4 Ways Of Using Financing When Buying A House

By Richard Brody  |   Submitted On March 09, 2018

  

Especially, in sellers markets, there is often, considerable competition, in terms of purchasing, a house. The better a homeowner understands, what each means, and represents, the more capable he is, of determining, which might (or might not) be, in his personal, best interests! Qualified, potential buyers, must realize, some of these options, and determine, which makes the most sense, to each of them, and their self - interest! With that in mind, this article will attempt to review and consider, briefly, 4 different approaches, and some of the pros and cons, both for the buyer, as well as the seller.

1. Truly, all - cash: In my, over a decade, as a Real Estate Licensed Salesperson, I have observed, a few individuals, make, true, cash offers, while most of these, simply meant, no mortgage - contingency! When someone is purchasing, without using any form of financing, the homeowner must demand, proof of funds, in order to be certain, the buyer is qualified, and capable of having sufficient funds. The buyer, proceeding this way, should consider, whether it makes sense, for him, because mortgage interest, up to certain limitations, is still, tax - deductible, and, when one pays, with cash, they may be ignoring the opportunity - cost, of monies!

2. No mortgage contingency: When one has good credit, and knows he will qualify for a mortgage, and maintains, the right to inspect, etc, he might proceed, this way, in order to make his offer, more attractive to the seller. However, the homeowner must be certain, the house will pass inspection, or an engineering report, and the offering price, is directly relevant, to the Competitive Market Analysis (and will Comp - out).

3. Conventional mortgage: A Conventional Mortgage is, usually, considered, one, which falls, within certain dollar limitations, and the down - payment, will be, at least 20%. In addition, the purchaser's credit, and qualifications, must adequately qualify him, for the desired mortgage. Homeowners must demand a qualified, Mortgage Approval, with the offer, rather than merely a Mortgage Qualification (the difference is, the approval means, the person qualifies, as long as the residence does, while a qualification, states, if the process relates to what the prospective individual claims, he will qualify). Obviously, an approval is what an owner should desire!

4. Other financing: Some individuals make offers, based on other financing, including Balloon Mortgages, combinations of loans, and less/ lower down - payments. Obviously, this is a riskier deal!

Since financing is generally an essential component, to buying and selling a house, the more each party knows, understands, and properly prepares, the better! Will you be prepared for the process?

Richard has owned businesses, been a COO, CEO, Director of Development, consultant, professionally run events, consulted to thousands, conducted personal development seminars, for 4 decades, and a RE Licensed Salesperson, for a decade+. Rich has written three books and thousands of articles. Website: http://PortWashingtonLongIslandHouses.com and LIKE the Facebook page for real estate: http://facebook.com/PortWashRE

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