How Financing Can Effect Your Offer

If you are like most people, and you want to buy a house, you will need to secure a mortgage loan to finance the purchase of your new home.  But did you know that this step could also cost you the offer if you are not properly prepared?  Let's talk about financing and how it can affect your offer.

Since you will be depending on financing for the purchase of your home, the seller has the right to know exactly how you are going to go about doing this.  So you must make your financing details part of your offer.

Here are a few things you will need to spell out in your offer.  The more details you include the less chance there is for a misunderstanding later.  Additionally, this will help to solidify your offer as well.

1.  How much are you going to put as a down payment - you will need to include the amount of your down payment as part of your offer.  It is easier to get approved for financing when you make a larger down payment.  This will let the seller know that you will be more likely to get approved for your mortgage loan.

2.  Include a maximum acceptable interest rate as part of your offer - sometimes interest rates can suddenly rise and this means that you would have to pay a higher mortgage payment than you originally thought.  So it is vitally important that you include in your offer the maximum acceptable interest rate you will accept.  This would allow you to cancel your contract without penalty if the rates make a huge jump.

3.  What about the fees such as closing costs or any type of financing incentives - if you are going to ask the seller to pay part or all of the closing costs or you are asking for some other type of financial incentive, you will need to include this in your offer.  It is common for a buyer to ask the seller to provide this type of incentive to close the deal.  However, this will more than likely limit the amount that the seller is willing to negotiate on the price.

4.  Will you be asking for seller financing - another option for a buyer is to ask the seller to help facilitate a portion of the financing of their home.  This is called a "carry back" - this is a second mortgage for the buyer that enables them to combine their down payment along with the money that the seller will be financing for the buyer in order to put a larger down payment on the home.  This could possibly help the buyer to avoid having to pay for mortgage insurance.  This will  need to be included in your offer.  You will also need to let the first lender know this as well so they can underwrite your loan within their requirements.

5.  Are your going to be paying cash for the home - if you are going to be paying cash for your new home, you will definitely want to include this in your offer.  You will be required to show proof of funds however.  So make sure you have all of the funds before going this route.  If you don't have the funds now but you will at a later date, then you will need to give an estimated time until you will have the cash in hand.   Usually a bank statement will suffice for your proof of funds.

There are many ways that the financing of your loan can affect your offer.  It is a good idea to let the seller know whether you will be using a fixed rate mortgage or an adjustable rate mortgage.  Additionally, you should specify whether you will be obtaining conventional financing, a VA or an FHA loan.

Talk with your realtor about the best ways to write a winning offer.  Your realtor deals with buying and selling homes every day and will more than happy to guide you in the right direction.

I specialize in helping buyers and sellers invest in real estate in Loudoun County and Northern Virginia. 

I have over 25 years experience in the real estate industry.  As a Broker/Owner with Exit Realty Talbot and Company, I bring special tools and solutions that enable me to exceed the expectations of my clientele.  If you are considering listing your property in Loudoun County or the nearby areas, ask me about our latest internet marketing systems.  I would appreciate the opportunity to earn your business.  I am experienced in listing and selling short sales.  For information on the short sale process, please visit  www.LoudounShortSaleSolutions.com.

My past awards and designations include – 2003 President of the Dulles Association of Realtors, 2003 Dulles Area Assoc Realtor of the Year, Salesperson of the year 2000 Dulles Area Assoc of Realtors,  Top Producer awards from both the Dulles Area Association and the Northern Virginia Association of Realtors.  I am a member of the Top 5 in Real Estate Network.

I have lived in Loudoun County since 1979.  I am married with two grown children and two grandchildren.  My son in law is my business partner in real estate.  I love to jog in the mornings and spend time relaxing on my Trawler during the summer months.

Loudoun County and Northern Virginia Real Estate Sales and Solutions – Helena Talbot, Broker. I specialize in helping buyers and sellers invest in real estate in the Northern Virginia area to include Loudoun County and surrounding areas including Fairfax, Clarke, Fauquier, Prince William  Counties.  Our local neighborhoods include Leesburg, Ashburn, Sterling, Potomac Falls, Brambleton, Broadlands, Lansdowne, River Creek, Belmont Country Club, Beacon Hill, Shenstone, Waterford, Lovettsville, Purcellville, Hamilton, Round Hill and Bluemont.                        Cell 703.727.9885    Office 703.574.3800