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Federal Deposit Insurance Corporation - FDIC-Insured - Backed by the full faith and credit of the U.S. Government
Graphic of sold home
Normally, spring and summer tend to be the busiest seasons for real estate transactions and capitalizing on trends during the slower winter months may prove fruitful for you. But, as we all know, winter 2020-2021 has not been normal! Here are some reasons why purchasing a home during a normal winter is actually a pretty good idea and some updates about the current environment.
Since there tend to be fewer buyers during winter months, prices may drop slightly compared to the peak of the spring season.
Even though there might be fewer homes on the market and less inventory to choose from, supply still exceeds demand causing prices to drop. Buyers can have an advantage over sellers in this case and negotiate a purchase for a little less. Fewer offers from buyers means sellers are more willing to reduce the list price to try to close as quickly as possible.
As homes are priced to sell in the winter, sellers are more willing to accept financed deals, so buyers aren’t in constant competition with all-cash offers or frustrating bidding wars.
Once the deal is closed, homebuyers can benefit from better priced moving services. Since there are fewer properties being sold in the winter and fewer families are changing homes, professional moving companies are likely to offer discounted rates to boost business. More flexible scheduling also means you’ll be in your home when you want, at a rate that doesn’t break the bank!
Low interest rates have kept HOMEBANK mortgage lenders extremely busy for the past 12 months and into the winter season.
“We are seeing very nice homes go on the market because owners wish to take advantage of low interest rates to build or move up to a bigger home,” says Loan Officer Mary Smith, who works in HOMEBANK’s Palmyra MO branch. “Inventory is readily available, so don’t expect prices to be lower.”
Of course, a buyer needs to have sufficient income for repayment of a loan, and banks can typically offer the best rates with a 10-20% down payment. Lower interest rates allow you to afford more home for your desired monthly payment. Just a 1% difference in interest rates can save a buyer $125/month on a $150,000 home.
“So, if someone has been thinking about buying a house, with rates at all-time lows, now IS the time,” says Smith.
If you’re a buyer looking to get into a new home quickly, winter may be the time to do it as loans and purchases tend to go through quicker during this time.
Sellers often agree to a fast closing time, especially if they are moving themselves and need to be out by a specific date. Pair that with the fact that mortgage brokers are slower in winter months and tend to have less backlog, and you’ll have a shorter wait time for closing on the property.
Once you reach an agreement on a price with the seller, you will still wait an average of 30 days to close your loan, as the bank must wait for outside companies to complete inspections (if ordered), an appraisal, and a title search on your new home before preparing the legal documents.
“Like us, these service providers have been swamped for months, and they provide critical services that protect the homebuyer. Neither the bank nor the homebuyer will benefit from rushed work from these companies,” says Loan Officer Becky Scheufele, who works in HOMEBANK’s Quincy IL branch.
“We focus on keeping our customer informed throughout the loan process, providing you the confidence you need to achieve your home buying goals,” she says.
As there are fewer listings and buyers in the market during the winter months, real estate agents can focus more of their attention on you during this time.
You might have more time to view a property as well instead of being rushed out because of another scheduled appointment. Winter months provide a view of the property in harsher weather conditions to put into perspective realistic upkeep and maintenance expectations, such as shoveling a long driveway.
Having more time in the house, especially in the winter, allows you to inspect parts of the house you may have overlooked in the more temperate season, like drafty windows or a leaky roof, which can be fixed by the seller before purchase or used for buyer negotiation power.
Coveted one-on-one personal attention from your broker or agent can be hard to come by throughout the busy spring and summer months, so winter may be a good opportunity to take your time, view a property more than once, and be confident about the purchase of your new home.
Realtors are as busy as ever! However, we are seeing fewer Open Houses due to COVID restrictions, thus providing more time for private showings. A private showing is always better than an open house. Take this time to ask your realtor detailed questions about a property and how it compares to another property you are considering. Realtors are very knowledgeable.
“HOMEBANK’s most popular home financing options are our 30-year and 15-year fixed-rate conventional loans with a 20% down payment,” says Loan Officer Ashley Gibson, who works in HOMEBANK’s Hannibal MO branch. “But if that is out of reach for a customer, we do have other, low and no down payment conventional and government-based options available. Each has its own set of rules and benefits, so work with your lender to see which program is best for your situation. Of course, you must pay closing costs.”
Homebuyers can benefit from an FHA (Federal Housing Administration) loan. The credit requirements aren’t quite as strict for those who may have had some credit difficulties in the past, and down payments can be as low as 3.5% down.
HOMEBANK also offers 100% financing (no down payment at all) using a USDA Rural Housing Loan. There are income-eligibility requirements, and of course, you must find a home in an eligible area to qualify for this type of loan.
Zero money down options are also available with VA (Veterans Administration) Loans for veterans and service members.
HOMEBANK also offers Home Equity Lines of Credit (HELOC), where current homeowners refinance their home for more than they owe and take a cash payment with the difference. Our lenders can also help with new construction and home improvement loans.
Contact HOMEBANK today or make an appointment to discuss your mortgage options. We provide personal banking and business banking solutions tailored to meet your needs.