Posted June 26, 2023 in Special Features

In today’s real estate market home buyers and home sellers are faced with a whole new set of decisions. Unlike the last several years where interest rates were at historical lows, now many home buyers and home sellers are on pause due to higher mortgage rates and inventory shortages. After the Boom of 2020 and 2021 rising interest rates have dampened the tidal wave of buyers who wanted to get out of their rental or adjust their home size to accommodate working from home. Today there are a variety of reasons why people want to change their housing situation, regardless of higher interest rates.

For the first-time home buyer the question seems to be, “Is now a good time to buy?” According to Leslie Girard at Evergreen Home Loans the answer is yes. “In my experience it’s always a good time to buy,” Leslie says. “Sure, rates are up but home prices have leveled off  and have even seen some minimal softening. Most importantly these buyers have a chance to not only have their offer accepted, but many sellers are negotiating on price and even paying costs in some cases.”

First time buyers face a double hurdle with higher interest rates and higher home prices. This new reality might be temporary, but it does offer a window of opportunity while other buyers have gone to the sideline. According to Dawn Bell at Evergreen Home Loans, “We are seeing increased interest from first time buyers using a popular down payment assistance program with the State of Washington.” Bell says that the FHFA has also been active in rolling out changes to lending that will benefit first-time buyers.

In any market there will always be demand for “move up” and “downsize” buyers. Family size can outgrow a home and result in the need for larger homes, while Boomers are looking to move into a smaller home that requires less maintenance. In most cases these sellers/buyers have a substantial equity position for their next purchase. The challenge in this market is how to buy a home before selling their current home. “Evergreen has some innovative products, one specifically, their StepUp program that helps these buyers make their next purchase and move without having to sell their home first.”

There are loans available to rehabilitate a home in need of repair or upgrades for homeowners who love their neighborhood, their neighbors, their yard, etc. Instead of buying another home in an unfamiliar neighborhood, a homeowner can expand and update the home they already live in. These loans take into consideration what the future value will be in calculating the loan to value for qualifying purposes.

“This is another dilemma for some, and that is where renovation home loans come into play,” Leslie says. “These loan products will pay off your current mortgage and allow you to add renovation and remodeling costs right off the loan. The costs are paid directly out of loan proceeds. This is a great turnkey way to add square footage, a second story, renovate and update or even add an ADU. There are loan programs available to help “bridge” the buyer into a new home. Leslie at Evergreen Home Loans says there are loan programs designed specifically for these scenarios.

Relocators are another group of buyers who are “making the move.” In this local market there are more people moving in rather than leaving. Working remotely has become so popular that buyers from other cities can make the choice to move away from their employers. “Over the last two years I have personally seen a surge in borrowers from California and Oregon who are shopping in our market,” Bell says.

Building a new home is another option. However, buying the land and building your dream home involves other pieces that home buyers need to be aware of, such as site improvements, well/water, sewer hookup/septic, excavation, permits, etc. “Depending on the project, the list can grow,” Leslie said. “Closing costs will definitely be higher, to pay for all the moving parts. You’ll want to talk to a lender that has experience in construction loans to make sure you are realistic with budget and timelines”

Working with an experienced loan officer can make the process of financing exciting and rewarding. An experienced loan officer can help with understanding financing options and guidance through the loan application process for a smoother and less stressful experience. One advantage of working with an experienced loan officer is the ability to explore a variety of financing options since every situation is unique. Another advantage is the personalized attention and expertise throughout the loan process.