Beyond the Mortgage: Lending Options to Land your Dream Home

By Catherine Martyn, Peoples Bank

There’s no denying it’s extremely challenging to buy a home right now. While prices in Snohomish and King County are even higher, August prices in Island County are still up 8.7 percent over the previous year, thanks to low inventory and increased demand. Bidding wars are almost a given, making big down payments and strong credit more crucial than ever.

If the competitive market makes building a home seem like a better option, the construction industry currently has its own set of challenges. Global supply chain issues have back-ordered many materials, and prices for lumber and other basics have undergone wide price fluctuations.

With all these constraints, many potential home buyers are concerned they’ll have to give up on the process entirely. Some are holding off in the hope that prices will cool, while others are exhausted from constant bidding and heartbreak on the purchase market. Many buyers have also reached their affordability ceiling — they’d rather rent than be saddled with a mortgage on an expensive home that puts constraints on other parts of life.

It’s extremely challenging to buy a home right now, but there are many creative lending solutions to help potential home buyers achieve their goals.

It’s extremely challenging to buy a home right now, but there are many creative lending solutions to help potential home buyers achieve their goals.

The good news is that even in a challenging real estate market, there are loan opportunities for everyone on the property ladder. Here are some options to consider:

  • Be open to purchasing a fixer-upper. To win a bid on a turn-key home in today’s market, you’ll likely have to offer a higher down payment and waive any rights to home inspections. That means you need spotless credit and won’t have an opportunity to inspect the home before committing. With a “fixer-upper,” you’ll have less chance of a bidding war, giving you time to do a thorough home inspection so you know what you’re buying. The lower sale price makes your mortgage more affordable, and you can get a HomeStyle Renovation loan that includes funds for improvement or repairs so you can create your dream home.
  • Look into presale homes. Thanks to supply chain delays, new construction can be expensive and challenging. A more affordable option could be a presale home, which is a home that is available for purchase from a developer before it’s move‑in ready. Presale homes may not be fully individualized, but there could be plenty of opportunities to customize cabinetry, colors, and finishes to suit your style. And, if you’re not in a hurry, you may even be able to pick out the lot that’s best for you in the development.
  • Consider refinancing an existing home. Rates are expected to remain low through the new year, so refinancing to lower monthly payments or borrow funds for a home renovation project could be an option for some people. Conventional rates have averaged 3 percent this year, so any homeowner paying 4 percent or over is encouraged to speak with their lender about refinance options or benefits.

Whether you already have your dream house in mind or don’t quite know what you want to buy or how you can afford it, it is always a good idea to talk to a loan officer to learn about your options and better understand the process. A savvy loan expert can dispel myths, suggest lending products, help you take advantage of lower rates, and be a trusted partner as you navigate this tumultuous real estate market.

Catherine Martyn is a Senior Mortgage Loan Officer at the Peoples Bank Coupeville Real Estate Loan Center. Peoples Bank is a locally owned and operated, independent full-service community bank with 23 branches throughout Washington including locations in Coupeville, Freeland, and a brand-new Oak Harbor Financial Center opening on Oct. 25. Find your local branch and learn more at peoplesbank-wa.com.

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