We’ve been talking a lot about housing affordability lately, but I think it’s time we change the conversation.
Affordability isn’t just about how much money you’ve saved for a down payment or closing costs anymore. It’s about understanding the market, knowing which financing options are available and making the most of what you have.
And right now, buyers have some pretty interesting opportunities.
When the real estate market shifts in favor of buyers, the negotiating table starts looking more like a buffet. You can negotiate a lower purchase price, request seller concessions toward closing costs or ask the seller to help buy down your mortgage interest rate.
In one of my recent sales, we negotiated $25,000 off the purchase price PLUS another $10,000 in seller concessions. That’s $35,000 in negotiated value that made a meaningful difference for my buyers.
But negotiating is only half the equation. The right loan product can be just as powerful.
One financing option getting attention from my buyers is the 7/6 adjustable-rate mortgage, or ARM. And before you cringe, this isn’t your grandparents’ ARM!
A 7/6 ARM typically offers a fixed interest rate for the first seven years. After that, the rate can adjust every six months based on the loan’s index, margin and adjustment limits. During those first seven years, your principal and interest payments are predictable, much like a traditional fixed-rate mortgage.
Why consider it? Because the initial interest rate may be lower than a comparable 30-year fixed mortgage, potentially improving your monthly payment and purchasing power. If rates become more favorable down the road, refinancing into a conventional or FHA loan may be an option, although it’s never guaranteed. Buyers should always be comfortable with the possibility of future rate increases.
Now here’s something even more exciting for our mountain communities.
There is a special financing opportunity available for select homes right here on the mountain. More than 300 properties may qualify for a loan requiring just 3 percent down, with no private mortgage insurance (PMI), and an interest rate that can be lower than available FHA financing.
And no, we’re not talking about repossessions or fixer-uppers with repair lists a mile long.
We’re talking about qualifying properties priced from $250,000 up to $895,000, including homes in Arrowhead Woods!
Think about that. A low down payment, no monthly PMI and potentially better financing terms on homes you might have assumed were out of reach.
Of course, every loan has eligibility requirements and not every property or buyer will qualify. But these opportunities aren’t necessarily reserved for people with extraordinary circumstances.
The point is simple: Before you decide you can’t afford to buy, let’s find out what you actually can afford.
Reach out to me. Let’s look at the properties, the programs and the possibilities. You might be pleasantly surprised by how attainable homeownership on our mountain can be.
Theresa Grant is a real estate broker and columnist covering Lake Arrowhead, Crestline, Running Springs and the surrounding mountain communities. Reach her at (909) 442-1345, visit www.HomesInLakeArrowhead.com and follow her on social media, @TheresaGrantRealtor. Theresa is a Broker Associate with REAL Broker Technologies. DRE#01202881.
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