As balance is always tough to find in the real estate market. It is similar with financing. Either financing is too easy, and everyone can get a loan. Or, like now and the recent past, politicians and others have created much more regulation in regards to the home loan process. Home buyers are having to painstakingly validate every dollar in their bank accounts. Lenders want all “i”s dotted and all “t”s crossed. There is nothing wrong with this. It is good to have some level of oversight, but the lack of balance from year to year is amusing.
Buyers have to have a trusted lender in their corner along with their trusted Realtor. As many home buyers are finding, a pre-approval may not be worth the paper it’s written on. And this time not because of un-reputable lenders. It’s because of things they may not have anticipated, like: investor ratios, reserve funds, delinquency rates, and more.
Most first time home buyers in our area: Arlington, Tysons Corner, or even areas like Reston, who are looking to buy real estate, end up focusing on buying a condo. Condos in Northern Virginia are priced lower than town homes or single family homes. They also are often located in attractive or appealing areas that have good amenities and features such as easy access to shopping, roads, other avenues of transportation, and other public amenities. A buyer may be pre-approved by a lender, but just because they are pre-approved, doesn’t mean that the condo building or community will get the green light to keep the process rolling.
Many buildings or condo communities in Northern Virginia were built, or selling, at a time when developers didn’t care about they type of financing. These condo sellers and developers were likely more focused on their profit and exit strategy vs. the trouble that could befall these condo communities if extra steps weren’t taken to maintain the financing options for potential buyers and owners. This combined with the lack of concern for existing communities, has added up to equal many communities in hot areas like Tysons Corner (example = Gates of McLean), and Arlington (example = The Phoenix) who are no longer FHA approved. This can create a big challenge for some of these northern virginia first time buyers, as many don’t have extensive savings for a big down payment to work with a different type of financing.
Fortunately, I’m seeing some evidence that lenders are starting to get creative again. This weekend I visited a condo project in DC that a client is interested in, and there I was told that their preferred lenders were offering some great financing deals with Potomac Mortgage Group and BB&T Mortgage, at 95% LTV and even 100% LTV respectively. So even though I’m sure buyers will have to be just as diligent with their bank statements and pay stubs, and rationalizing every dollar in their accounts – it’s nice to see that the lenders are working hard to give buyers options.
So if you’re considering buying a home in Northern Virginia, and in particular in any of the areas mentioned above: Tysons Corner, Arlington, or Reston – and surrounding areas, I’d love to be your trusted advisor in real estate. We make sure to have great relationships with our clients, and also the great vendors we work with, such as loan officers, home inspectors, and more. Jeff Wu