Creatively Planning Your 2022 Home Purchase
It’s been a wild few years and the housing market has been anything but normal, so how can you better prepare yourself for your next home purchase?
During the first quarter of 2020, interest rates dropped to historic lows. Not only were homeowners able to save money by refinancing, homebuying became more affordable to those that otherwise might not have been able to buy. In many cases move-up buyers could now afford higher priced homes.
Interest rates remained low and the purchase market thrived well into 2021… until it couldn’t. With a lack of inventory leading to a seller’s market, many homebuyers became discouraged competing for each home. Buyers constantly got outbid, often times over the listing price, so many decided to wait for the spring market to try again. Many sellers became reluctant to list their home because they either had trouble finding a home to move to or the market didn’t allow for a home-to-sell contingency.
What can you do to combat some of these homebuying obstacles? Here are some creative ways to help purchase a home in 2022.
The United Home Loans Bridge Loan
Yes! We can bridge the gap between your home purchase and home sale by tapping into the equity of your home before it actually sells. The United Home Loans Bridge Loan works by taking out a second mortgage on the home you intend to sell in order to fund the down payment on the new purchase. Even if your home is listed, we can pull the equity. The bridge loan gets paid off once the home sells. Restrictions apply, so please contact me for the qualification requirements.
Low down payment jumbo financing
As of January 2022, any loan amount over $647,200 is considered a jumbo loan. Most jumbo lenders require a 20% down payment; however United Home Loans offers jumbo loans to qualified buyers up to $1,000,000 with as little as 5% down*. Give me a call for more details.
Buy non-contingent with low down payment & recasting
If you have savings or the ability to borrow your down payment from family, 401k, etc., you may consider buying a home non-contingent upon your home sale. Once you actually sell your home, you can use the proceeds from that sale to do a one-time large principal reduction on the new home loan. Most lenders will allow you to recast or “re-amortize” the loan one time so your new mortgage payment is calculated off of the reduced balance. It’s best to get pre-approved before making any offers since there are additional qualification requirements, but if you’re comfortable holding both homes until your sale, this could be an option for you.
There are many ways to creatively give you an edge to buying your next home. It’s important to speak with a seasoned loan professional that understands how to tailor a loan to your specific needs and to guide you thru your various options in an ever-evolving housing market.
Written By: Chris Ulrich – United Home Loans
NMLS# 215735
*Mortgage rates can and do change daily. Some products may not be available in all states. Jumbo program as of January 11, 2022 for a purchase/refinance of a primary residence with no cash out at closing. We assumed (unless otherwise noted) that: closing costs are paid out of pocket, this is your primary residence and is a single family home; debt-to-income ratio is less than 37% and credit score is 740 or higher. The lock period for your rate is 60 days.
The interest rate of 3.625% (3.789% APR) assumes an $800,000 mortgage, 5% down with monthly P&I payments of $3,685. Monthly payment does not include taxes and insurance premiums. The actual payment amount will be greater if you choose to escrow for taxes and insurance. Payment assumes a loan-to-value (LTV) of 95%.
