I recently completed the financing for a first time home-buyer that required an FHA Loan with a 3.50% down payment. However, due to the lack of housing inventory in today’s market, the buyer needed to make an aggressive offer for it to be accepted by the seller.
When the appraisal was completed, the appraised value was below the purchase price and the seller was unwilling to negotiate a reduced price.This meant the buyer would be forced to pay cash at closing to make up the difference between the purchase price and the amount of their loan.
In addition, although I was competing against another “big bank” on the financing, we offered a lower interest rate on a 30-year fixed rate loan and a credit that covered over $7,500 in closing costs!
Ultimately the buyer was able to close escrow with only an additional 3.00% towards the down payment (on top of the 3.50% required for the loan). This is a perfect example of the benefits of an FHA Loan where the buyer may have limited cash for a down payment on their first home.
Working with a lender that understands the process of appealing for a higher value on an appraisal (if needed) is imperative. By offering low interest FHA Financing with a credit to cover closing costs, we helped a buyer with limited cash purchase a home, despite the challenges.
To learn how we can assist you secure your first home, contact:
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