San Francisco Mortgage News

Seller-Paid Closing Costs In A Seller's Market Yes, It's Still PossibleFor first-time home buyers, closing costs are a major hurdle for home ownership. Coming up with a down payment and several thousand dollars for closing costs can be hard without home equity to tap. To help, buyers often ask sellers to cover all or some of these costs. In markets favoring buyers, this is a common habit, but when the market switches to favoring sellers it becomes harder. Sellers who know they may get multiple offers are less likely to say "yes" to this request. Yet even when the market favors sellers, buyers can still ask for this help. It all depends on how the offer is presented. Here's how to potentially make it look appealing, even with other offers on the table.

Buyers Need To Consider The Total Amount


Many sellers build negotiation room into their asking prices. This means they anticipate some offers coming in that are lower than their asking price. Buyers asking for closing costs can offer the full asking price or more than the asking price to make the offer more appealing. For example, if the buyer needs $2,000 in closing costs, and offers $2,000 more than the asking price, the seller won't stand to lose money and will find the offer more appealing. This, in effect, rolls the closing costs into the loan. On the flip side, if a buyer makes an offer well below the asking price, then also asks for closing costs, the seller is likely to say no.

Buyers Should Consider Other Components Of Their Offer


Sometimes the problem the buyer faces is a lack of cash to cover the closing costs, particularly when using a no- or low-down payment loan option. To make the offer more appealing, buyers should look at the rest of the offer's terms. For example, a buyer may ask for closing costs but overlook other contingencies, such as non-urgent repairs. This makes the offer appealing, because the seller's costs even out.

Buyers Can Offer To Close Quickly


 Another way to make seller-paid closing costs something a seller will accept is moving the closing date up. Most sellers want to sell quickly, so the faster the buyer can close, the better the offer may look. For buyers in a seller's market who need closing cost help, the key is to make all other aspects of the offer appealing. By doing so, these buyers may just get the closing cost help they need to move forward with their home purchase. One of the best things to do before entering into negotiation is to have your mortgage funding pre-approved.

Contact your trusted home loan professional to get started today.
Posted by JOANNE AHN on July 6th, 2018 10:44 AM
Top Tips To Get Mortgage Pre-Approval FastWhen buying a house in a market that favors sellers, buyers must be able to move quickly. Mortgage pre-approval is critical to this. Here are some tips buyers can use to get approved fast.

1. Estimate Purchase Costs

Buyers need to know what their target purchase price is. This could speed up the pre-approval process according to Realtor.com. If buyers have been saving for a down payment, they should also tell the lender the amount they plan to put down on the home. Again, this helps speed up the pre-approval process and ensures greater accuracy.

2. Check The Credit

 Lenders will check a buyer's credit score before offering mortgage pre-approval. Checking their own credit first and making improvements if needed could help buyers speed up the approval process. Buyers who have credit problems may want to reach out to their lender first to see what they can do to improve their credit situation. Lenders know what strong credit looks like and may help buyers make changes that improve the credit score quickly. Knowing credit ratings before asking for mortgage pre-approval also helps buyers know what to expect from their mortgage offer. The better the credit, the better the terms on the mortgage the bank offers.

3. Get The Paperwork Ready

 If the lender has to ask for a piece of paperwork after starting the approval process, a buyer will face delays. Organizing all paperwork and delivering it with the pre-approval application should help. Start with proof of income that will be used to qualify for the mortgage including 30 days of pay stubs and the previous two years of tax returns with W-2s or 1099s. Buyers should then gather two months of savings and checking account documents. Finally, anything connected to retirement, assets, or 401(k) funds needs to be included. If the buyer has any funds deposited that were from regular paychecks or do not show in the employment and payment records, they may need to have a written explanation.

4. Present Everything Clearly To The Lender

Buyers who bring everything they need to the lender in an organized fashion should get their pre-approval letters quickly. Sometimes lenders can deliver the letter the same day that they receive the information. That said, buyers with complications, like unusual employment structures or credit problems, may face delays. Most lenders are able to deliver an answer within a few days, even with complex applications. Mortgage pre-approval is a critical tool in the negotiation tool box for home buyers. Doing a little homework and preparation first can help buyers get approval fast, even in a competitive market. With approval, the chances of a successful offer increase significantly.

Your trusted mortgage professional is knowledgable and ready to help guide you through the pre-approval process.
Posted in:Mortgage and tagged: CreditMortgagePre-Approval
Posted by JOANNE AHN on July 6th, 2018 10:39 AM

Archives:

Categories:

My Favorite Blogs:

Sites That Link to This Blog: