Getting the right residential financing program
Posted on Saturday, June 18, 2016 at 4:03:01 PM
The residential financing market has become a bit more competitive in the past few years, driven by the progressive economic improvements seen across a range of industries and regions. With rates remaining extremely low and standards easing a bit, prospective homeowners have a much larger variety of options available to them today than they had about seven or eight years ago, as well as a relatively healthy residential real estate market to purchase through.
At the same time, many individuals have struggled to get the right loans, or even receive any type of financing at all. This includes millennials who are still struggling with student debt. In fact, CNBC reported that more than 70 percent of millennials believe that their student debt is indeed making it far less likely for them to purchase a home in the near term. Considering the fact that this generation now represents some of the most potential for home sales, something needs to give.
Much of the challenge will relate to the identification of the best possible financing program.
Overcoming common obstacles
Money Control recently published a blog post from Rajiv Raj regarding the most popular issues that home buyers will face when they are seeking out financing. For example, he stated that non-refundable processing fees can be somewhat large and potentially crippling to a home buyer who is on a budget, should the purchase fall through. That type of cost should be avoided if at all possible to ensure that simple processing does not hinder the chances of closing on a sale.
Raj pointed out that fixed and floating rates can be somewhat difficult to understand, but will play a major role in the final tally at the end of the loan term. As such, he suggested researching which would be best in accordance with the specific homeowner's finances to make the right decision. Working with a reliable, trustworthy lender can help homeowners land on the right option.
Work with a community bank
Larger financial institutions will not necessarily have the same type of applicable knowledge of the local market as community banks, nor will they be able to provide the best guidance. Prospective home buyers - especially those who are going through the gamut of residential financing for the first time - should strongly consider working with their community banks to decide on the right program for their needs.