Home Buyers

Whether you are a first time home buyer or have bought and sold several properties, the process can be daunting. We believe there are seven steps to take in order to call youself a home owner. 

Step 1. Personal Finances
                  Developing A Financial Plan
                  Save For A Down Payment
                  The Importance Of Your Credit Score
                  How Are Your Credit Scores Determined?
Step 2. Obtaining a Mortgage
                  How Much Home Can You Afford?
                  How Large Of A Loan Can You Be Approved For?
                  What A Lender Needs From You
                  Mortgage Terms
                  Loan Costs
                  Lender-Required Costs
                  Comparing Loan Costs
                  What Does A Mortgage Payment Include?
Step 3. House Hunting
                  Establish Your Criteria
                  House Hunting Tips
                  Compare Homes
Step 4. From Offer to Contract
                  Making An Offer
                  How An Offer Becomes A Contract
Step 5. Fulfill Contractural Obligations
                  Home Inspections
                  Homeowner's Insurance
                  What Not To Forget On A Final Walk-Through
Step 6. Closing/Settlement
                  Closing Terminology
                  What Happens At Closing
                  What Are Closing Costs?
                  Items To Bring To Settlement
Step 7. Move and get to know Northern Virginia
                  Moving Checklist
                  Getting Situated
                  
 

Step 1: Personal Finances Back to Top

Developing A Financial Plan     

A home is more than just a home — it’s the foundation of long-term financial and emotional security for you and your family. Yet, since buying a home is one of the most important personal and financial decisions you will ever make, it can be a very stressful time. You can reduce the anxiety associated with the home buying process by thinking and planning ahead. Before you find a home you want to purchase you will need to develop a financial plan. This plan becomes your guide, not only for saving for the down payment but also for covering other expenses, such as closing and moving costs.

Develop a Family Budget: Budgets are a necessary evil. They’re the only practical way to get a grip on your spending — and to make sure your money is being used the way you want it to be used. Setting a budget generally requires three steps: 

• Identify how you are spending money now by collecting several months worth of receipts and categorizing your expenses. You can use the budget worksheet included on the next page or use a budget software program such as Quicken or Microsoft Money.
  
• Evaluate your current spending and set goals that take into account your long-term financial objectives.
  
• Track your spending to make sure it stays within those guidelines.
  
• You will need to include a monthly savings goal in your budget and have that amount automatically withdrawn from your paycheck and deposited in a separate savings account.

Reduce your debt: Generally speaking, lenders look for a total debt load of no more than 41 percent of income. Since this figure includes your mortgage, which typically ranges between 28-35 percent of income, you need to get the rest of your installment debt — car loans, student loans, revolving balances on credit cards — down to between 6-13 percent of your total income.


Save For A Down Payment   

The purchase of a home entails certain up-front costs — the largest of which is the down payment which is expressed as a percentage of the total purchase price of the home. Although it’s possible to get a mortgage with only 3.5 percent down — or even less in some cases — you can usually get a better rate and a lower overall cost if you put down more. Shoot for saving a 20 percent down payment.

With a down payment under 20 percent, you will probably wind up having to pay for private mortgage insurance, a safety net protecting the bank in case you fail to make payments. PMI adds about 0.5 percent of the total loan amount to your mortgage payments for the year. So if you finance $200,000, your PMI will cost $1,000 annually.

Once you've considered the down payment, make sure you've got enough to cover fees and closing costs. These may include the appraisal fee, loan fees, attorney's fees, inspection fees, and the cost of a title search. As a rule of thumb, closing costs are roughly 3 percent of the purchase price.

If your available cash doesn't cover your needs, you may have several options:
(Please consult with a mortgage specialist or a CPA before taking any of these steps)

• First-time homebuyers can withdraw up to $10,000 without penalty from an IRA.
• You can receive a cash gift of up to $13,000 from each of your parents without triggering a gift tax.
• Some big companies will chip in on the down payment or help you get a low-interest loan from selected lenders.
• You may be able to  tap a 401(k) or similar retirement plan for a loan from yourself.

Check out loan programs available from the Virginia Housing Development Authority (VHDA) which has special loan programs for low-to moderate-income buyers.


The Importance of Your Credit Score

Before approving a loan and offering a mortgage rate, lenders will carefully review your credit report and score. Late payments, collection accounts, excessive debts, and credit inquiries contribute to having a high or low credit score. Mortgage rates are based on credit rating; the lower the credit score, the higher the interest rate. Hence, if you are hoping to get a great mortgage rate, which equals lower monthly payments, now's the time to improve your credit score.

The first step to improving your credit score is to determine where it currently stands. By law, you are entitled to one free report from each of the three major credit rating agencies per year.  

Consumers often find errors in their credit reports, so don’t be surprised if you find one or more on yours. You have the right to dispute any discrepancy. A dispute form is always included with your credit report that you can fill out and send back to the credit reporting agency by registered mail. Make sure you document each step you take in clearing your credit in case you need backup later on. Fortunately, the law is on your side. Any item that is not verified as accurate must be removed from your report.

Other ways to improve your credit score:

• Make sure to pay at least the minimum amount on all bills by their due date. 
• If possible, pay off or pay down revolving (credit card) balances to 33% of the credit limit. However, do not do so by  transferring the balance from one card to another. This may lower your score. Also, please check with your lender before using your cash to pay off or pay down your debts. 
• Do not open or close any accounts. 
• Do not apply for new credit. 
• Do not charge your credit cards to the maximum limit. 
• Avoid finance companies. Even if you pay the loan on time, the interest is high and it will probably be considered a sign of poor credit management. 
• Shop for mortgage rates all at once. Too many credit applications can lower your score, but multiple inquiries from the same type of lender are counted as one inquiry if submitted over a short period of time. 

Do not make any major purchases until AFTER the home buying process is complete (your mortgage lender will pull your credit score again shortly before closing and if there are any major changes, it could jeopardize your loan).


How Are Your Credit Scores Determined?

Credit scores range between 300 and 850 points. Scores above 620 are considered desirable for obtaining a mortgage. The factors affecting your score are:

• Your payment history. Late payments negatively impact your score. Fortunately, most lenders consider only the most recent 24 months’ activities to be relevant. 
• How much you owe. Owing a great deal of money on numerous accounts can indicate that you are overextended. 
• The length of your credit history; generally, the longer the better. 
• How much new credit you have. New credit, either as loans or credit cards, is considered more risky, even if you pay promptly. 
• The type of credit you use. Generally it is desirable to have more than one type of credit — installment loans, credit cards and a mortgage, for example. 

The approximate value that each aspect of your credit report adds to your credit score calculation: 

Payment History	35%
Amount Owed	30%
Length of Credit History	15%
Newness of Credit	10%
Type of Credit Used	10%

 

Step 2: Obtaining A Mortgage Back to Top

How Much Home Can You Afford

To determine your maximum mortgage amount, lenders look at: 

• Your credit history 
• Available cash for down payment and closing costs 
• Your income 
• Your existing debt and financial obligations 

Your maximum mortgage amount plus your planned down payment equals your home purchase price range.


How Large Of A Loan Can You Be Approved For?

To get a quick idea of what you can afford to spend, multiply your annual gross income by 4. For example, if your annual household income is $50,000, you might be able to qualify for a $200,000 home. This is just a rough estimate – the actual number will vary based on factors such as current interest rates and the rate for which you'll qualify based on your debt and credit history, as well as other financial factors.  

Mortgage lenders typically use two ratios to more accurately determine how much you can afford to spend on your mortgage:

Housing Expense Ratio—Mortgage lenders recommend that your monthly mortgage payment be less than 28% of your monthly gross income and that your recurring debt plus your monthly mortgage payment be no more than 36%. This percentage can change based on the type of mortgage you choose and sometimes the area in which you're looking to buy.

Debt-to-Income Ratio—You need to factor your other debts into determining an affordable monthly mortgage payment. Mortgage lenders look at whether your  total debt is larger than 30-40% of your monthly gross income. Remember, debt is not just credit cards and student loans. It can also include alimony, child support, car loans, and housing expenses.

Don't forget that you also have to save for the down payment, closing costs, inspection costs, moving, and other related expenses, and be sure to factor in any future plans that might impact your household budget.

Think long-term. Are you looking for a starter house with the idea of moving up in a few years or do you hope to stay in this home longer? This decision may dictate what type of home you’ll buy as well as the type of mortgage that suits you best.

Most importantly, give yourself a buffer. Remember that the mortgage is not the only expense of homeownership. Other expenses include maintenance costs, utilities, and other expenses you probably didn't pay for as a renter, such as water and garbage, and unexpected repairs. When deciding what you can afford, be sure to look at the big picture and not just the price of the home.


What A Lender Needs From You

• W-2 forms and federal tax return forms for the last two-three years for every person signing the loan.
• Copies of one or more months of pay stubs from every person signing the loan. 
• Copies of the most recent two months of bank or credit union statements for all accounts, including checking, savings money market, mutual funds, stocks and bond accounts. 
• Copies of personal tax forms for the last two to three years. 
• Copies of brokerage account statements for two to four months, as well as a list of any other major assets of value, e.g., a boat, RV, or stocks or bonds not held in a brokerage account. 
• Copies of your most recent 401(k) or other retirement account statement. 
• Documentation to verify additional income, such as child support, pension, etc. 
• Account numbers of all your credit cards and the amounts of any outstanding balances. 
• Lender, loan number and amount owed on other installment loans—student loans, car loans, etc. 
• Addresses where you lived for the last two years, with names of landlords, if appropriate.

 
Mortgage Terms

Before you go house hunting, it is important to get pre-approved for a mortgage. This way, you will not look at houses in the wrong price range (either too low or too high) and will be able to present a strong purchase offer when you find the right house. To make sense of that process, here are some terms you will hear about while shopping for a loan:

Lenders: Beside thrift institutions, commercial banks, mortgage companies and credit unions, you may also obtain a mortgage quote from:

• Mortgage Brokers:  Mortgage brokers offer to find you a mortgage lender willing to make you a loan. The lender, you as the borrower, or both, may pay your mortgage broker.  Make sure to ask about the fees that the mortgage broker will receive for its services.
• Government Programs: You may be eligible for a loan insured through the Federal Housing Administration (FHA) or guaranteed by the Department of Veterans Affairs (VA) or the Virginia Housing Development Authority (VHDA).

 Loan Types:

• Fixed Rate Loan: Fixed rate loans have the same principal and interest payments during the loan term, which may be set at 10, 15, 20 or 30 years.
• Adjustable Rate Mortgage (ARM): ARM’s usually offer a lower initial interest rate than fixed rate loans. The interest rate will fluctuate over the life of the loan based on market conditions, but the loan agreement generally sets maximum and minimum rates. Typically, this type of loan is advised only if you are planning to stay in the home for a short period of time.
• Conforming Loan: Conforming loans fit within certain guidelines established by Fannie Mae and Freddie Mac, the most important of which is loan amount which is currently set at a maximum of $625,000.
• Jumbo Loan: A jumbo mortgage is a mortgage with a loan amount above the industry-standard definition of conventional conforming loan limits. The average interest rates on jumbo mortgages are typically greater than is normal for conforming mortgages.

Miscellaneous

• Interest Rate and Points:  A “point” is a fee that equals 1 percent of the loan amount. Points are usually paid in order to obtain a lower interest rate. Typically, this is beneficial only if you are planning to remain in the home for an extended period of time (thus lessening the amount of interest paid over the life of the loan).
• Prepayment Penalty: Whatever type of loan you take out, make sure it does NOT have a prepayment penalty — an additional amount charged to you if you pay the loan off before the time period dictated by the loan papers.
• Lock-ins:  “Locking in” your rate or points at the time of application or during the processing of your loan will keep the rate and/or points from changing until settlement or closing of the escrow process. Ask your lender if there is a fee to lock-in the rate and whether the fee   reduces the amount you have to pay for points. Find out how long the lock-in is good, what happens if it expires, and whether the lock-in fee is refundable if your application is rejected.
  

Loan Costs

A home loan often involves many fees. Every lender or mortgage broker should give you an estimate of its fees. “No Cost”  loans may be available, but the interest rate charged is typically higher. Most fees are paid at closing, but some lenders may require up-front  payment for others; such as the credit report and/or appraisal. 

• Loan Origination/Underwriting Fee: This is a fee charged by the lender for processing the loan and is often expressed as a percentage of the loan or points. 
• Broker Fee: Fee charged by the mortgage broker for brokering the loan and is often    expressed as a percentage of the loan amount or points. 
• Document Preparation and Recording Fee: Fee charged for preparing the mortgage documents and recording the mortgage lien. 
• Survey: Pass through fee paid for an independent survey of the property to insure that the property is the size and in the location indicated. 
• Appraisal: Pass through fee paid for independent appraisal of the property to insure that the property is worth the money being paid by the lending institution.

Lender Required Costs

Certain fees, depending on your loan amount and the location of the property, are not negotiable. They are required by law and are paid at closing or folded into the loan amount. 

• Private Mortgage Insurance (PMI): PMI protects the lender against a loss if a borrower defaults on a loan. Lenders often require mortgage insurance for loans where the down payment is less than 20% of the sales price. 
• Title Insurance: Title insurance is an insurance policy that guarantees the property title (ownership) is free from the problems of hidden liens and claims. The title insurance company searches public records for the property to make sure there are no problems in the title's ownership and history. The fee for title insurance is usually included in the itemization of closing costs from the lender and is a one-time fee.
  • Lender Policy: Title insurance is usually required by the lender to protect the lender against loss resulting from claims by others against your new home.
  • Owner’s Policy: A lender’s title insurance policy does not protect you.  Similarly, the prior owner’s policy does not protect you.  If you want to protect yourself from claims by others against your new home, you will need an owner's policy. While rare, if a claim does occur, it can be financially devastating to an owner who is uninsured.  Unlike the required lender policy, the lenders policy is optional and can be refused at settlement. 
• Flood Hazard Areas: Most lenders will not lend you money to buy a home in a flood hazard area unless you pay for flood insurance. Some government loan programs will not allow you to purchase a home that is located in a flood hazard area. Your lender may charge you a fee to check for flood hazards. You should be  notified if flood insurance is required. If a change in flood insurance maps brings your home within a flood hazard area after your loan is made, your lender or servicer may require you to buy flood insurance at that time.

Comparing Loan Costs

Starting January 1, 2010, the federal government mandated that all loan officers use a standarized Good Faith Estimate (GFE) which clearly discloses key loan terms and closing costs. You can use the chart on page 3 of the GFE to compare loans.


What Does A Mortgage Payment Include

Usually, your monthly mortgage payment is made up of four parts: 

• Principal 
• Real Estate Taxes 
• Interest 
• Home Owners Insurance 

Certain funds are held by the loaning institution in an escrow account to pay tax and insurance bills, as they come due. 

Step 3: House Hunting Back to Top

Establish Your Criteria

Once you know how much money you can borrow and have an estimate of your closing costs, you'll know the price range you can afford. Buying a home though is more than finding the right property; it is also about finding the right location for you and your family. Select three or four neighborhoods you would like to live in. Consider items such as schools, recreational facilities, area expansion plans and safety. 

• Check out school districts by visiting the county web sites for Prince William County, Fairfax County or Fauquier County or visit Great Schools for comprehensive school profiles. 
• Make a list of the activities — movies, health club, church — you engage in regularly and stores you visit frequently. See how far you would have to travel from each neighborhood you are considering to engage in your most common activities. 
• Find out if the neighborhood is safe. Ask the police department for neighborhood crime statistics. Consider not only the number of crimes but also the type — burglaries, armed robberies — and the trend of increasing or decreasing crime. Also, is crime centered in only one part of the neighborhood, such as near a retail area? 
• See for yourself. Once you’ve narrowed your focus to two or three neighborhoods, go there and walk around. Are homes tidy and well maintained? Are the streets quiet? Pick a warm day if you can and chat with people about the neighborhood. 

Before we begin to go looking at houses, decide what you really need in a home (like the number of bedrooms, an eat-in kitchen or a finished basement) versus what you really want (like wood floors, bay windows, or specific appliances). To help clarify what is a need versus a want, fill out our “Buyer Questionnaire”.

Also, think long-term. Are you looking for a starter house with the idea of moving up in a few years or do you hope to stay in this home longer? This decision may dictate what type of home you’ll buy.

With this list as our guide, we should be able to find you a home which is a blend of your needs and wants.

 
House Hunting Tips

• Use our “Home Search Notes” to keep track of the homes we see (they will start to blur together). Also, take pictures inside and outside the home.
• Bring a spouse, family member, or friend. 
• Ask about the utility and maintenance costs. 
• Make sure the house fits into your budget—can you afford the renovations and maintenance that you'll need to do? 
• If there’s something you hate about a house, tell us! It helps as much, if not more, in narrowing down our home search if we know what you like as well as what you don’t. 
• If you like a neighborhood, talk to people who live there. They'll be the most knowledgeable about the area and may be your future neighbors.  
• Also, visit the neighborhood on different days of the week and at different times of the day in order to take in any traffic and/or noise issues. 
• Focus on the “bones” of each house rather than the decorations; walls can be painted and rugs can be replaced—try to concentrate on the other features of the house to see if it fits into what you want and need.
• Don't make a "spur-of-the-moment" decision.
• Be picky, but don’t be unrealistic. There is no perfect home.
  

Compare Homes

Before you make a decision, you should compare each home on your “possible” list  against your wants and needs, as well as comparing their total prices. 

• What are short-term and long-term costs associated with each house you're considering?
  • Are there Condo or HOA fees?
  • Is there any maintenance which needs to be done immediately?
  • Are there any major purchases which would need to be made quickly (furniture, appliances, flooring, etc.)
  • How do the taxes vary from each home? 
• What are the commuting costs? 
• Is one in a more desirable school district? Closer to daycare options? 
• How do the back yards measure up? Is there adequate room for your family activities? Is there a deck? Is the yard fenced? Are there mature trees? 
• How does the finished square footage compare? 
• What about neighborhood amenities, such as a pool, tennis courts or walking paths?

Step 4: From Offer To Contract Back to Top

Making An Offer

Once you've found the right home, you'll need to make an educated offer. Knowing a home's real value can help you make a fair offer. A home's value is determined by: 

• Home characteristics: About 80 percent of the value of a home is based on its location and size (the number of bedrooms and bathrooms as well as the total finished square footage). 
• Similar home prices: Determining the offer price is based on the current asking price, market conditions (whether it is a buyers or a sellers market) and, most importantly, what other comparable homes in the area have recently sold for. 

Besides the proposed purchase price, other items included in the offer are: 

• Concessions: This includes things you'd like the seller to help pay for, like closing costs. 
• Conveyances: This covers any personal property to be included in the sale, like the washer and dryer or the refrigerator. 
• Home inspection contingencies: These contingencies (including the home inspection, radon, and pests) protects you by allowing professional inspectors access to the home to determine its soundness. If problems are encountered, you can cancel the sale, negotiate with the owners to correct the problems, or fix the problems once the home becomes yours.
• Mortgage contingency: This contingency protects you by stating that the sale depends on a lender approving you for a specific mortgage, rate, and term. 
• Earnest money: Earnest money is a deposit you offer to show you're serious about purchasing the house. Earnest money is usually held in escrow and applied to your closing costs at settlement. If you fail to meet the terms of your contract, you may lose this deposit. 
• Acceptance: This covers how long the seller has to respond to your offer before the offer is no longer binding. 
• Closing date and location: The closing date (also called the settlement) can be several weeks to several months away to meet the seller's and your needs. 
• Possession date: This is the date you can move in. It's usually the closing day or very soon after it.
  

How An Offer Becomes A Contract

Once you've submitted your offer, the current owner of the property may: 

• Accept the offer with no changes. The offer then becomes a contract to purchase the home. 
• Reject the offer outright. Unless you make a second offer, the process for this particular home is done. 
• Make a counteroffer. The owner may counter any aspect of the offer — the price, the closing date or any of the contingencies. It is our job to negotiate on your behalf, with the end goal of obtaining the right house for you at the right price.  If all the parties agree to the changes, then a contract for you to purchase the sellers home now exists. 

Expect to feel a little buyer’s remorse which will most likely pass. Buying a home, especially for the first time, is a big commitment, but it also yields big benefits. Remember, if you are wondering if you could have purchased the house for less, the owners are probably wondering if they could have held out for more.

 

 Step 5: Fulfill Contractrual Obligations Back to Top

Home Inspections

Home Inspection: Hiring a professional home inspector can be one of the most important things you can do to make sure your home is in good condition. An independent authorized inspector can uncover defects with the house that could cost you a lot of money down the road. 

A home inspection is an evaluation of a home's condition by a trained expert. During a home inspection, a qualified inspector takes an in-depth and fair look at the property you plan to buy. The inspector will:

• Evaluate the physical condition: the structure, construction and mechanical systems;
• Find and list items that should be repaired or replaced; and
• Estimate the remaining useful life of major systems (such as electrical, plumbing, heating, air conditioning), equipment, structure and finishes 

The home inspector does not estimate the value of the house.

After the inspection is complete, you will receive a written report of the home inspector's findings. If the home inspector finds a serious problem, like the roof needing to be replaced, you'll know up front and can negotiate with the seller for the cost of the repair or replacement.

Radon Gas Testing: Radon is a natural radioactive gas found in some homes. Strong concentrations can cause serious health problems. The test takes two days to conduct. If high levels of radon are discovered, the system to correct this problem is an easy and relatively inexpensive one. 

Lead-Based Paint Testing: If you plan to purchase a home built before 1978, you may conduct a lead-based paint test.  

Pests: Your lender will require a certificate from a qualified inspector stating that the home is free from termites and other pests and pest damage. You may want to reserve the right to cancel the agreement or seek immediate treatment and repairs by the seller if pest damage is found. 

Well and Septic: If the home is on a well and/or septic system, the lender will require a certificate from a qualified inspector stating that the systems are in working order and that water into the home is free of certain bacteria. If either system is found defective or substandard, the seller is required by our regional contract to to take appropriate remedial action at the sellers expense.

The bottom line: Spending hundreds of dollars on
inspections may save thousands in the future!

 

Homeowners Insurance

Homeowner's insurance protects you and your mortgage lender from things that can go wrong in and around the home. Coverage types include: 

• Casualty: Covers most types of damage to the structure of your house like fire, wind, or hail.
• Liability: Insurance provides protection in case a visitor is injured in your home.
• Theft or damage to personal property: Covers things like your furniture, clothes, and appliances.
• Disaster Insurance: Most home insurance policies do not cover flooding or damage due to earthquake. Flood insurance can be purchased through your insurance agent or through the National Flood Insurance Program. 

Types of Homeowner's Insurance: There are four main types of insurance related to repairing structural damage: 

• Actual cash value—This insurance covers an amount equal to the replacement value of the damaged property, minus a depreciation allowance.
• Replacement cost—This insurance covers the cost of replacing damaged property without a depreciation deduction, but with a maximum dollar amount.
• Extended replacement cost—This insurance covers the cost of replacing your home up to a stated percent (usually 20-30%) over the amount insured.
• Guaranteed replacement cost—This type covers the cost of replacing damaged property without a depreciation deduction or a maximum dollar amount.  

Saving Money on Insurance: You can save money on your homeowner's insurance by doing your research. Shop around and compare different services and prices. Other ways to save some money include: 

• Increasing your deductible: The higher the deductible, the less expensive the insurance premium. But don't forget that, in the event of a loss, you'll have to pay the amount of your deductible before your insurance pays for any damages. Don't take a deductible that will be too much for you to pay in the event of a loss.
• Only insuring the value of the structure and its contents: While your home and its contents are at risk from fire, theft, etc., the land your home sits on is not.
• Being safe!: Install smoke detectors, security systems, deadbolts and other safety devices. Safety features can lower insurance rates.
• Quitting smoking: Some companies offer reduced rates for nonsmokers.
• Flaunting your age: If you're over 55, let the insurance company know. You can probably get discounts.
• Getting group coverage: Your college, credit union, or business associations may qualify you for special rebates.
• Staying with your insurance company: Some companies reward loyal clients with reduced premiums.

 
What Not To Overlook On A Final Walkthrough

Be sure that: 

• Repairs you’ve requested have been made. Obtain copies of paid bills and any related warranties. 
• All items that were included in the sale price—draperies, lighting fixtures—are still there. 
• Screens and storm windows are in place or stored. 
• All appliances are operating. 
• Intercom, doorbell, and alarm are operational. 
• Hot water heater is working. 
• HVAC is working. 
• No plants or shrubs have been removed from the yard. 
• Garage door and other remotes are available. 
• Instruction books and warranties on appliances and fixtures are there. 
• All personal items of the sellers and all debris have been removed. 
• No damage was done during the moving-out process.
  

Step 6: Closing/Settlement Back to Top

Closing Terminology

• Title: "Title" refers to the legal ownership of your new home.  The seller should provide title, free and clear of all claims by others against your new home. Claims by others against your new home are sometimes known as "liens" or "encumbrances." You may negotiate who will pay for the title search, which will tell you whether the title is "clear." 
• Title Insurance: Title insurance is an insurance policy that guarantees the property title (ownership) is free from the problems of hidden liens and claims. The title insurance company searches public records for the property to make sure there are no problems in the title's ownership and history. The fee for title insurance is usually included in the itemization of closing costs from the lender and is a one-time fee. 
• Settlement Agent: In Virginia, the buyer traditionally has the option to select the settlement agent. 
• Survey: Lenders or title insurance companies often require a survey to mark the boundaries of the property.  A survey is a drawing of the property showing the perimeter boundaries and marking the location of the house and other improvements. 
• Good Faith Estimate of Settlement Costs: Federal law requires that, when you apply for a loan, the lender or mortgage broker give you a Good Faith Estimate (GFE) of settlement service charges you will likely have to pay. Keep your Good Faith Estimate so you can compare it with the final settlement costs and ask the lender questions about any changes. 
• HUD-1 Settlement Statement: One business day before the settlement, you have the right to inspect the HUD-1 Settlement Statement.  This statement itemizes the services provided to you and the fees charged to you.  This form is filled out by the settlement agent who will conduct the settlement.  We will fax or e-mail the HUD-1 to you as soon as we receive it from the settlement agent and go over the form with you to ensure that all items are  recorded correctly. 
• Escrow Account Operation & Disclosures: Your lender may require you to establish an escrow account to insure that your taxes and insurance premiums are paid on time.  If so, you will probably have to pay an initial amount at the settlement to start the account and an additional amount with each month’s regular payment.  Your escrow account payments may include a “cushion” or an extra amount to ensure that the lender has enough money to make the payments when due. 
  

What Happens At Closing?

At closing you will sign lots of papers, mostly pertaining to the loan on your new home. Along with you at settlement are a closing agent, the sellers, their real estate agent and us. 

Before you go to closing, your lender is required to give you a "good faith estimate" of how much cash you'll have to supply at closing, and a list of documents you'll need at closing. If you don't get those items, be sure to call your lender BEFORE you go to closing. Never hesitate to ask questions. 

You'll have to provide your paid homeowner's insurance policy and a receipt showing you have paid the premium, or a binder (a formal statement and deposit payment receipt that shows you agree to purchase insurance). 

The closing agent will then list the money you owe the seller (remainder of down payment, prepaid taxes, etc.) and then the money the seller owes you (unpaid taxes and pre-paid rent, if applicable). You should also bring some extra funds with you to cover any costs that may come up.

Once you're sure you completely understand all the documentation, you'll sign the mortgage agreement, promising to repay the loan. If you don't make your payments, the lender can sell your property and apply the sale profit to the amount you owe and add expenses. If it sells for less than the loan amount, you will still be responsible to pay the rest that is owed on the loan. 

The seller will relinquish title to the home.

You'll pay the lender's agent all closing costs and, in turn, he or she will provide you with a settlement statement of all the items that you have paid. The deed and mortgage will then be recorded in the state Registry of Deeds, and you will be a homeowner!


What Are Closing Costs?

Closing costs are the various fees and charges you take on when you buy a home and obtain a mortgage. They also include various taxes and fees paid to the state and local government. Typical closing costs include: 

• Items payable in connection with the loan: These are the fees that lenders charge to process, approve and make the mortgage loan. They include a loan origination fee, discount points, appraisal fee, credit report fee, and inspection fees. 
• Items required by the lender to be paid in advance: These are certain items the lender may require to be pre-paid at settlement. They include items such as accrued (accumulated) interest, mortgage insurance premiums (MIP) and hazard insurance premiums. 
• Escrow account deposits: These are deposits by the borrower to set up an escrow account for paying taxes and/or insurance, or other items. The law does not allow a lender to collect more than a certain amount. 
• Title charges: Title charges may cover a variety of services performed by title companies and others. 
• Government recording and transfer charges: The borrower or the seller pays these fees, or divide them, depending upon the sale agreement. The buyer usually pays the fees for legally recording the new deed and mortgage. Property transfer taxes are set by state and/or local governments and can be very high. In some places these taxes are collected whenever property changes hands or a mortgage loan is made. There may also be charges for city, county and/or state tax stamps. 
• Additional settlement charges: These include items such as a property survey, termite inspection, lead based paint inspection, and radon testing.

Items To Bring To Settlement

In order to complete the closing process as quickly and effortlessly as possible, please bring with you: 

• Picture identification. 
• Certified funds in the amount of the difference between the final cost of the home less your new mortgage loan. This amount will be on the Settlement Statement you will receive a day or two before closing. 
• A checkbook, in case there are any last minute expenses. 
• Proof of homeowners insurance.

Step 7: Move and Get To Know Northern VirginiaBack to Top




Getting Situated

Moving to a new place can be an exciting adventure, but there is a lot of new information you need to have. The links below will answer many of your immediate questions as well as provide you with some background information about Prince William.

•  Local Government
Prince William County Government  - Newcomers Guide answers questions regarding taxes, voting, vehicle registration and recreation.
Manassas City Government
Manassas Park Government


•  Grade Schools
Prince  William County Public Schools
Private Schools in Prince William County


•  Colleges and Universities
Northern Virginia Community College - Woodbridge and Manassas Campuses
George Mason University - Prince William Campus
Strayer University - Woodbridge and Manassas Campuses
University of Northern Virginia - Manassas Campus


•  Childcare
Virginia Department of Social Services - List of licensed child day care providers within the county.


•  Transportation
Washington DC Metro - Rail and bus service throughout Washington DC and the inner suburbs.
Virginia Rail Express (VRE) -  Commuter Rail Service.
Potomac and Rappahannock Transportation Commission (PRTC) - Commuter bus service.
Slug Lines - Carpooling.


•  Parks and Recreation
Prince William Forest Park - National park with hiking and biking trails plus campgrounds and cabins.
Prince William Park Authority - Includes information on the counties parks, rec centers, golf courses, water parks and pools.
Leesylvania State Park - The ancestral home of the Lee family, the park offers hiking trails and boating in the Potomac River.
Occoquan Bay National Wildlife Refuge - Located in Woodbridge, this 644 acre park is home to diverse habitats and wildlife.
Manassas National Battlefield Park - Explore two great battles of the Civil War.
National Museum of the Marine Corps - Enjoy a guided tour through the history of the Marine Corps.
Prince William County Fair - Come and visit the largest county fair in the state of Virginia.


•  Arts & Entertainment
Hylton Performing Arts Center - Beautiful new arts house for featuring "everything from bluegrass to Beethoven."
Jiffy Lube Live - The hottest musical acts of yesterday and today play at this open air pavillion.
Prince William Symphony Orchestra - offers symphony orchestra concerts, ensemble performances and musical education.
Manassas Ballet Theatre - In addition to their public perfomances, the ballet company offers free perfomances to public school children.
Center for the Arts of Greater Manassas and Prince William County - sponsers theatrical productions, gallery exhibits and arts education for adults and children.
The Prince William Art Society - Provides a variety of educational art programs and fine art exhibits.
Harris Pavilion - Open are space in the heart of Old Town Manassas hosts concerts, dances and ice cream socials in the summer and becomes an ice skating rink in the winter.


•  Sports
Potomac Nationals - Minor league baseball team affiliated with the Washington Nationals.
Prince William County Sports Authority - Find county sponsored athletic fields and sports leagues.
Old Dominion Speedway & Dragstrip - There's racing of some sort almost every Friday and Saturday night from April-October.
Public Golf Courses - There are 11 golf courses throughout the county open for public play.


•  Shopping & Dining
Shopping opportunities extend from outlet malls such as Potomac Mills Mall to small unique shops found in Old Town Manassas or Historic Occoquan. Grocery stores include traditional stores such as Giant, Safeway, Shoppers, Harris Teeter, and Wegman's as well as many speciality and ethnic stores. Local Farmers Markets are also available. Restaurant options range from national chains to locally owned establishments.


•  Weather
Average Temperature and Rainfall


•  Hospitals
Potomac Hospital
Prince William Hospital


•  Demographics
Prince William County Demographics - Access the latest Demographic and Economic Newsletter complied by the Prince William County government.
US Census Bureau - Quick Facts sheet on people, business and geography.