It’s the perfect time to put an offer on a house using one of these loans
Buyers in the Greater Seattle Area face a friendlier market right now when it comes to securing home financing. Thanks to the real estate market’s current cooling state, the process is more flexible to more buyers — especially those using Veteran Affairs (VA) and Federal Housing Authority (FHA) loans. While these loans may pose a challenge, Team Petros is experienced in processing these types of loans and knowledgeable on how to present to sellers.
VA loans help veterans with financing a home with no money down, while FHAs are insured by the government and allow lower down payments and credit scores. Those are great terms for the buyer, but in a hot market, thanks to seller hesitation, these are considered more complicated compared to other types of loans. That’s when using VAs or FHAs becomes a complicated process with a lot more steps involved.
But for the first time in 4 years, Greater Seattle’s real estate market is a promising space for such buyers. The number of homes for sale in King County has increased 44% in the last year, which has lessened competition and made sellers more willing to consider loans with contingencies.
Here are 3 reasons why now is the time to buy if you’re using FHA or VA loans:
There’s little to no upfront cash needed
Conventional loans often require a down payment that’s 3 to 20 % of the total purchase, which may be out of reach for first-time home buyers and limits those with smaller budgets. Thanks to rising inventory, Seattle buyers need less money upfront, and should take advantage of the current cooldown with these lower down payments.
An FHA loan typically requires 3.5 % down which suits borrowers with credit score challenges or debt to income ratios. Fannie Mae even offers a 3 % down mortgage. A VA loan, meanwhile, requires 0 % down and is secured by the government. So long as the prospective buyer is an eligible veteran and meets the basic criteria for VA loans, this is an attractive option for many.
More flexibility makes for more confident buyers
FHA and VA loans are by nature more flexible than a conventional loan. For those with low credit scores, or a young credit history, FHAs are common because the required FICO score to buy is lower: a 580 minimum, typically, compared to 620 for a conventional loan. VA loan benefits make it possible to buy even for those with a history of bankruptcy or those who’ve had to foreclose on a previous property. And there’s no penalty for pre-payments, which could potentially save the buyer thousands in interest fees over the years.
For homebuyers, these factors not only make purchasing more realistic, they’re also something of a confidence boost. With less time spent worrying about getting approved or coming up with the money for a down payment, buyers spend more time searching for and asking questions about homes they actually want to live in.
Will home prices increase over time?
Since the housing market ebbs and flows, those looking to purchase a home need to do so with a more sensitive set of terms shouldn’t wait just because Seattle’s housing has cooled off. Change may be unpredictable, but with enough forward thinking, buying a house doesn’t have to be.
Explore an FHA, VA or low down Conventional loan. Contact us today.
Metatags: Seattle real estate, VA loans, FHA loans, Fannie Mae, homebuying, first-time homebuyers, seller hesitation, Homestreet loans