UPDATE 5/26/2023: It’s no surprise to me…this home went immediately pending. If you are considering buying a home, it is so important to be fully approved and perhaps better yet, consider using a program that allows you to present an extra competitive cash offer. PS: I can help you with that!
This weekend I stopped by the open house for this charming home offered at $799,500 in the Admiral District of West Seattle listed by Kim Mulligan of Engel & Volkers Seattle. This home’s kitchen and bathroom have been updated without losing the vintage feel of the home. The neighborhood is also lovely and is located near Hiawatha Park. I actually helped the sellers with the financing of this home when they purchased it a few years ago.
I prepared financing flyers for this home and thought I’d share them with you!
You can review the scenarios I provided by clicking this link – there is video/audio of me going over each option. Rates are from the close of market on Friday, May 19, 2023. Mortgage rates have been very volatile so please click here for current mortgage rates for your personal scenario.
I prepared options for 10% down payment and 20% down payment offering full price utilizing a 30 year fixed conventional mortgage. Pretty straightforward scenarios. A buyer could also opt for an FHA mortgage which has a minimum 3.5% down payment requirement or if they are a qualified Veteran, they could potentially do a VA mortgage with zero down payment. (The FHA and VA scenarios are not included in the link above. Please contact me if you’re interested in seeing those or any scenarios).
The third option is utilizing a seller paid 2-1 temporary buydown. The cost of the buydown is about $15,500 (this is the amount it costs to pay down the interest rate for the first two years and how much the home buyer saves from the payment difference). For this scenario, I increased the sales price by $15,500. The buyer’s real estate agent would also need to negotiate the seller paying for the temporary buydown. Should the buyer refinance before the temporary buydown is over, the remaining balance of the subsidy would be applied towards their principal balance of the mortgage. I do have 3-2-1 buydowns available; however, they cost a bit more.
The last scenario I included in link above is a scenario for a future refinance. This is based on refinancing at a rate in the mid-5% range which I’m basing on Fannie Mae’s current (May 2023) forecast for interest rates in the second half of 2024. I think it’s important for home buyers to remember that the interest rate today is not something they’re stuck with forever and that interest rates are predicted to come down. In my opinion, it’s more important to focus on finding a home as inventory is still very tight.
Another option you may want to consider to buy this home is to utilize a cash buyer program. A cash buyer program will allow a cash offer to be presented on your behalf. This makes your offer more competitive than other offers that are contingent upon financing. You then buy the home from the cash buyer program. This works very similar to having a rich Aunty who buys the home for you, then you pay her back with your own financing. And yes, I have a cash buyer program that I can offer you! In fact, as of the writing of this post, our cash buyer program is offering a 1-0 temporary interest rate buydown. This means that your interest rate will be 1 point lower for the first 12 months.
Last I heard, offers on this home are being reviewed tomorrow (Tuesday, May 23, 2023). If you’re interested, I’m happy to help you with reviewing possible options for you and of course, help you with your preapproval!
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