Mortgage Q&A | What You Need to Know in Today's Fast-Paced Market

In today's fast-paced real estate market, here are the answers to the questions most asked by our clients:
Question: What to expect from interest rates?
Answer: With the strength of the economy and the sharp decrease in new Covid 19 cases, there will be pressure on interest rates to increase. We are seeing rates move about ¼% higher than where we were at the start of February with an average of around 3%.
Question: What are "Equity-Rich" homes?
Answer: Equity-rich homes as used by FNMA are homes with 50% or more equity. FNMA estimates that 33% of all homes in the United States are equity rich. This means
Question: Why are homebuyers remaining positive?
Answer: Even with the competitiveness of today’s market, homebuyers remain extremely positive about buying -- even after haven to submit four or more offers in some cases to get one accepted. They understand the advantages and security that real estate provides for their savings over other investments including the stock market. They understand it is the most important part of their long-term retirement plan as well as the added benefits of owning versus renting.
Question: How can buyers make their offers stand out?
Answer: Cash is King of course but not everyone can offer all cash for a home. Other options to make your offer stand out include:
  1. Make an offer at or above the list price.
  2. Remove the appraisal contingency, or show a bank statement to prove you have the cash to pay over the appraisal after down payment and closing costs.
  3. Obtain full-approval so you are ready to close in under 30 days even if the seller wants a longer escrow.
  4. Allow shorter contingency removal times
  5. Have your real estate agent develop a relationship of trust with the listing agent if possible.
Question: Why sellers should list their homes now?
Answer: With interest rates inching up, this may be the high point of sales prices for a while. Most buyers look at their payment, not the sales price. Low interest rates keep the payment down and enabled buyers to pay more for a home and still have a lower monthly payment.
Question: Why must buyers be pre-approved?
Answer: With the low inventory and high demand, most sellers require a buyer to be pre-approved before they will even look at their offer. Pre-approvals must be backed up with documentation like bank statements so provide assurance that the buyer’s loan will not be rejected. Sellers are also asking for cross-approvals in many situations. This is why it is important for buyers to work with an experienced and trusted lender before they begin the home shopping process.
Question: What services does San Diego Funding/Great Pacific Funding provide?
Answer: As a Mortgage Banker and Direct Lender, we have access to aggressive loan programs and can often get you approved for loans where the big banks fall short. We have an experienced team of locally-based loan officers across Southern California who understand the market and the importance of educating borrowers on all available options. We are here to meet with you via phone, Zoom, or in-person!

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