Buying a home today is not an easy task. Until mortgage rates are good and competitive, there is a serious shortage of property listings, making it difficult to navigate today’s housing market. Not only are shoppers forced to compromise on home features, they are also forced to pay more to find their own space.
As a general economic rule, when a product is in short supply and demand is high, its price tends to rise. This is the case in the housing market today. Home prices have skyrocketed nationally, making it harder for buyers to qualify for fairly high prices. mortgage make ownership of property possible.
But these are not the only challenges shoppers face today. Some buyers may find it harder to get their offers accepted – not because they are not high enough, but because sellers are unhappy type of mortgage these offers are tied to.
Start your path to financial success with a bang
Get free access to select products we use to help us meet our financial goals. These fully proven options can be the solution to help boost your credit score, invest more profitably, create an emergency fund, and more.
By submitting your email address, you agree that we will send you monetary advice along with products and services that we believe may be of interest to you. You can unsubscribe at any time. Please read our Privacy statement as well as Terms and Conditions…
Sellers reject FHA and VA loans
FHA loans allow buyers to purchase a home just 3.5% less, while conventional mortgages usually require a higher down payment. Some ordinary mortgage lenders will cost only 5%, but often buyers will need to shell out at least 10%. VA loans, meanwhile, allow buyers to buy a home with no money at all.
Both FHA and VA loans have been around for many years and are backed by firm guarantees from the Federal Housing Administration and the Veterans Administration, respectively. However, according to a recent poll by the National Association of Realtors, only 30% of sellers said they were likely to accept an offer from a buyer who plans to use an FHA or VA loan. In contrast, 89% of sellers are more likely to accept an offer from a buyer with a regular mortgage.
This opinion can put low-income buyers at a disadvantage. It could also close buying opportunities for a wide range of potential homeowners, including those who may not necessarily be in the lower end of the income spectrum, but rather US military personnel or veterans looking to take advantage of the VA loan program. …
Why are sellers giving up on these loans? Urban Institute data show that sellers associate these loan products with stricter home inspection requirements and home appraisal contingencies. Sure, home appraisal are a requirement for any mortgage. But for FHA and VA loans, sellers must lower the purchase prices of their homes to match their assessed values, so it’s easy to see why some may be less than willing to work with buyers who come up with these types of financing.
Since this is a seller’s market, those who list their properties for sale can afford to be more choosy than usual. But this can hurt many buyers and make it harder for them to enjoy the benefits of home ownership.