The key to selling your home for a top price is to generate as much interest — and offers — as possible. And the best way to do that is by making sure that you tap into the widest buyer pool you can.
This is called getting maximum exposure. An important part of getting it is making sure you don’t needlessly eliminate qualified buyers from having a shot at buying your home.
Which brings us to the topic of home financing. In the interest of fire-proofing their home sale, some sellers will put restrictions on the type of financing they’re open to from buyers, with all-cash offers and conventional mortgages often being seen as the most desirable, and preferred, options.
But there are a range of home financing options that are available to buyers, and as a seller, it’s important not to winnow down your buyer pool by rejecting any of them out of hand. Here are some of the financing options you may wish to stay open to, so you can get the maximum possible exposure when selling your property.
Conventional mortgages
This type of loan is the most common one sought by home buyers and is offered by major financial institutions, such as banks and credit unions. The barrier to access for these loans is pretty high, with applicants needing a credit score above 620 and a debt-to-income ratio under 50% (not to mention a sizable down payment). This makes conventional mortgages a good option for home buyers who have good credit and a solid employment history, but can put them out of reach for others.
Government-issued loans
Prospective home buyers who don’t qualify for a conventional loan may secure financing through government-backed loans. The two major ones are backed by the Federal Housing Administration (FHA) and the Department of Veteran Affairs (VA).
Even though these loans are offered to people who can’t access conventional mortgages, it doesn’t mean FHA and VA loans have no qualifying requirements. Eligibility is assessed on a number of factors, including a minimum credit score of 500. Mortgage insurance is also required for the borrowers.
Seller financing
Seller financing is another option, albeit a rarer one. In this case, the buyer doesn’t access funding through a formal lender at all, but directly from the seller. The seller lends the money to the buyer and gets paid back in installments, essentially acting as a private mortgage provider.
Seller financing is typically only considered when the seller is highly motivated and has fewer options for buyers. Work closely with your realtor and lawyer to know if this is a viable, and advisable, option for you when selling your home.
An experienced realtor can help you understand your options and maximize your exposure when selling your home. The agents at Pan Florida Realty have close to four decades in the industry and can steer you in the right direction (and away from the wrong one). Reach out to us today to schedule your consultation.
