Financing affects an offer’s consideration

The majority of buyers don’t have enough cash available to buy a home, so they need to obtain a mortgage financing to purchase a home. Most buyers make their purchases contingent upon obtaining mortgages, so the seller is informed of a buyer’s financing plans in order to consider the merits of an offer. This is the main reason financing details are included in any offer.

Down payment

As part of an offer, the size of a down payment is also considered. This allows the sellers to evaluate the probability of obtaining a loan. Typically it is easier to get approved for a mortgage with larger down payments – mortgage underwriting guidelines may be less strict.

Seller’s assistance with closing cost

Often as part of an offer buyer’s request the seller to pay a portion of the closing costs, or provide other incentives to purchase. When asking for assistance, buyers will probably find the seller less willing to negotiate on price. Besides, what buyers are asking is for sellers to give buyers some money to sell their house. The end result though is does help both the buyer buy and the seller sell with seller’s assistance.

Cash offers

Rarely individual’s makes cash offers to buy a home, so the seller or seller’s agent may ask for documentation that shows the buyer has the funds available. Bank statements are usually fine. If you have to liquidate stock or other assets, a buyer’s offer should give a timetable or provide proof of when the assets will be converted.

Added financing details in an offer

Offers should also contain information on whether a buyer is obtaining a fixed rate or an adjustable rate mortgage. It should also state whether obtaining conventional financing or financing such as a VA, Rural Housing, or FHA loans.

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