Loan Options for Home Buyers in Today's Market

From someone who isn’t an expert in loan programs, we decided to ask the experts in an effort to find out about loan products that may be offered right now to help specific buyers in today's market. With a low housing inventory and tons of buyers ready to pull the trigger on a purchase, this creates quite the feeding frenzy when the right house hits the market. Often times these buyers end up in a multiple offer situation and you want to have a strong offer when that happens.

Many buyers think they have to sell their home in order to purchase their next house. But right now, with low inventory, many buyers are fear-stricken to listing their homes without having another house under contract. This cycle can create quite the paralysis. We're here to tell you, you have options!

First of all what does it mean when an offer is a contingent offer? It means that the buyer has made an offer conditional upon one or more things happening, and the closing won't take place until those things happen. Real estate contingencies can be based on a number of issues and factors, eg. selling your home in order to close sale on a new home.This is why, in today's market, if your offer is contingent and there are multiple offers, your offer likely won't be the strongest offer on the table. 

Some banks offer a "contingency relief loan" that allows a home buyer to purchase a home without being contingent, essentially making them more appealing in a multiple offer situation. There are many buyers that feel like they have no chance in today's market. These contingency relief loan products can be a great option for a lot of buyers who may be on the fence about buying or don’t feel they can even get a home under contract.

We spoke with Paul Knopf of InterLinc Mortgage Services who suggested several additional solutions. 

“I offer solutions to buyers based on their particular situation. The buyer could take a home equity line of credit against their current home for the down payment, temporarily borrow against their 401k, or borrow against stocks (if they have enough). These options also allow you to go into the new home with a conventional loan at the best rates. 

He suggests that the contingency relief loan products or “bridge” loans force you into a higher rate due to the circumstances, but those loan options do exist and are right for some buyers. As real estate agents, we’re here to help you any way we can. Lenders offer different loan packages and you can shop lenders to find the loan product and lender that’s best for you. We can refer you to the lenders with whom we work and think you’d be the best fit. 

There are many ways to get pre-approved without a contingency so that you’re able to write a strong offer on that perfect home that comes to market. Let’s chat about your situation today to quash any of your home-buying fears and help you find and purchase your dream home. 

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