Pumpkin Spice & Mortgage Deadlines: Advantage of a Fall Market
By Corey Jordan, Buyer’s Agent (Boston’s Luxury Properties)
Now that the summer rush is over, it may be perfect timing for you to purchase your dream home! Regardless if you are looking for a condo or a home, prices (historically) moderate during the fall season. Although there may be less inventory available, you also may have less competition during the offer process.
Although Interest rates are historically low heading into 2020, there is no crystal ball we can look into and predict that will remain true in 2020. With that in mind, now is the time to get approved for a mortgage and buy a home! A couple of things to consider when getting into the market:
- The fall market is not as competitive as the Spring and Summer months.
Any properties that have been on the market through those seasons will have very motivated sellers at this point. Many of us with experience can share horror stories about buyers getting into bidding wars during the Spring and summer months.
The fall market will have less offers to contend with due to active buyers already under contract, or have already closed on homes.
- Most mortgage loans and lenders require some amount of cash as a down payment.
The amount you've set aside for this could determine the kind of mortgage you qualify for, i.e. impact how much you can afford to borrow for a home.
Most lenders prefer a down payment of 20% or higher to qualify for a conventional loan, but there are thousands of home buyer assistance programs in the United States that offer down payment help in the form of grants, low-interest or deferred loans, forgivable loans, and other programs. Help with closing costs may also available. However, you should be aware that with a smaller down payment, you’ll likely be required to pay for mortgage insurance, and your loan application will be subject to greater scrutiny.
- FHA Loans.
The Federal Housing Administration (FHA) offers 3.5% down payment mortgages through participating lenders. FHA loans are easier to qualify for and have slightly lower rates than conventional mortgages. New FHA loans are only available for primary residence occupancy. Also, the property must meet certain minimum standards at appraisal. If the home you are purchasing does not meet these standards and a seller will not agree to the required repairs, your only option is to pay for the required repairs at closing (to be held in escrow until the repairs are complete).