Frequently Asked Questions

How do I find a Loan/Lender? 
Shopping for a loan is like shopping for any other large purchase: you can save money if you take some time to look around for the best price. Different lenders can offer different interest rates and loan fees; and a lower interest rate can make a big difference in how much home you can afford. Most lenders need 4-6 weeks for the whole loan approval process.

Should I get Pre-Approved? 
YES! We will make sure you are pre-approved for a home loan before we start looking at properties.

How do I know what I can Afford? 
Your income and debt will be the determining factor of the amount you can afford to spend on a home. A general rule is to look at homes that do not exceed 2.5 times your annual income. This can change based on the area and market in which you are seeking home ownership. Another rule of thumb is to keep your monthly mortgage payment below 29% of your monthly gross income. Any other debt you may have (auto, credit cards, etc.) in addition to your monthly mortgage payment should not surpass 40% of your monthly gross income depending on the kind of mortgage loan you are applying for.

How much Money do I need up front to Buy a House?
 In general, you need to have enough to cover three costs: earnest money, down payment, and closing costs. Earnest money typically ranges from $500 TO $2000. The down payment is generally a percentage of the cost of the home; the amount you put down can affect your interest and therefore your monthly payment. Finally, the closing costs are those associated with processing the paperwork to buy a house; they are paid at settlement and average 3-4% pf the price of the home.

What will My Mortgage Cover? 
Typically your mortgage payment covers four parts: principle – the amount of repayment for what you actually borrowed; interest – payment to the lender for money you’ve borrowed; homeowner’s insurance – paid to your insurance company to insure the property against loss; and property taxes – the annual taxes assessed on your property.

What other Costs do I need to Consider? 
Monthly utilities are a big one and important to take into consideration when figuring your monthly budget. I will help you get information from the seller on how much utilities usually cost. You may also have may homeowner or condo association dues. Finally, you will want to take into consideration costs associated with your new home: lawn mower, snow blower, yard maintenance, etc.

Janice Taylor
Janice Taylor
Associate Broker
200 Westgate Parkway Suite 102 Richmond VA 23233