With rates going up, how to land the best loan

Moscow Idaho real estate Financial Graph, up

While a few fed rate hikes in recent months has pulled home loan rates up a bit, rates sitting around 4.25 is still fairly low in the larger picture, but that does not mean stay on the sidelines in this sellers market.

Below are a few pointers on ways to capture the best loan– lowest rate possible, lowest down payment, help with down payment or closing costs– to help you figure out what will be the best move for you. In this sellers market when buyers make an offer, it is ever important that they present themselves as most able to attain the funding for the loan so that “just right” home won’t slip through your fingers.checklist-1919292_1920

Get pre-qualified by a lender

Some already know why getting a pre-qualified letter from a lender gives buyers an advantage over other buyers. (Those who don’t: A pre-qualified letter shows that the buyers are financially able to obtain a loan for the needed funds to close on the house. Any other buyers who make offers without one have no evidence of being able to pay for the house which is quit an advantage. Naturally, sellers air towards those offers with the pre-qualified letters.) What many don’t know is borrowers who get a pre-qualified letter from a lender are significantly more likely to be satisfied with their lenders. Researching your lender options and what they offer while you’re not “under the gun” to obtain a loan allows borrowers time to make sure they find the lender that is right for them, offering the best programs and products available. Don’t wait until you are writing an offer on a home to find a lender. Do it first, before you find “that” home.


Lock in a low rate

chests-34153_1280 moscow idaho real estateCommonly, I would not push this, but the cost of locking in a rate could be paid off in the first year of your mortgage payments given how much the rate goes up. For instance, on a $200,000 home loan, at 5% (for ease of numbers) is about $30 dollars a month. Paying for a lock to dodge another .25% rate hike would be paid off in the first year.

Apply Online

Online MOrtgage Lenders Copyright free Pixabay Moscow Idaho REal estateNow like many Realtors®, I do have some personal favorite lenders who I know to do excellent work for my clients, but I’d be remiss to mention how the market for lenders has become more competitive now that lenders have shed the brick and mortar and gone solely online, passing those savings to their clients. Online lenders such as Quicken Loans and Guaranteed Rate, make up about half of the mortgage market. Thanks to their digital foundation, their process tends to be more streamlined and their rates can be competitive, so if you can forgo the individual attention you will have in a brick and mortar institution, this may be a good way to go. (JDPower.com published a survey that shares which online lenders were liked most/least.) If not, then you could use what they offer as ammo for negotiating a better rate or loan offer from your preferred mortgage broker or lender.

Want a fixer upper but don’t think you can get a loan to cover the rehab job?

203K. That is the name of the type of loan that will allow you to roll into your home loan additional funding meant solely for rehab. Buyers can get a maximum of $35,000 with a 203K. At closing, you will get half of the 203K loan to give to contractors as down payment and the last half comes in 4 months. (Note, all work must be done inside of 4 months.) If there is any money left over, it is put towards your principal.

Moscow Idaho real estate empty pockets

Need help with down payment and closing costs?

If you area first time home buyer (or not), your credit is not the best, and you have at least .5% of the home price to put down, you may qualify for Idaho Housing’s 10-year down payment and closing costs assistance 2nd mortgage program. Whew. That is possibly the longest title of a loan program I’ve ever typed but worth the effort if you want a home and down payment or closing costs is the only thing that stands between you and owning a home. To know if you might be eligible, contact your lender and ask about it.

How to avoid paying Mortgage Insurance Premiums

Many apply for a Federal Housing Authority  (FHA) loan because they lack the funding for down payment (FHA loans require only 3.5% down payment) and those with credit scores of 580 or higher can qualify. While FHA’s help people get into homes, FHA’s are considered riskier loans and therefore come with mortgage insurance premiums (MIP) that buyers have to pay up front and for the life of the loan each month which comes at a cost of .85% premium. If buyers have good credit and can qualify, the better option might be to go with a low-down payment conventional loan. In the long run, buyers will save more money not paying MIP.


More than one in five buyers regret the mortgage lender they chose when buying their home. Many go with the first lender they talk to or the lender of the bank where they have a checking account. I encourage to expand your search and do it sooner than they days around when you make an offer on a home. Doing so can make the process go more smoothly and guarantee that you are getting the best loan possible for you and your family. As a former educator, I can’t help but say–doing your homework will be worth the results. ;o)


Shannon May realtor Moscow Idaho

217 S. Main St., Moscow
O: 208.882.0800
C: 208.892.9256

Why for sale by owner isn’t a good plan, Part 2

workstation-148084_1280 Pixabay Moscow ID real estateFor Sale By Owners are commonly unfamiliar with the contract and related processes required to close the deal

The job of selling a home goes well beyond finding a buyer offering the right purchase price. Real estate contracts are riddled with deadlines and clauses full of contingencies related to mortgages, inspections, appraisals, not to mention the ones added by buyers and sellers. Finding competent professionals to handle loans, surveys (when needed), inspections, appraisals, repairs to a broken title, and home repairs-all without missing any deadlines can make reaching the closing date challenging at the least and near impossible for owners who work full time and aren’t ready to manage a contract of this size and nature.

For Sale by Owners usually lack the marketing know-how moscow idaho real estate marketing plan

While it is a Realtor’s® job to craft a professional and digitally comprehensive marketing plan that is tested and proven effective over many applications, a homeowner has not likely sold a home before, and as a result would be unable to advertise their home for sale to the degree and exposure a Realtor® can. Home owners commonly have a yard sign and a listing or two a couple websites at best, but an agent worth their professional metal will go far beyond that using: listing on the official MLS site (where the home owner cannot list) which populates listings on many other real estate-based sites, their broker’s website, the agent’s own website, and utilize paid advertising on many social media sites. More exposure equals best sale price.

For Sale by Owners do not have real estate network that a Realtor has

moscow idaho real estate realtors network agentsBeing in the real estate industry has its perks such as developing a network of professionals who we can communicate with regarding a new listing. Realtors® keep on hand contact information for all the Realtors® they have ever worked with and can call on them when they are about to advertise a new listing which can be handy for both buyers and sellers to get wind of a new listing as soon as it happens. Tapping their network of agents who have clients watching the market ensures the greatest possible exposure for the home.

Homeowners are emotionally vested in the process which inhibits their objectivity

goats-2189621_1920 moscow idaho real estateHomeowners are emotionally attached to their home, making it difficult to see beyond their fond memories of living there to what the reality is-what is the home really worth to buyers (not them) and what should be done to improve the curb appeal. Also, they run the risk of responding in anger when a buyer unintentionally offends them which can kill a potential sale. On the other hand, a Realtor® is a neutral party with much experience of knowing what sells a home and what does not. They can advise not only the best price possible, but how to stage the home to capture aspects popular with buyers in the current market. The Realtor® serves as the objective party who can bring the sellers down off the ceiling and back to the negotiating table when potential buyers offend them in some fashion. Without a Realtor® to help guide homeowners through the process, reminding them why negotiating a good counter offer is better than walking away, potential deals die before they ever came to life.


So, if you were considering the merits of listing your home yourself, I hope I’ve made a reasonable case for why you would be better served to use an agent. If I have, feel free to explore my About Me as a Real Estate Agent page and give me a call.

Shannon May realtor Moscow Idaho

217 S. Main St., Moscow
O: 208.882.0800
C: 208.892.9256

Why For Sale By Owner isn’t a good plan, Part 1

Moscow, Idaho Sell HomeA new job. Down-sizing for retirement. Found that Forever Home you’ve always dreamed of. Whatever the reason- you know you are going to move and you need to sell your home. You start thinking about what you may get for your home and the costs involved in selling. Those of you who are perfect models of how to find discounts would look into what Realtors® are paid and make that face. You know the one- just like the face you make when you just found out the movie theater has raised the price of tickets yet again face. But in this case, it’s much more than $1. Naturally, you begin calculating what you could save if you sold your own home. You wonder: Is taking on the Realtor’s® job all that difficult and time consuming? Would it be worth it?

As a Realtor®, I’ve heard stories of how a For Sale By Owner transaction went wrong and read court cases of the mishaps surrounding For Sale By Owner transactions. This is information though, that people not in my industry would not come by readily. Below are reasons why you should use a good real estate agent who sells homes for a living rather than dive into the largest financial transaction you’ll ever complete on your own. In the interest of brevity I will give you four reasons not to go the For Sale By Owner route today and post another four next week.


A For Sale By Owners sell for less money than those with a Realtor.Moscow Idaho real estate money saved

The National Association of Realtors®’s 2016 statistics on the mean home sale price for agent-assisted homes was $245,000 while for Sale By Owner mean home sale price was $185,000. Bear with me a moment here while I do some basic math. The national average Realtors® commission sits between 5%-7%. So, for example’s sake, let’s say the commission is 6% (split 4 ways between the selling and listing agents’ offices). A sale price of $245,000 would mean a deduction of $14,700 for commission which would leave a seller with $230,300, well above the $185,000 price tag the For Sale By Owners could achieve. Don’t forget the For Sale By Owner still doing months of unfamiliar real estate work to sell their home at that lower price tag.

Realtor® listed homes generally sell higher than For Sale By Owner homes for many decades now and is a testament to the difference it makes to hire a Realtor® who makes a career out of learning and knowing the real estate market and how to attain the best price possible.

Some home owners miss the “golden time” and with it, the best possible price for their home

moscow idaho real estate

Gee, I wonder why all my windows of opportunity are never open?! Attribution: By GTIkitty (Own work) [CC BY-SA 3.0 (https://creativecommons.org/licenses/by-sa/3.0)%5D, via Wikimedia Commons

This point delves deeper into the sale price difference listed above. The “golden time” is the window starting the date of listing the home on the market to two weeks later. During this window is the time when your home is new and fresh to agents and buyers alike who are looking for a home and haven’t found one yet. If the home is priced right, offers will come inside that window, and those offers represent what is the best and highest possible price that can be achieved for that home at that time on the market. Overpriced homes field little to no action from buyers during that window, and after a home has sat idle on the market for months, buyers and their agents, begin to wonder what’s wrong with it and will bring low ball offers to the table, sometimes well below what the home is really worth.



Who’s saving money, the sellers or the buyersBased on No Attrib req images my image

So, an often overlooked factor in going the For Sale By Owner road is who will save money avoiding the Realtors’® commission-the sellers or the buyers. While For Sale By Owners choose selling on their own to save money, they sometimes don’t take into account the buyers’ perspective. Buyers can have a Realtor® do all the work for them and after all is said and done, their Realtor® is paid by the sellers. So why would they choose to do the work themselves in lieu of a professional? They expect to pay less for the home. Let’s revisit that math I did earlier. $14,700 would be a number of importance not to just the sellers but to the buyers too. If they are going to attempt completing one of the largest transactions of their lifetime solo, they would desire incentive to do it, like paying $14,700 less. Buyers may not feel $7,350 is enticing enough to bravely go where few will and navigate the lengthy contract’s clauses and contingencies, especially when their other option is for someone else, a professional who knows the contract well, will do it for them and at no cost to them.

Of all homes sold, very few are by For Sale by Owners

from Pixabay man bathroom toilet, modified moscow idahoOf all home sales, in 2016 only 8% are For Sale By Owner. This number consistently remains low and has shrunk over the decades from the highest at 19% in the 80’s. Couple this with another stat-90% of home owners that started as For Sale By Owners end up handing it over to a Realtor®. I think these two numbers speak for themselves and are reason to skip this plan, hang onto that golden timeframe, and let a professional market your home for you. But, just in case this was not enough to push convince you that For Sale By Owner isn’t a good plan, I will post four more good reasons why not to next Sunday.

Shannon May realtor Moscow Idaho

217 S. Main St., Moscow
O: 208.882.0800
C: 208.892.9256