Home Loan Options
The housing market is “rebalancing,” and prices have started to stabilize and drop. Many experts say that the market is “shifting” from a seller’s to a buyer’s market. The days of multiple, above-asking-price offers within days of listing a property seem to be over. Inventory is sitting on the market longer, and buyers can now take their time to shop around and really find the right property. The difficulty is that inventory remains low, and buying power has decreased as interest rates have increased. The good news is that home loan rates have improved this past week, and some sellers are starting to realize that they either need to drop their prices or be willing to negotiate to get their properties under contract. Now could be an excellent time for buyers to consider taking advantage of this new market.
2-1 Buydown - A great option for buyers to consider is the 2-1 Buydown. With the rise in interest rates, using a temporary buydown, sometimes with a credit from the seller, allows the buyer more purchase power. Click on the link to learn more about the 2-1 Buydown.
Assumable Loan - Another loan option is the assumable loan. The assumable loan allows a buyer to "assume" or "take over" the existing loan for a seller. This option is great for sellers who want out from under a loan, and many of these loans have lower interest rates than the current rates. However, not all loans are assumable, and if there is a difference between the home's equity and the loan, the buyer would have to make up this difference, so there are pros and cons to this type of loan. Reach out to your lender to see if your loan qualifies for this or ask your real estate professional if this is an option on a home you would like to purchase.
VA Loan - Another great option is a VA loan for veterans. Home loans from the Department of Veterans Affairs are only available to veterans, active-duty military and reservists, and their spouses. Click on the link to learn more about VA loans.
What homebuyers can expect moving forward:
• Interest rates will continue to go up, impacting their buying power.
• More lending options will emerge as lenders try to regain the business they lost with higher interest rates.
• Prices will stabilize and drop, creating more opportunities to purchase.
• Buyers can take more time deciding what property to purchase instead of being rushed or pressured into purchasing.
• First-time homebuyers and younger buyers can get back into the game and not compete with investors and cash buyers all of the time, pushing them out of the market for several years.
What is the bottom line? Reach out to a knowledgeable, top-performing agent who knows the market and lending options. Rely on your agent's expertise to help navigate through this changing market. With the proper guidance, you can successfully navigate these shifts.