How the Increase in Area Median Income Empowers First-Time Home Buyers

In exciting news for high-cost areas, the area median income is set to increase in 2025, providing even more opportunities for first-time home buyers and those leveraging home loan programs with minimal down payments. Here’s how the changes will affect prospective buyers and what it means for the market.

Understanding the Changes

• The area median income for the Home Possible program, which is a 3% down payment initiative by Freddie Mac and Fannie Mae, will rise from $122,320 to $129,600 gross income annually.
• This increase allows buyers to qualify for more home, reduce interest rates, and make lower down payments of 3%, 5%, or 10%.

Benefits for First-Time Home Buyers

• First-time home buyer status is defined as not having owned a home in the last three years.
• The income cap for qualification is increasing from $183,400 to $194,400.
• This expansion means more individuals can qualify for better loan conditions, including lower loan-to-value price adjustments.

Calculating the Impact

• With the old income cap of $122,300: Monthly gross income is $10,191.
• Under new limits of $129,600: Monthly gross income is $10,800.
• Mortgage lenders typically permit using 50% of gross income for total debt; this example assumes a conservative 49%.
• Assume $1,000 for other debts, leaving more room in monthly calculations under new limits.

Loan Scenarios

• Old Scenario: With a 6.5% rate, loan amounts capped at approximately $631,984, with a purchase price of $671,446.
• New Scenario: Under new income limits, loan amounts elevate to $679,040 with a purchase price of $715,773, given 3% down at 6.5% interest.
• The difference is significant—$44,327 more purchasing power under new limits for only a 3% down payment.

High-Cost Area Adjustments

• Across the U.S., understanding whether you’re in a high-cost area is critical.
• Standard areas operate at 100% of area median income, high-cost regions at 120%, and for specific programs like Home Possible/Home Ready, it’s 80%.

A Boon for Realtors and Buyers Alike

• These changes, effective May 18th, mean more buyers will find options available to them, notably in metropolitan and high-demand areas.
• This provides an excellent opportunity for realtors in places like Fairfax, Arlington, and the broader DMV area.

Conclusion

This development is promising for real estate professionals and buyers, signifying expanded eligibility and more accessible homeownership. As the owner of First Meridian Mortgage, Kevin Recher is eager to assist you in navigating these changes. Feel free to reach out for more personalized advice.

Contact Information

For further assistance or questions about these changes, don’t hesitate to contact Kevin Recher at (703) 799-5626.

Here is a link to the Virginia, Maryland and DC county limits.

Th download a list of all counties 2025 AMI click here.  

Freddie Mac  page.

The Power of VA Home Loans: A Comprehensive Guide

As someone who has worked with countless veterans and active-duty members, I’ve always been an advocate for leveraging the benefits provided to those who have ser

ved our country. One of the most powerful resources available to eligible veterans, service members, and surviving spouses is the VA home loan. In this post, I’ll delve into why VA loans stand out among other types of loans, such as FHA and conventional loans, and how they can be advantageous for consumers, realtors, and lenders alike.

Understanding Eligibility and Benefits

First things first, let’s address eligibility. To qualify for a VA loan, you must be a veteran, an active-duty service member, or an eligible surviving spouse. Once you have this benefit, it does not expire. Whether you served 40 years ago or just returned to civilian life, as long as you don’t have an existing VA loan, you can apply for a new one.

Key Benefits:

1. Zero Down Payment: Unlike conventional loans, VA loans require no down payment, making it easier for veterans to purchase a home without the need to save a substantial amount of money.
2. No Mortgage Insurance (MI): VA loans do not require private mortgage insurance, which can save veterans hundreds of dollars each month.
3. Competitive Interest Rates: VA loans often come with lower interest rates compared to conventional loans, resulting in significant savings over the life of the loan.

How the VA Funding Fee Works

The VA guarantees 25% of the loan, which eliminates the need for MI. This guarantee is financed through the VA funding fee. For first-time use, the fee is 2.15% of the loan amount and increases slightly for subsequent uses. However, putting down 5% or 10% can reduce this fee. For veterans receiving VA disability benefits, this fee may be waived altogether.

Flexible Guidelines for a Smooth Process

VA loans offer more flexible income and credit guidelines compared to conventional loans, making it easier for veterans with lower credit scores to qualify. Additionally, the VA uses a residual income model, considering the money left over after expenses to ensure that veterans can comfortably afford their homes.

Addressing Common Misconceptions

Some real estate agents and buyers express concerns about VA appraisers. However, the VA’s Tidewater Initiative allows for additional comps to be submitted, which can challenge an initial low appraisal. These measures protect not only the veteran but also the sellers and buyers involved.

Conclusion: Why Choose a VA Loan?

In my career, I’ve never encountered a VA loan that was denied due to credit or income guidelines. The combination of no down payment, no MI, and competitive interest rates makes

the VA loan the best choice for those who have served. If you’re considering a VA loan or need help determining your eligibility, contact me, Kevin Retcher, at First Meridian Mortgage. I’m here to serve you just as you’ve served our nation, regardless of the state you’re in.

Let’s make the dream of homeownership a reality for our veterans.

Shopping 30 Lenders with One Loan Application: Your Ultimate Guide

Are you planning to buy a home or refinance in 2025? Navigating the mortgage market can be overwhelming, especially with so many lenders to choose from. But what if I told you there’s a hack to streamline this process? Through First Meridian Mortgage, you can shop 15 to 30 lenders using just one loan application and one credit pull. Let’s take you behind the curtains and show you how this works.

The Power of Mortgage Brokers

Mortgage brokers like us at First Meridian Mortgage are signed up with numerous lenders. We leverage advanced AI tools and loan sifting software to find the best rates tailored to your financial situation. Let me walk you through an example: Let’s say you want a conventional loan with 20% down, a 780 credit score, and a monthly income of $10,000 in the 22310 zip code. In just seconds, our system can pull quotes from 20 to 30 different lenders.

Understanding Lender Pricing

One of the things we do differently at First Meridian is keeping all lenders priced the same. This means we’re not incentivized to prioritize one lender over another for personal gain. Instead, we focus on finding the best interest rate and terms for you. For instance, some lenders might offer a credit back, while others might charge higher fees for the same deal, leading to substantial differences in cost.

The key takeaway is that not all lenders excel in every product category. That’s where the expertise of a mortgage broker comes in. We understand the nuances of lender offerings, speed, and services, ensuring we match you with the one that best meets your unique needs.

Protecting Your Information

Before you start shopping for a mortgage, there are a few crucial steps to safeguard your personal information. First, ensure you’re on the Do Not Call list and register for the opt-out prescreen with credit bureaus like Equifax, Experian, Inova, and TransUnion. This prevents your data from being sold as a “trigger lead” and bombarded with unsolicited offers after a credit pull.

First Meridian Mortgage Tools

At First Meridian, we’ve made the process even more accessible. Our website offers live rate quotes, appointment scheduling, and the ability to start a loan application at your convenience. You’ll also find our live interest rate quote tool, where you can check rates similar to what we see on our interfacing software, tailored to your information.

We provide a transparent, client-focused approach without pulling your credit until we’ve had an initial conversation. This ensures you remain in control of your data and the decision-making process.

Taking the Next Steps

Whether you’re purchasing or refinancing, the process of finding the right mortgage is simplified at First Meridian Mortgage. Our dedicated team is here to assist you at each step, ensuring you get the best possible deal without the hassle of shopping multiple lenders yourself.

For further information, or to start your home buying journey, feel free to contact me, Kevin Retcher, owner of First Meridian Mortgage. You can reach us via our website’s contact form or directly through our office and my personal line.

Conclusion

Choosing a mortgage doesn’t have to be daunting. With First Meridian Mortgage’s unique approach, you have the power to effectively compare and choose from a wide variety of lenders, all with just a single loan application. Sure to save time and secure the best terms, our services are designed to meet your needs seamlessly. I’m thrilled to guide you through this process, and as always, it’s my pleasure to serve you.

Contact
First Meridian Mortgage
Kevin Retcher
Phone: 703-799-5626 (Office) | 703-201-6138 (Cell)

To all the Marines, Semper Fi, and to everyone embarking on their home buying journey, let’s get started today!

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The Ultimate Guide to Buying a Home in 2025 This your your Home buying Playbook

Introduction

Buying a home is a monumental life decision that requires careful planning and a detailed understanding of what lies ahead. As the landscape of real estate continues to evolve, it’s critical to arm yourself with the knowledge and strategies necessary to navigate the process effectively. In this guide, we’ll break down the steps involved in purchasing a home, ensuring you’re well-prepared for the journey ahead.

Step 1: Prepare Your Finances

Before you dive into house hunting, your financial preparation should be as thorough as a Super Bowl pregame. Start by mapping out a detailed budget, considering all expenses over a couple of months. This will help you understand your disposable income and how a higher mortgage might impact your lifestyle. This analysis enables you to determine if you need to adjust your spending habits to accommodate a future mortgage payment.

Step 2: Safeguard Your Privacy

Protect yourself from unsolicited calls by registering at www.donotcall.gov. This action will prevent a flood of unwanted calls when your credit is pulled during the mortgage application process.

Step 3: Assemble Your Team

Research and interview potential loan officers and real estate agents meticulously. Recommendations from trusted friends or family members can be valuable, but always verify credentials and past performance. Utilize resources like Google, Yelp, Zillow, and social media to gauge their reputation. Once you narrow down your options, request different mortgage scenarios to compare offers comprehensively.

Step 4: Get Pre-Approved

After selecting your preferred loan officer, proceed with the pre-approval process. This involves providing your financial details and having your credit pulled. It’s important to ask for your three credit scores and ensure your application is thoroughly underwritten. This pre-approval step solidifies your buying capability in the eyes of sellers and is crucial before making any offers.

Step 5: Begin House Hunting

With your financial framework and team in place, start your search for the perfect home. Keep in mind your budget, even if you’re approved for more. Stay true to what aligns with your financial situation to prevent future strain.

Step 6: Make an Offer

Consult with your loan officer and agent before making an offer. Understand your negotiating power, especially if you qualify for an appraisal waiver. This waiver can provide a competitive edge, making your offer more appealing compared to others that require additional steps like an FHA or VA appraisal.

Step 7: Finalize the Contract

Once your offer is accepted, inform your loan officer immediately. They will handle the appraisal and title work. Your agent will manage contingencies, such as home inspections, while you continue scrutinizing your insurance options and any potential issues that may arise from previous claims on the property.

Step 8: Clear to Close

The ‘clear to close’ phase signals all is set for closing. This involves completing any outstanding documentation and finalizing negotiations on contingencies with the seller. Once everything is in order, your loan proceeds to the closing department.

Step 9: Closing Day and Beyond

On closing day, conduct a final walkthrough, verify all details, and make sure your utilities and legal documents are prepared. Closing can be a complex process, so double-check all instructions, especially concerning fund transfers to avoid potential scams.

Conclusion

With these steps, you’re equipped to manage the home buying process with confidence and clarity. Remember, communication with your assembled team is key to ensuring a smooth transaction. Celebrate your new home purchase and keep open lines of communication with your trusted advisors to aid with any post-purchase questions or concerns.

Congratulations on your new home! Enjoy the living space you have worked hard to achieve. If you need more guidance, don’t hesitate to reach out to your mortgage or real estate professionals.

Are you a prospective homeowner? Prepare yourself for the journey to your dream home by embracing the cornerstone of financial stability: budgeting. As Kevin Retcher of First Meridian Mortgage emphasizes, practice can transform you from a hopeful buyer into a confident homeowner. Let’s delve into how budgeting works its magic.

The Essence of Practice

In any field, practice is what separates the great from the good. Kevin draws an insightful parallel between mastering a craft and preparing for homeownership. The essence here is practicing financial responsibility before diving into the big commitment of buying a home.

A Legacy of Budgeting

Kevin recalls his father’s meticulous budgeting with fondness. While ledgers might have been the tool of choice in the past, modern times present us with more convenient methods. Resources like freddymac.com equip you with budgeting worksheets that simplify tracking your finances. These tools help you outline your monthly expenditures, laying a strong foundation for your financial discipline.

Budgeting for the First-Time Buyer

For new homebuyers, Kevin underscores starting a practice budget before even meeting a loan officer. Spending two or three months tracking your expenses can be incredibly revealing. Websites like freddymac.com offer accessible worksheets to facilitate this process. By comparing your anticipated mortgage payment to your current rent, you can simulate future financial conditions.

Build Your Financial Confidence

One practical strategy is using your budget to test your ability to save additional funds. Suppose your rent is $2,100, and you’re eyeing a mortgage of $3,000. Practice by saving the $900 difference each month. This method not only helps you adapt financially but also contributes to your savings for essential costs like the down payment and closing expenses.

Kevin advises doing this exercise both before and after meeting with a loan officer. This continuous financial practice sharpens your preparedness and supports your journey toward homeownership.

Your Path to Homeownership

Budgeting is not just about numbers; it’s about building habits. By ingraining the discipline of budgeting in the months leading up to, during, and after securing your loan, you pave your way to successfully owning your home. This guidance from Kevin Retcher is more than just a tip—it’s a transformative strategy.

As you embark on the rewarding path to owning your home, remember that budgeting is your ally. It’s a small step that promises a substantial impact on your financial readiness and peace of mind.

Find Freddie Macs Budget worksheet here.

When it comes to purchasing a million-dollar home in Northern Virginia, understanding the associated closing costs is crucial.

I’m here to simplify this complex topic. Let’s dive into a detailed explanation of typical closing costs and fees involved in such a transaction.

Understanding Closing Costs: A Line-by-Line Breakdown

Using the Good Faith Estimate format, we’ll break down the closing costs into several key categories. These categories include closing costs, prepaids, counting of the entire transaction, and the mortgage payment.

1. Loan Origination and Processing Fees: If there’s no origination fee required, it would typically show as zero. However, some lenders impose processing fees. Working with a mortgage broker may eliminate these, though I personally don’t charge a processing fee. Often, an underwriting fee ranging from $750 to $1,200 is standard.
2. Appraisal and Credit Report Fees: Appraisal fees range between $500 and $750 depending on factors like location. Similarly, credit report fees are rising, averaging between $110 and $150.
3. Tax Service and Flood Certification: These fees monitor your tax payments and identify if your property is in a flood zone. If your home moves into a flood zone, you’ll be required to purchase flood insurance.
4. Verification of Employment: Sometimes, obtaining employment verification comes with an added fee if your employer uses a third-party service such as the Work Number.
5. Settlement and Title Insurance Fees: Settlement fees in Northern Virginia can range between $495 and $1,200. Lenders’ title insurance is vital to protect against potential property liens.
6. Recordation and Tax Stamps: The recording of deeds and mortgages has associated fees. Additionally, state and city tax stamps add $1,586.50 and $47.50 respectively, determined by the state.
7. Owner’s Title Insurance Policy: While optional, this protects your interest in the property, countering potential claims against your ownership.

Total Cost Analysis

In Virginia, the closing costs for a million-dollar loan, assuming no down payment, amount to $16,182.52—approximately 1.6% of the purchase price.

Prepaids and Escrow

A crucial component is prepaids, which includes prepaid interest. It’s the only instance when interest is charged upfront, covering the period from purchase to month-end. Additionally, a one-year home insurance policy, estimated at $2,700, must be in place by closing. Starting an escrow account ensures timely tax and insurance payments.

Comprehensive Cost Overview

Combining all these factors, the closing costs and prepaids add up to $21,144, which equates to about 2.3% of the purchase price. Including the $100,000 down payment, you’ll need approximately $1,023,144 at closing.

Estimated Mortgage Payments

With a $900,000 loan at a 6.875% interest rate and a 780 credit score, expect a monthly principal and interest payment of $5,912. Adding insurance, taxes, and mortgage insurance, your total monthly obligation rounds up to $7,200.86.

Summary

Navigating the closing costs for a million-dollar home can seem daunting, but breaking them down into a line-by-line analysis helps demystify the process. It’s essential to have detailed conversations with your loan officer to ensure you’re comfortable with all aspects, from closing costs to monthly payments. For live mortgage rates click here.

How to Vet a loan officer

In today’s digital age, finding and verifying credible recommendations can be a challenging task, especially when it comes to something as significant as choosing a loan officer. Here, we explore how to ensure that the recommendations you receive are trustworthy and reliable.

Seek Detailed Recommendations

When someone recommends a loan officer, delve deeper by asking specific questions: Why do they recommend this individual? When was the last time they worked with them? What type of loan was involved, and what was their personal experience? It’s important to assess how smoothly the process went, the communication effectiveness, and any unexpected issues faced. Most importantly, ask them if they’d truly use this loan officer again and if they’d recommend them to their family.

Consistent Feedback and Profile Verification

Look for consistent feedback across various sources. If multiple people recommend the same individual, it adds credibility. Utilize platforms like Nextdoor, Facebook, Instagram, and YouTube to verify user profiles and ensure recommendations come from real locals. Remember, a recommendation loses credibility if the source is from distant locations.

Cross-Reference and Conflict of Interest

Cross-reference recommended loan officers on platforms like Yelp, Google, the Better Business Bureau, or NMLS to ensure they have no violations. Be wary of recommendations that appear overly promotional or incentives tied, like getting a kickback.

Consider Recency and Conduct Follow-Ups

Consider the recency of a recommendation—older ones might not reflect a current scenario. For example, if someone vouches for “Joe” from 20 years ago, verify if Joe is still active in the business. Once you have a shortlist, ask these loan officers for loan estimates. Provide them with a standard scenario to compare their responses. If any are hesitant to provide detailed estimates upfront, they might not be the right choice for you.

Engage the Community

Leverage the collective knowledge of your community. Ask around if others have had experiences with specific loan officers. Multiple positive experiences from different people could indicate a good reputation.

Conclusion

Being thorough and diligent in your search and verification process will help ensure you find a reliable loan officer who matches your needs. For those needing assistance with mortgages or refinancing, feel free to reach out to Kevin Retcher at First Meridian Mortgage. Serving Virginia, Maryland, D.C., and 32 other states, Kevin is dedicated to providing excellent service. Semper Fi to fellow Marines.

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Dear Veterans,

On behalf of First Meridian Mortgage and myself, Kevin Retcher, I want to express our deepest gratitude for your service and sacrifice to our great nation. As a fellow veteran and former Marine, I understand firsthand the challenges and sacrifices that come with serving our country.

Your unwavering commitment to protecting our freedoms and way of life is truly commendable. The courage, honor, and integrity you’ve demonstrated throughout your service continue to inspire us all. Your dedication reminds us of the values that make our nation strong and resilient.

At First Meridian Mortgage, we are committed to supporting our veterans in their civilian lives, especially when it comes to achieving the dream of homeownership. We recognize that your service has given you unique skills and experiences that make you valuable members of our community.

To all veterans, whether you served in times of war or peace, your contributions have not gone unnoticed. Your sacrifices have paved the way for the freedoms we enjoy today. We owe you a debt of gratitude that can never be fully repaid.

Thank you for your service, your bravery, and your continued dedication to our country. We are honored to serve you in return.

With utmost respect and appreciation,Kevin Retcher
Owner, First Meridian Mortgage