CONTRIBUTED CONTENT — When homeowners find their needs expanding outside of what their current residence provides, the question often arises of how to buy a new home while also selling their current one.
No matter the situation, Chartway Federal Credit Union helps Southern Utah homebuyers get the most for their money with a comprehensive range of mortgage options and member services.
Senior mortgage loan officer Thomas Koger said the ideal arrangement for a homeowner navigating selling and buying at the same time is a simultaneous close. Chartway helps structure loans that allow members to sign both agreements on the same day and easily transition from their current home into their next investment.
“We want to give them the best service, have an open line of communication and let them know we’re here to help them get into the home of their dreams,” Koger said.
Traditionally, homebuyers have used sales contingencies when making an offer to give themselves a buffer to sell their current home. A contingency provides the option to back out of the purchase within a specific time frame – usually one to two months – if their home doesn’t sell. But with interest rates still low and home values skyrocketing in Southern Utah, it’s definitely a seller’s market, and Koger said this shift of power puts buyers with contingency offers in a difficult position.
“I’ve got clients who have been pre-approved for months and keep making offers, but they’re getting outbid by tens of thousands of dollars or by cash buyers,” he added.
Sometimes, prospective buyers simply can’t find a seller who will agree to an offer with a contingency. In this case, Koger said there are a few options they can explore to increase their buying power while they wait for their home to sell. These include taking out a line of credit that uses the equity in their current home as collateral for a new down payment and mortgage.
Buyers can also take out a bridge loan, a type of high-interest loan designed to cover the down payment on a new home. However, borrowers should plan to pay it off by selling their current home as quickly as possible due to the elevated annual percentage rate. Koger said it’s important to remember that buyers exploring these options will need enough income and equity to qualify for simultaneous mortgages.
If a buyer is unable to juggle two mortgages and there isn’t much on the market, they may end up in a temporary living situation while waiting to buy a home, but Koger said there are steps that both the lender and realtor can take to help make the transition smoother.
Homeowners can leverage the power of the seller’s market to negotiate better terms for themselves, such as extending the closing period from the typical 30-60 days to two or three months while they shop for a new property. Koger said a rent-back clause in the sales agreement is another possibility, which gives sellers the ability to rent their home from the new buyer temporarily until their next home is move-in ready.
The journey to homeownership through Chartway begins with a pre-approval consultation. Once the application is submitted, Koger said their mortgage loan officers will present several different borrowing options and help the client decide which is best.
Koger said most members obtain pre-approval the same day, which puts them in a more advantageous position to make an offer. Chartway will also pre-underwrite the loan even before they’ve made an offer, speeding up the process from when the home goes under contract until closing.
Chartway offers conventional fixed-rate mortgages along with loans backed by the Federal Housing Administration, Department of Veterans Affairs and Department of Agriculture. Koger said buyers who qualify for VA or rural loans often move in with no down payment. First-time homebuyers may be able to secure a loan with as little as 3% down.
With five locations serving Washington and Iron counties, Chartway provides an array of financial options including auto loans, personal loans, credit cards and checking accounts offering cash back incentives.
“We have some of the lowest fees in the industry and some of the most competitive interest rates,” Koger said. “Being that we’re a credit union, we really drive service to our members.”
Established in 1957, Chartway is a not-for-profit credit union serving over 192,000 members across Utah, Texas and Virginia. Their charitable arm, the We Promise Foundation, is among the largest donors to the Make-A-Wish Foundation in the state. Chartway entered the Southern Utah market in 2009.
Written by ALEXA MORGAN for St. George News.
• S P O N S O R E D C O N T E N T •
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