Helpful Articles

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  Navigating the Homebuying Seas of a Seller’s Market

  Set sail with the team, tools, and strategies you need!

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  You’ve found the home of your dreams. It’s perfect in every way. Twenty other homebuyers agree and are readying offers. Welcome to a seller’s market! From the outset, a competitive housing market can seem like a hurricane-ravaged ocean, with thrashing winds and extreme waves. However, with the right tools, timing, and team, the waters will calm and a path to your dream home will appear. Let’s explore how to best navigate those seas!

  Assemble your homebuying team.

  Before starting your homebuying journey, you need the right people by your side. Here are the key members of your crew and what each should do so you can move forward.

  • Loan officer. Your loan officer is a key partner who will help you finance your purchase and also supplies the most important tool in a seller’s market: the mortgage pre-approval letter. This document tells sellers that a lender has certified your financial circumstances and credit score for home loan authorization. More on this later!

  • • Real estate agent. The homebuying process – from loan application to the closing table – is best when there’s a smooth hand-off, making a multi-person team advantageous. After your pre-approval is ready, your agent becomes the captain of your ship as you go in search of a home. They must be responsive and ready, as windows to buy can close in the blink of an eye!
  • • Yourself. Research and an open mind can give you an early step up in a bidding war. Continue reading to find tools and strategies you can use to secure your home, but also consider alternatives to a bidding war. Expanding your home search to less-trendy neighborhoods or considering fixer-uppers may make your homebuying process a simpler one.

     

    Have the right tools to secure your new home.

  • With your team assembled, you’ll need the proper instruments to reach your destination. These mortgage devices will appeal to sellers and agents when you make an offer.

     

    • A pre-approval letter. With the competitiveness of today’s market, sellers and agents want to know your offer is reliable and the transaction will close. Many won’t bother with a buyer who isn’t pre-approved! A pre-approval letter from CrossCountry Mortgage (CCM) gives them confidence that your offer is ready to roll, will close quickly, and won’t fall through.

  • • A fully underwritten credit approval. CCM’s FastTrack process provides something even better than a pre-approval letter: a Seller Certificate that contains your approved loan amount and states that your credit has been approved by underwriting. While CCM cannot guarantee that a closing can occur within a specific timeframe (all closing timeframes may vary based on all involved parties’ level of participation at any stage of the loan process), FastTrack could allow you to close in as few as 10 days after a signed purchase agreement.
  • • A conventional home loan. Accompanied by a healthy down payment (20% or more), a conventional mortgage can also demonstrate you’re ready to make a serious offer on a seller’s home. But don’t let this discourage you if you’re using a low-down payment product! A pre-approval letter from CCM still shows sellers and agents you mean business.

     

    Prepare to bid using the right strategies.

  • With your team and tools set, your strategy may be the difference between landing at your destination or on a deserted island. In the likely situation of a bidding war, win with these moves!
  • • Set your limit and stick to it. In a bidding war, the question of “How much can I afford?” will pop up. The best approach is to set your maximum purchase limit, never waver from it, and only tell your agent the magic number. To save money and take emotion out of the process, use an escalation clause, which increases your original offer by set increments up to a max threshold as other bids come in.
  • • Make a big offer without contingencies. If you want your first bid to be a strong one, make an offer at or over the asking price. However, don’t include normal contingencies. For example, when you remove the appraisal contingency, you’re offering to pay the shortfall if the house appraises low and your loan only covers the appraised amount. Always consult your agent before removing contingencies!
  • • Get personal. A common tool in an intense bidding war is a personal letter to the sellers. Let them know they are leaving their house in good hands with you. Paint a picture of the home under your care, from family gatherings to summer gardens. This emotional touch could be just the thing to make your bid the front-runner!

     

    Finally, the most important thing you need is the right lender! That’s where your CMBA/CCM Preferred Mortgage Savings Plan comes into play. You’ll get homebuying advice and education from a knowledgeable mortgage expert, plus up to $2,198* in lender credits toward the fees on your next mortgage!

    Trust Sheena Schiffer and her team at CCM to be with you at every step of the home loan process. Get started today!

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  2 Questions to Ask When Refinancing a Mortgage.

  Building equity is one of the best parts about owning your own home. The option to refinance the loan on a home that has accumulated equity is a financial advantage that means different things to different people. For some homeowners, a substantial amount of equity feels like having a large savings account. Others see refinancing as a way to pay off some of their debts sooner. Read More

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  At the end of the day, the decision to refinance usually leads back to achieving your life goals. That's why it’s important to consider all of the available options so you can settle on the one that best suits your specific needs. I can give you all the information you need, and the answers to two questions will influence your final choice.

  Question 1: Cash-Out Refinance or a Home Equity Loan?

  One primary objective of cash-out refinancing is to siphon off hard-earned equity and apply it to things that improve your quality of life. Among the most common usages are home improvements.

  Homeowners who use the cash-out option for home upgrades treat equity like a bank or investment account they can draw from. After all, you put the money into the home, so why not put it to work? By refinancing and pulling a portion of the equity back in cash, you may be able to afford an amazing new bathroom, outdoor patio, or other home enhancements.

  A well-planned cash-out refinance can leave your monthly mortgage payments where they are or even bring them a tad lower. Your lifestyle can actually improve and monthly bills aren't negatively affected.

  Home equity loans can achieve quality of life goals as well, but they are likely to create an uptick in your monthly expenditures. The two common types are:

  • HELOC: A home equity line of credit offers homeowners a predetermined borrowing limit. These generally allow people to borrow against the credit line for 5-10 years. The repayment terms can run 10 years or longer. This is very similar to having a second mortgage.
  • Home Equity Loan: This standard type of loan sets repayment terms between 5-15 years in many cases. This is, in effect, a second mortgage.

  When deciding which of these options could be a good fit for your situation, consider your monthly revenue comfort level against the value of paying off your home. A cash-flush homeowner may opt for a HELOC or home equity loan with an eye on paying off the property. But quality of life improvements can also be possible by tapping into that home equity piggy bank and maintaining the monthly status quo.

  Question 2: Shorten the Loan or Lower the Payments?

  Many homeowners consider going the refinancing route when interest rates dip. Remember, the purpose of refinancing is not necessarily to get the lowest interest rate possible. The goal tends to be either shortening the life of the loan or lowering monthly payments to free up personal wealth.

  Equity can play a powerful role in changing the length of your mortgage from 30 years to 15 years, a move that can be timed to coincide with your retirement or other life factors. Even a slightly higher monthly payment can help achieve long-term goals.

  For individuals in need of funds immediately, a refi can quickly free up cash that could be used to tackle a variety of expenses: braces for the kids, a much-needed vacation, or even to help you pay off other debts you might have. You may have to extend the length of your loan a few years, but you can gain peace of mind knowing that today’s needs are being met.

  Refinancing can reduce your monthly payment initially, but that doesn’t always mean it will save you money in the long run, as total finance charges may be higher over the life of the loan.* Fees and interest rates also need to be considered when calculating if your new mortgage will save you money over the entire life of the loan. A licensed loan officer will be able to help you decide if refinancing is right for you. We’ll help you calculate at which point you will break even and begin to save.

  We’re Here to Help!

  Throughout the refinancing process, it’s important to remember that you will likely be balancing one aspect of your financial portfolio against another. This is not a bad thing, because the point of any refinancing strategy is to successfully identify and meet specific life goals, which owning a home helps you do. I can help you do those things as well, so start the conversation today and find out which refinancing option is right for you!

  *Refinancing may result in higher total finance charges over the life of the loan.