Saving for a New Home
This website makes use of Macromedia(R) Flash(TM) software.
Your current version of Macromedia Flash Player cannot display this site.

Downloading the latest version is free and will only take a moment.
Be sure to come back and explore our site when you are finished.



 
We'll Get Your
Home Sold, Too!
E-mail us for a free, no-obligation Marketing Proposal for a timely, profitable sale of your home.
Decorative Bar
Properties For Sale
Map Search the MLS
Our state-of-the-art MLS map search now includes separate Forclosure Search and the ability to Search by Price Drop.
Index of Homes for Sale
Live MLS Feed.
No log-in, no searching, simply See All Homes for Sale by selecting the various communities in:
Ashburn 
Leesburg
Potomac Falls
Sterling 
South Riding and Chantilly
Great Falls
Herndon 
Reston 
West Loudoun Country Homes
Live MLS Feed.
See all rural country homes and farmettes for sale in Aldie, Bluemont, Hamilton, Lovettsville, Middleburg, Paeonian Springs, Purcellville, Round Hill, Upperville and Waterford.
See All Condos for Sale
Live MLS Feed. Includes all condos for sale in Ashburn, Leesburg, Potomac Falls, Sterling, South Riding, Herndon, Reston and Chantilly.
See Foreclosures Only
All Foreclosure Homes mapped out with complete details, photos and community information.
Decorative Bar
Rental Homes
See All Rental Homes
Live MLS Feed. Includes all MLS listed single family homes, townhomes and condos for lease in Ashburn, Leesburg, Potomac Falls, Sterling, South Riding, Great Falls, Herndon and Reston.
Decorative Bar
Low Rates Prevail
Mortgage rates are now at historic lows, see national averages below.
Decorative Bar
Recent Home Sales
See Recent Home Sales
Compare the asking price to the sales price, recent home sales in the following Loudoun and Fairfax communities:
All Ashburn
Ashburn Farm
Ashburn Village
Belmont
All Leesburg
Lansdowne
River Creek
All Potomac Falls
CountrySide
Cascades
Lowes Island
Potomac Lakes
All Sterling
Sugarland Run
All South Riding
All Loudoun Condos
All Herndon
All Great Falls
All Reston 
Decorative Bar
Floor Plan Library
Index of Floor Plans 
See floor plans and illustrations of the houses and townhouses available in the communities of:
Ashburn Farm
Ashburn Village
Cascades
Great Falls Chase
CountrySide
Lansdowne on the Potomac
Tavistock Farms
Forest Ridge
Potomac Crossing
Sterling Park
Sugarland Run
Dominion Station
Richland Forest
Rolling Woods
Seneca Ridge
Village of Waxpool
decorative bar

 

 

 

For First-Time Buyers
A Practical Guide for Saving to Purchase Your First Home Home
decorative bar

Piggy Bank PhotoThe easiest way to build assets for the purchase of a home is to own a home already appreciating in value. Anyone who has owned a home in the Northern Virginia region over the past few years has built up substantial equity, giving them a nice "savings pool" as a down payment for the purchase of the next home. If you are a potential homebuyer with considerable equity in your current residence, you can fast forward to Visualizing Your New Home. If you are a first-time buyer with minimal assets and various debts, however, read on.
 
    Often, first-time buyers face the challenge of accumulating assets and minimizing their liabilities as they strive to get into the home market. While your current financial situation is central to your plan for purchasing a home, you should not become overly concerned. You may be earning an excellent income, but feel it´s not enough to save for a down payment. Or you may be struggling to get by and don´t know where to start. Regardless of your circumstances, you can start the process of saving for a home. You don´t need to save 20 percent or even 10 percent of the purchase price before you start thinking about buying a home. Today, first-time buyers are able to buy homes (at reasonable interest rates) with as little as 3 to 5 percent down. In some cases, no down payment is required. You may only need the closing costs of the loan to purchase your first home. But you will need some cash.

    Where do you start if you have no assets and, indeed, you are in debt? It´s simple. You create a practical, step-by-step approach based on your financial history and stay with your plan until you realize your goal. As with all things in life, perseverance will pay off.

    The key to setting financial goals is to be specific. Effective goals need to be SMART: Specific, Measurable, Action-oriented, Realistic and Time-limited.

    Be Specific:  Set a specific goal. You can say, "I don´t want to live in my apartment anymore." But what does that really mean? Do you want to buy a house? How much do you want to spend? Will a condo or townhouse fit your needs?

    Make it Measurable:  Simply saying that you don´t want to live in your apartment -- or move to another apartment -- is not good enough. If you say, "I will find a home in a price range I can afford within six months," then you will have something by which to measure your success. You have to start by creating the measurement.

    Be Action-oriented:  The goal is not static: it involves doing something. Do not use the words "going to," as in "I´m going to be rich." Without taking action, you are always "going" somewhere -- but you never arrive.

    Be Realistic:  Talk to a Realtor or a loan officer to determine what your near-term financial goals will have to be in order to qualify for a home loan.

    Be Time-limited:  A goal is nothing more than a dream with a deadline attached.

Getting Started 

    Once you have set your goal, you´ll need to start outlining how you will achieve it. But before you do, two other important lessons will help you along the way. First, in order to reach a goal, it´s best to have other people involved. Share with other people. Do not work on it alone; have other people value your goal, too. The people you work with, or your spouse and friends, can help you focus on making your goal specific and measurable. They can question you about being realistic and having a deadline, and they will support you in getting what you want. You can also use the experience of others. You may save yourself some painful lumps if you learn what worked, or didn´t work, for others. (Try to determine how similar your situation is to the frame of reference you´re using.)

    Second, track your results. Take the time to write down the small steps taken toward your goal in a calendar or appointment book. If you set a realistic goal and track your progress, you can modify or evaluate your progress continually until you eventually meet your goal!

Tips on Meeting Your Goals

    Know where your money is going, and address this honestly and meticulously. You cannot realize any goal without first finding out your starting point. You may not know all the numbers, so "ballpark" them and go to the next step to find out how to get more concrete answers.

    Types of Monthly Expenses:  Learn to understand the categories of your various types of monthly expenses -- discretionary, variable and fixed. Discretionary expenses are the ones over which you have complete control. They may include going to the movies, meals out, personal trainers, vacations, clothing or lottery tickets, for example. Variable expenses show up every month. The only difference is the amount of the expense. As an example, you´ll have a food bill every month, but it could be higher or lower from one month to the next based on what you buy. Your utility bills, such as telephone, gas and electric, will come in month after month, but they may be higher or lower depending on your usage or the season. Finally, fixed expenses come in every month and do not change. Rent or mortgage payments, car payments, and insurance premiums fall into this category. (It could also include the minimum payment on credit cards, but even these can be changed.) Note, too, that while rent is a fixed expense, you could consider getting a roommate for a period of time as a means of building up your savings and cutting your expenses.

    Getting Out of Debt:  If reorganizing or consolidating your debts or selling assets isn´t enough to get your financial house in order, you may need to consult a financial planner or a creditassistance organization such as the Consumer Credit Counseling Service.

    Millions of Americans have too much credit card debt, which limits their buying power and their ability to save for a down payment. If you fall into this category, let me assure you that saving is possible. Let´s start by looking at the different levels of credit card debt.

    Level one credit card debt is debt that you pay off monthly. This would include any credit card account that carries no balance into the next month. Level two credit card debt occurs when you carry debt from month to month, but you regularly make payments above the minimum. At level three credit card debt, you are only able to make minimum payments on your credit cards. And at level four, you cannot make those minimum payments.

    Now let´s say that you are trying to save for a home and your credit card debt is mostly at level three (that is, you can just make your minimum payments). You still have options. You may want to consider a consolidation loan, look around for a low-interest credit card, or call your current creditors and ask them to reduce your interest rates. If they agree to do so, make sure that you do not reduce your payments just because they´ve lowered the interest rates. Maintain your payment level and you´ll eliminate the debt sooner.

    What if you´re at level four and you can´t even make the minimum payments? A book by Jerrold Mundis called How to Get Out of Debt, Stay Out of Debt, and Live Prosperously may be useful to you. Regardless of whether you´re at level two, three or four, do not add any new debt while paying off your current or old debt.

    If you pay off your debt the "quick and easy" way, that debt invariably returns. People who borrow against the equity in their home or refinance it, receive an inheritance or tax refund, win the lottery, get a gift from parents or others, declare bankruptcy or get a consolidation loan to deal with what they owe have learned no new skills to pay off debt. Such maneuvers do not produce the necessary skills. Rather, people learn to use similar tactics to get themselves out of debt the next time! Creating financial independence comes from learning to handle money effectively.

    Pay Yourself First:  Pay yourself before you pay the telephone bill or pay for groceries, rent or transportation expenses. If you want to feel that you are moving toward your goal, you have to see the results in the bank -- that means paying yourself first. After you´ve paid yourself, then pay your expenses. These will include your credit card or other debts, but when they´re paid off you can dramatically increase the amount you pay yourself.

    The average person spends first and then finds that about 10 to 20 percent of his or her income disappears. If you pay yourself first, all you will lose out on spending is that 10 to 20 percent that would have been lost regardless. Even if all you can start with is setting aside 10 percent of your income, then you are at least on your way to that down payment. Remember, any allocation is better than none at all.

    Once you start saving -- and, more important, once you have a savings plan -- you will know how much money you can afford to put down on a house. Maybe it is more than you think. And there are loan programs out there for almost anyone. Now is the time to make the commitment to saving so that you can soon make the commitment to buying a home!

Know Your Credit Score!

    Obviously, maintaining good credit is essential. You may be unaware of how many organizations access and use your credit information to make decisions that affect you. In addition to those you would expect to check on you -- such as a credit card issuer, department store, mortgage lender or car dealer -- your credit may also be checked by a new employer, life or auto insurance company, or prospective landlord. Issuers of homeowner´s insurance also check credit ratings and may refuse to issue a new policy or renew your existing policy. You can understand, then, how others see your good credit as a reflection of who you are as a person.

    One of the primary methods the mortgage lending industry uses to assess your credit worthiness is your FICO score. (FICO stands for Fair Isaac Corporation, which developed and keeps a classified scoring system.) A FICO score is a numeric score that summarizes your credit history and is maintained by credit reporting companies. FICO uses different models and adjusts the score depending on a variety of factors, such as your amount of credit, any bankruptcy you have had, how many credit cards you have with no balance or how many credit cards you have with high balances. FICO is a third party that provides these scores to a potential lender. The lender does not calculate the score but uses it to establish a borrower´s creditworthiness. You can get more information from their website at www.fairisaac.com.

    A score in the range of 660-700 is good and would allow the potential borrower to qualify for a loan ranked as A, which would have the lowest interest rates and most favorable terms. If a mortgage rate of 6.5 percent were the best available rate at that time, a person with an A score would qualify for that rate. If the score were around 620-650, that person would qualify for B- or a B+ loan, and the interest rate would be higher. With a score of 580-620, a borrower would fall in the C range and find that the interest rate offered would be significantly higher than the best rates. These loans are "subprime"; only certain mortgage companies specialize in them. Lower scores mean higher fees, too. Obviously, the opposite is also true -- the higher your score, the better the terms of the mortgage and the easier it will be to qualify. (The "scoring system" actually goes to 850.)

    Regardless of your situation, you should get a copy of your credit report every year to make sure that all of the information is correct. It is important to note that your FICO score is affected each time there is an inquiry from a lender checking on your credit worthiness. If you get a copy of your credit report, please use that exact report as you search for a lender. Do not allow every lender to search your credit worthiness by running a credit report because if this happens, your score gets lowered. We discuss this issue in How to Find a Good Lender.

    You are entitled to one free credit report a year from the three major credit bureaus -- Equifax, Experian and Trans Union:

• Equifax   PO Box 105873 Atlanta, GA 30348    800-685-1111

• Experian   PO Box 2104 Allen, TX 75013    888-682-7654

• Trans Union   PO Box 390 Springfield, PA 19064    800-888-4213

    In addition, because of a recent amendment to the federal Fair Credit Reporting Act (FCRA), you can get a free credit report annually through the Annual Credit Report Request Service. Contact the service at Central Credit Report Data Bank, www.annualcreditreport.com.

Annual Credit Report Request Service,
P.O. Box 105281, Atlanta Georgia 30348-5281    877-322-8228

 

Prudential PenFed's TeamWorks.

We're All About Service and Results

Pat Paulas, Drew Paulas and Associates, Realtors
Loudoun County Real Estate and West Fairfax County Real Estate
Prudential PenFed's TeamWorks
11864 Sunrise Valley Drive, Suite 101 • Reston, Virginia 20191
703.909.6333
e-mail
  theTeam@eLoudounHomes.com
 
 

Prudential PenFed's TeamWorks. Specialists in Loudoun County Real Estate and West Fairfax County Real Estate
TeamWorks

Real Estate:  
The Ins & Outs
Our Continuing Series on How it All Works.

decorative bar

The Best Realtor
Here's what to look for when scouting agents.
Market Your Home 
A look at preparing a home in today's market
Best Listing Agent 
Look for peace of mind and a profitable sale.
Top Buyer's Agent 
Get the best price and best terms. What to look for in an agent.
Buying a New Home 
Keep your focus, its an emotional rollercoaster.
Find the Best Lender
 
A look at the pros and cons and your options.
The Loan Process 
Getting that loan and buying a new home.
Buying a First Home 
Its not hard to get your financial stuff together, you'll be surprised! 
Visualize the Home 
Know what you want and what you just gotta have is key to buying.
Home Inspections 
Exercise your right to know the true condition of the home you buy.
Investing in Homes 
Real estate investing, the options & rewards.
Real Estate Jargon 
Hey, its going to be flying around, might as well learn some of it.

We Welcome
Competition
decorative bar

Below are some paid ads from other real estate sites, we urge you to check them out -- we'll see you on the backclick




 
Home | Home Page | Table of Contents | MLS Search | All Homes For Sale | All Forclosures | All Rental Homes | Homes For Sale | Ashburn Homes For Sale | Leesburg Homes For Sale | Potomac Falls Homes For Sale | Sterling Homes For Sale | South Riding Homes For Sale | West Loudoun Homes For Sale | Chantilly Homes For Sale | Great Falls Estates For Sale | Herndon Homes For Sale | Reston Homes For Sale | Condos For Sale | Rental Homes | Recent Sales | Ashburn Homes Sold | Ashburn Farm Homes Sold | Ashburn Village Homes Sold | Belmont Area Homes Sold | Cascades Homes Sold | CountrySide Homes Sold | Great Falls Estates Sold | Herndon Homes Sold | Lansdowne Homes Sold | Leesburg Homes Sold | Lowes Island Homes Sold | Potomac Falls Homes Sold | Potomac Lakes Homes Sold | Reston Homes Sold | River Creek Homes Sold | South Riding Homes Sold | Sterling Homes Sold | Sugarland Run Homes Sold | Loudoun Condos Sold | Floor Plans | Ashburn Farm Floor Plans | Ashburn Village Floor Plans | Cascades Floor Plans | CountrySide Floor Plans | Dominion Station Floor Plans | Forest Ridge Floor Plans | Great Falls Chase Floor Plans | Lansdowne Floor Plans | Potomac Crossing Floor Plans | Potomac Green Floor Plans | Richland Forest Floor Plans | Rolling Woods Floor Plans | Seneca Ridge Floor Plans | Sterling Park Floor Plans | Sugarland Run Floor Plans | Tavistock Farms Floor Plans | Waxpool Village Floor Plans | West Loudoun | Index to Country Homes | Aldie Homes on 1 Acre or Less | Aldie Homes on 1 to 5 Acres | Aldie Homes on 5 Acres or More | Bluemont Homes For Sale | Hamilton Homes on 1 Acre or Less | Hamilton Homes on 1 to 5 Acres | Hamilton Homes on 5 Acres or More | Lovettsville Homes on 1 Acre or Less | Lovettsville Homes on 1 to 5 Acres | Lovettsville Homes on 5 Acres or More | Middleburg Homes on 1 Acre or Less | Middleburg Homes on 1 to 5 Acres | Middleburg Homes on 5 Acres or More | Paeonian Spring Homes For Sale | Purcellville TownHomes For Sale | Purcellville Homes on 1 Acre or Less | Purcellville Homes on 1 to 5 Acres | Purcellville Homes on 5 to 10 Acres | Purcellville Homes on 10 Acres or More | Round Hill Homes on 1 Acre or Less | Round Hill Homes on 1 to 5 Acres | Round Hill Homes on 5 Acres or More | Upperville Homes For Sale | Waterford Homes For Sale | Contact Us
Long and Foster's TeamWorks is Now Prudential PenFed's TeamWorks
The Real Estate Arm of Pentagon Federal Credit Union