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Appraisals – Gaps, Strategies, & What if it comes in Low?

Navigating the homebuying process can often feel like a complex puzzle, especially when it comes to understanding the role of mortgage appraisals. At the heart of it, mortgage appraisals serve a critical function—they ensure that buyers are paying a fair market value for their new home. In unique markets, appraisals can become a compelling part of any offer, adding a layer of assurance for both the buyer and seller. However, this assurance often brings about a pivotal question: how can one make their offer stand out in a competitive market? That's where I come in, armed with strategies and a creative approach to financing that can navigate through even the most challenging situations.1. Handling Low AppraisalsImagine your offer on a dream home is accepted, but the appraisal comes in $50,000 lower than the agreed purchase price. Such a situation can raise concerns for both listing agents and sellers, potentially derailing the closing process. Through a carefully crafted approach, I demonstrate how to keep the transaction on track, ensuring that everyone proceeds to closing without unnecessary stress. A video example in the sidebar shows a real-life scenario where a low appraisal didn't stop the sale, thanks to strategic problem-solving and negotiation.2. Waiving Your AppraisalThe decision to waive an appraisal is significant and can make your offer more appealing to sellers in a competitive market. However, it's crucial to understand the implications of this choice. In the accompanying video, I explore how waiving your appraisal can impact your deal, offering insights on protecting your interests and maintaining your expected monthly payment. This strategy is particularly useful for buyers who can afford to take a calculated risk but still want to ensure financial stability.3. Strategies for Buyers with 10% DownMany buyers believe that putting down less than 20% limits their options, especially in terms of competitive offers and financing. However, I introduce a distinctive strategy that boosts confidence among buyers only able to put 10% down. By choosing a lender who thinks outside the box—like me—you might find yourself looking at a mere $12,000 difference rather than a deal-breaker. The sidebar features a video that walks you through how this approach works, setting it apart from conventional lender strategies.My Commitment to YouI thrive on finding solutions that not only meet the needs of all parties involved but also pave the way to a smooth and successful closing. Taking the time to explore and implement creative financing options is more than just a job to me—it's a passion. My goal is to keep you informed, confident, and excited about your home purchase, from the initial offer to the moment you receive your keys.Curious about how these strategies can work for you? Looking for a personalized solution that aligns with your unique situation? Click the link to the side to schedule a call with me. Let's make your homebuying journey a memorable and rewarding experience, together.*Available for Conventional Loans Only with 10%+ Down Payment.*

Your Guide to Rate Buydowns

Navigating the current real estate market as a buyer? You might have stumbled upon the term "rate buydown." If you're wondering what it's all about, you're not alone! Many folks find themselves puzzled over how rate buydowns function, which type to go for, and how it could be a game-changer for you and your loved ones.What is a buydown?:Imagine securing a deal on your mortgage where you pay less interest initially - that's a buydown for you. It's a strategy aimed at snagging a lower interest rate for the first chunk of your mortgage term, or perhaps for its entirety.The 2-1 Buydown Breakdown:Opting for a 2-1 buydown means you'll be paying less for the first two years. Each year, your interest rate ticks up by 1%, until the third year rolls around, when you start paying the full interest rate. The early years' savings are essentially subsidized by the seller to the lender.Weighing Buydowns: The Pros and ConsDeciding on a buydown isn't one-size-fits-all. It depends on your loan size, the starting rate, potential interest savings, and your future income outlook. How long you plan to stay in the property also plays a role.Resources:Check out the example videos in the sidebar to see real-life scenarios demonstrating how a buydown could work to your advantage. These quick guides will give you a clear understanding of the benefits and how they might apply to your situation. Don’t miss out on these valuable insights!

Which Should You Be Focusing On – Sales Price or Interest Rate?

The landscape of the real estate market is evolving, particularly with rising interest rates, but this change brings with it some advantageous opportunities for prospective home buyers. An important aspect of this new market environment is the range of choices buyers now have in their real estate dealings. The question arises: Should a buyer prioritize the sales price, or is the interest rate the more critical factor?With this in mind, I've created a video aimed at both buyers and sellers to encourage a reevaluation of common strategies for buying or selling property. Interestingly, you'll discover that the outcomes of these strategies, particularly in the context of financed purchases, may be quite different from what you initially expected.Seller Buy Down - A Strategic Advantage:This market shift opens the door for buyers to make strategic offers that significantly enhance affordability. My focus is on the "Seller Buy Down" approach—a powerful tool in my arsenal to assist you. This strategy involves structuring financing in a way that lowers the interest rate, thereby reducing monthly payments and making homeownership more accessible. However, it's crucial that this strategy is executed correctly, both in the purchase contract and within the banking arrangements, to avoid falling foul of predatory lending and high-cost loan regulations. This is where my expertise becomes invaluable.By leveraging a Seller Buy Down, we can navigate these regulations effectively, ensuring a smooth and beneficial transaction for all parties involved.

Price Drops vs Rate Drops – The Strategic Approach

In recent times, rising interest rates have been a significant hurdle for prospective homebuyers, affecting their ability to qualify for mortgages. This situation has also led to a trend where sellers are reducing their listing prices to make homes more affordable. However, many sellers lack the understanding or means to demonstrate just how much more impactful lowering interest rates can be for a buyer's monthly payments compared to just reducing the sale price.Price vs. Rate Comparison:I aim to illustrate with a direct comparison how a decrease in the sale price influences a buyer's monthly mortgage payments and their qualification criteria. More importantly, I'll show how using the same financial figures to lower the mortgage rate can have a far greater positive effect on affordability for the buyer.Seller Buy Down - A Strategic Approach:Opting for a seller buy down, which involves reducing the buyer's mortgage rate instead of the listing price, offers several advantages:Triple Savings: By applying the same funds that would have gone to a price reduction towards lowering the interest rate, a seller can triple the savings on the buyer's monthly payments.Efficient Use of Funds: Instead of a full price drop, a seller can use just one-third of that amount to decrease the buyer's rate, achieving similar financial benefits for the buyer while retaining two-thirds of the potential price reduction.Market Stability: Utilizing a seller buy down for full-price offers helps protect property values within the community, ensuring stable comparables for future transactions.Addressing Affordability: With limited resources, implementing a seller buy down is a more cost-effective strategy than broad price reductions to combat the affordability crisis facing many buyers.Marketing Your Property with Innovation:Understanding the significant benefits of reducing rates over prices can transform how we approach property sales. To leverage this, I propose creating a custom Seller Buy Down (SBD) Video for your property. This innovative marketing tool will not only highlight the affordability of your property but also educate and attract a wider pool of potential buyers, contributing to the broader effort of making homes more accessible in today's challenging market.

Success Stories – How A $13,000 Seller Credit saved $250/month

I'm excited to share a story of triumph in the world of home buying, which shines a positive light on the concept of Seller Credits, often viewed negatively in today's market.Consider the case of this first-time homebuyer who, despite having a solid job for over 15 years and seasoned assets, faced challenges with a fair credit rating. This rating was pushing their mortgage rate up, resulting in monthly payments that exceeded their budget. Instead of compromising on their dream home by reducing the purchase price, we took a strategic approach. By negotiating a Seller Credit of $13,000—a practice allowed up to 6% of the sale price under FHA guidelines—we managed to lower their interest rate. This adjustment led to a substantial saving of nearly $250 on their monthly payment.This story underscores the importance of education in navigating the home buying process, demonstrating how understanding and leveraging available resources can lead to successful outcomes.

How To Counter “Low Ball Offers”

As a seller or real estate agent in the current market, it's important to be ready for low offers from buyers. It's essential to understand why buyers might make these offers. The main reason is often affordability, which is particularly challenging right now due to increased interest rates. So, when you receive a low offer, remember it's not personal. It's about what the buyer can afford. You can help them afford your home without significantly reducing your price.Focus on the monthly payment. A buyer's aim is usually to get the lowest possible monthly payment for the mortgage they're qualified for. I've created some videos that explain the Seller Buy Down strategy. This is a method I use to help agents and sellers work with buyers to reach a monthly payment they can afford. This approach can be more cost-effective than simply accepting a much lower offer.

Success Stories – How A $20,000 Seller Credit created +$40,000 in Buying Power

This is a great example of how helpful a Seller Credit can be.I had clients who were moving from another state. They could only use one income to apply for a loan, which limited their options even though they had a large down payment. To keep their debt-to-income ratio within acceptable limits, they could only afford a monthly payment of about $2,096. In the area they were looking at, homes were priced around $350,000, but they weren’t finding any homes they really liked.That’s where I stepped in. Instead of choosing a temporary or 2/1 buydown, which wouldn't affect their debt-to-income ratio, I suggested a permanent seller buydown. I arranged for a $20,000 seller credit. This credit helped to lower their interest rate to 5.125%. With this new rate, a $2,096 payment allowed them to look at homes priced up to $415,000. Thanks to this, they found their dream home, made an offer, and, because they had strong credit and a good down payment, they got even more good news.They were granted an appraisal waiver, which meant they didn't need a property appraisal. On top of that, we managed to close the deal in just two weeks. This story shows how beneficial a Seller Credit can be in the home buying process.

Success Stories – Why Credit Matters – Rescore

As a first-time homebuyer, understanding your credit score is crucial, and here's a real-life example of how an expert's help makes a huge difference:The Challenge: A couple was ready to buy their first home. They had a credit score of 676, which was decent, but not optimal. This score was affecting the interest rate they could get on their mortgage – a higher rate meaning higher monthly payments.The Solution: Working with an expert (like me), we carefully reviewed their credit situation. We identified an opportunity to boost their score significantly. By strategically paying down $3,000 on one of their balances, their credit score soared to 755!The Result: This credit score jump lowered their interest rate by 0.5%. This might sound small, but it translated to saving over $175 per month on their mortgage payments. That's a saving of more than $2,000 per year!The Bottom Line: Every credit point counts when you're buying a home. It's not just about getting approved for a loan; it's about getting the best terms possible. I make it a point to discuss and strategize credit with every client, ensuring you don't just find a house, but also secure the best financial deal for your dream home.

Loan Level Pricing Adjustments (LLPAs) 2023 Update

Fannie Mae & Freddie Mac have recently introduced Loan Level Pricing Adjustments. That announcement can be found here: https://singlefamily.fanniemae.com/media/33241/display You may be wondering:-What are Loan Level Pricing Adjustments?-Who do they effect?-How can I inform my Buyers & Sellers based on the recent announcement?-HomeReady & HomePossible Programs plus 100% AMIPlease find an interactive Loom video presentation above as well as PDF One Page Resource guide in the sidebar. You can explore the Area Median Income Guidelines by address for Fannie Mae & Freddie Mac's HomeReady & HomePossible programs below.Fannie Mae HomeReady -https://ami-lookup-tool.fanniemae.com/amilookuptool/Freddie Mac HomePossible -https://sf.freddiemac.com/working-with-us/affordable-lending/home-possible-eligibility-map

Reviews

"Shelby and Lois provided timely and great communication. Shelby’s knowledge allowed me to get a great rate for these times. I always felt like a person and not just an anonymous client."

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"Creative and non stop until the job was done. My wife and I both agree we felt that Shelby went above and beyond to get us the approval and rate we needed. She even went as far as to work on a Saturday close to our closing date to make sure everything was perfect. I am excited to refer others to her in the future. Thank you, Shelby!!"

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