Tips for Buyers in a TOUGH Housing Market!

Being a BUYER in a seller's market with a limited inventory of homes to choose from can be a very tough process and have you second guessing your decisions. I wrote this article that I hope addresses many of the concerns buyers have today. If have any questions or comments please reach out to me anytime, 7 days a week at 815-621-9888.

Objection 1:? ?I do not want to pay over the listed price for a home” ???This is a very reasonable reaction; however, did you know that every extra $1000 in Sales Price only equates to about $6 extra in monthly payment based on a 30 year-fixed rate loan (APR 7.25%). Offering an extra 5k to secure an accepted contract would only cost about $30 extra a month. You should always consult with your trusted Realtor on these decisions.

Objection 2: ??“The Mortgage Payment is a bit higher than what I wanted to spend.” ?Please remember that Refinancing may be an option in the future which can save you hundreds each month on your mortgage payment in the future. There are also loan programs that allow you to take a temporary lower interest rate while you wait for rates to come down. This can assist with a lower mortgage payment for 1-2 years in the beginning. Regardless, you should still make sure you are comfortable with any current or future payment.

Loan Example:? **A loan amount of $250,000, with an Interest Rate of 7.25% (APR 7.355%, 30-year term) would have a payment of around $1705 (principle and interest only) a month. A Refinance that brings the interest rate down to 4.25% (APR 4.327%, 30-year term) in the future would lower the payment to about $1230 (P & I only), saving you around $475 a month on that same home.

Objection 3: ?“Houses are selling for too much right now.”? While we cannot control the price of homes, please remember that the alternative of Renting is like paying a loan at 100% interest only and Rental costs are currently at an all-time high. Also, if you are in a scenario where you are selling a home first, you could be receiving a higher price on your property which would allow you to receive extra equity to be used as a down payment on your new home purchase.

Objection 4:?? No seller is going to accept my offer when I have a house to sell first.”? In a competitive seller’s market, it is true that sometimes having a home sale contingency can hurt your chances of receiving an accepted contract approval. It is NOT however, always a deal breaker. In cases where a home contingency can be damaging to your offer, Guild Mortgage has a program that can help with a bridge loan to assist with the down payment until your current home sells. This allows you to close on the new purchase and then prepare your current home to be sold. The program even sets money aside to make the mortgage payment on your current home for up to 6 months so you will not incur double mortgage payments. This allows a potential buyer to make an offer with NO HOME SALE CONTINGENCIES, possibly strengthening your purchase offer. Restrictions do apply on this program, ask for complete guidelines.

Objection 5:? ?“I need to save more money towards a down payment.”? This can be a major concern for many potential home buyers. Fortunately, Illinois is one of the most generous down payment assistance grant providers in the country. There are grants and other down payment assistance programs being offered that range from $6000 to $10,000 to help buyers with their down payment and closing cost requirements. Also, in cases where a buyer does not meet certain grant guidelines, Guild Mortgage offers lending programs that allow for no down payment. Restrictions do apply on this program, ask for complete guidelines.

Objection 6:?? “I am worried about my current credit scores or having my credit pulled.”? Credit score requirements for loan approval can range depending on the program and/or the lender. Guild Mortgage also offers a soft pull credit report option to make sure a borrower experiences no credit score devaluation because of having their credit pulled. A potential home buyer should always go through this pre-approval process a minimum of 3 -6 months prior to looking for homes so they can be aware of any potential problems and have time to fix any required credit items. Guild Mortgage also works with experienced credit repair specialists who can assist borrowers who may need some additional assistance in improving credit or fixing credit reporting errors. ?

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