Falls Church has the highest percentage rate of mortgage loans approved in Virginia, concludes New York financial technology firm, SmartAsset.
Almost three out of every four (74 percent) submitted loan applications in Falls Church are approved, compared to Virginia and national averages of about six of every ten loans (60 percent) okayed by mortgage lenders
Local lenders and real estate agents weighed in on the reasons for the Little City’s success and top ranking.
“Falls Church has very sophisticated buyers,” said Keith Brown from Intercoastal Mortgage who’s been making home loans here for more than 20 years. In Falls Church, Brown finds “a much higher qualified buyer than what you see in other areas.”
According to Brown, Falls Church buyers are often repeat buyers who have money to put down on a house, which is important to lenders. First time home buyers without as much cash for a down payment are more likely to go out to Prince William and Loudoun counties which have better affordability and larger inventories.
Amit Kaim, a lender for 16 years with George Mason Mortgage, agrees with Brown.
Kaim noted that some condominium buyers in Falls Church come from million dollar homes which they have sold to downsize and move to properties worth between $600,000 to $700,000. From the sale of their bigger houses, these buyers may carry lots of cash which make them more attractive to lenders.
Falls Church buyers often have dual incomes, high credit scores and lower debt to income ratios than other localities, which signals a “go” to lenders.
It’s also a matter of supply and demand.
When there are multiple offers, a seller can pick and choose the strongest buyer which will be more appealing to a lender.
Brown said multiple offers, which can be separated by only a few thousand dollars, are common in Falls Church and give sellers opportunities to be selective when choosing the best financially qualified buyer.
Conversely, sellers in Springfield face more competition with larger house inventories and often only one offer to consider. Buyers in those localities are pretty well qualified, but there is more fallout with loans simply because there are not as many buyers.
“Definitely, there’s a difference” and higher loan approvals in Falls Church, Arlington and McLean when comparing them to Prince William and Loudoun counties.
Like Brown, Kaim attributes the high approvals loans in Falls Church to the strength of buyers who want to live here for the strong schools and proximity to Washington, D.C. Government jobs make a difference in incomes and make them noticeably more attractive to lenders.
Neither Brown nor Kaim see much difference in loans approved in Fairfax or Arlington compared to Falls Church. (In its most recent analysis, SmartAsset says Arlington placed fifth in Virginia in percentage of loans approved at 70.98 percent and Alexandria, sixth at 70.84 percent).
Buyers in Arlington “are just as qualified as buyers in Falls Church,” Kaim said, although you see more tear-downs in Arlington. Lot sizes are small in both places with little wiggle room for expansion.
Louise Molton is the principal broker and owner of Re/Max West End in Falls Church who described reasons for the high number of approved loans in a written statement:
“First of all, Falls Church City is very small and it’s predominantly a neighborhood more than a city [which] attracts government and international families that are financially secure, and are coming here to work in good jobs in Washington DC.”
These buyers seek “a nice community and schools convenient to D.C. and nearby job hubs and Falls Church is perfectly located.” Northern Virginia is “a very competitive real estate market and lending marketplace.”
According to Molton, real estate agents do their homework to avoid problems that occur down the road, such as a loan falling through.
Cathy Poungmalai of Frankly Real Estate has never had a pre-approved loan for a Falls Church property rejected for a mortgage loan.
She’s been selling homes in Falls Church for 15 years and credits Falls Church’s “small town feel” where students are within walking distance to school as a main draw. Plus, the proximity to the Washington-Old Dominion Trail and other regional landmarks is an advantage to living here.
Most of Pougnmalai’s buyers are very well qualified, and to be sure, she has them answer a series of key questions designed to help determine their financial status which helps reduce mortgage fall-throughs.
Another local lender is Burke & Herbert Bank whose director of products, sales and marketing, Terry Cole, submitted a statement:
“As an active business in Falls Church we’re delighted to see reports that recognize the potential of the Falls Church community.”
B & H’s mortgage team constantly tends to local customers and its criteria for making mortgage loan decisions is well-designed to accommodate multiple markets. Unsurprisingly, the key factor in determining whether or not a candidate is worthy of being awarded a loan by B & H or any of the other institutions is based on the customer’s’ ability to repay the loan in full in a timely manner.
“Our advice to anyone with a goal of buying a home is to pay attention to your finances. Solid money management habits are essential to building a strong credit history which is an important factor in loan decisions.”