck or yard, or from one of the beaches, you won’t be disappointed! Perhaps you’d like a game of bridge or volunteering your time and talents…Lake of the Woods offers more than 60 clubs and/or organizations from which you may choose to become involved. Located in Orange County, we are fortunate to enjoy low real estate taxes. Coupled with home prices ranging from the low $200,000s to over $2,000,000, Lake of the Woods is the perfect community for both full-time residents, as well as weekenders. But don’t take my word for it, please come see for yourself! I will gladly give you a tour of Lake of the Woods by boat and by car so that you may experience why I love Lake of the Woods!
Whether you’re looking for homes for sale in Lake of the Woods VA or Waterfront property in Virginia we are your Real Estate Advisors for Stafford, Fredericksburg, Spotsylvania, Locust Grove, Central Virginia, and Greater Virginia. Thinking of selling? In any market condition, “what is my home worth?” is the #1 question asked by homeowners. If you wish to sell your home, it needs to be sold for top dollar and in a timely manner. Pricing your home accurately, Pat will partner with you to make the selling process so much easier. Get started today by calling us at (540) 388-2541 or contact Pat Licata.
To see available Lake of the Woods properties, please visit our site.
Buying a new build is the best way to craft a home that fits all your needs, and you’ll get the customization you crave.
Material costs are on the rise, and you shouldn’t wait for them to come down—invest in new construction now to lock in your preferred price.
We have the knowledge and network of connections you need to get started on your new construction project. Give us a call and we can discuss your options!
What if Your Dream Home Doesn’t Exist Yet?
The past year has made many homeowners redefine what their dream home looks like, and it’s something different for everyone. If you’ve spent time searching the real estate market but can’t find an existing home that suits your specific needs, you should consider new construction. Whether it’s a custom-built home, a recently renovated older property, or a spec home in a newly constructed neighborhood, there are tons of options available right now. And luckily for you, we have all the knowledge you need to bring your dream home into existence.
Here’s what you need to know about new construction
Buying new construction isn’t as simple as selecting a floor plan then signing the dotted lines. There is a detailed timeline for constructing a home that you’ll need to discuss with your builder and lender. When you work with an agent who specializes in new builds, you’ll learn all the nuances that come with buying new construction—plus, you’ll have someone who will always be on your side.
When you decide to buy a new build, you’ll likely check out model homes in the area. At these model homes, you might meet an agent who will give you a tour and tell you a bit more about the builder. In these scenarios, the agent always works for the builder’s best interest, not the homebuyer’s—this is why it’s crucial to find your own agent to guide you from the initial purchase of your new construction home to finalizing the closing documents.
We’ve heard the rumors, too…
In the midst of today’s inventory shortage, demand for building materials is at an all-time high, which means resources like lumber certainly aren’t cheap. Almost all costs associated with construction have increased in 2021—and they aren’t expected to come down anytime soon. With this in mind, now is the time to invest in new construction before costs continue to rise.
Partially due to the lack of existing housing supply, about one in four homes are now newly built. Whether you’re interested in a pre-built spec home with less prep work or a completely custom build with your say written all over it, you should definitely take a look at the perks that come with a new build—and customization is just the beginning.
Design your own dream home
This time, you can have your cake and eat it too—or better yet, you can have your home built with your custom designs in mind. When you choose to build a home from the ground up, you can customize every single detail. New construction homes are meant to be tailor-made to your desires, so don’t be shy about asking your builder for upgrades or personalizations. From an open-concept floorplan to updated finishes and fixtures, the options really are endless when you choose new construction!
Think new car smell, but better
One of the top appeals of building your own home is that new, never-been-used feeling. When you buy new construction, you’ll get all brand-new appliances. In addition to all the bells and whistles in your new home, it is also likely to have green features like efficient lighting, effective insulation, and smart thermostats—all of which will save you money on your utility bills. And if your new home requires any repairs after moving in, most builders offer warranties and will get everything back in top-notch condition for free within a certain timeframe.
Ready to Build Your Dream Home?
Now’s a better time than ever to invest in a new construction home—and luckily for you, we’re the new home experts! We have the local area knowledge and expertise in new builds to help you navigate the new construction process from start to finish. Contact us today to make your dream home a reality!
