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Affinity Title

MORTGAGE KNOWLEDGE CENTER

PenFed Mortgage with Confidence

Home Buying Steps

  • Getting Started
  • Finding a Home
  • Getting a Mortgage
  • Home Ownership

Mortgage Topics

  • VA Loans
  • Conventional Loans
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  • PenFed Top 10
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CONVENTIONAL LOANS

Rates starting at % (APR %)¹

 

Apply before becoming a member.

After your application, we’ll help you:

1. Discover you’re eligible to become a PenFed member

2. Open a Savings/Share Account and deposit at least $5

  1. Home
  2. Mortgage Knowledge Center
  3. How To Get Your Offer Accepted in a Seller's Market

MORTGAGE

How To Get Your Offer Accepted in a Seller’s Market

What you'll learn: Tips for getting the seller to accept your offer

EXPECTED READ TIME: 8 MINUTES

August 25, 2022

Getting your offer to purchase a home in a hot seller’s market takes preparation and the right lender. If you’re not prepared or use a lender that doesn’t do everything possible to set you up for success, you might be in trouble. Read on to discover our top tips for success.

Get a Solid Preapproval

The term mortgage preapproval can mean different things to different lenders. For example, a less-than-diligent lender may preapprove you solely on a phone conversation without even pulling your credit.

Such lenders take a quick application using the information you supply. But the trouble is, some of that information might not be completely accurate. For example, if you’re self-employed, you might think you make $100,000 when, in reality, you only make $30,000 because you have lots of tax write-offs.

A solid preapproval starts with a credit pull. Your credit report not only shows your credit score but also your credit history. If your credit isn’t pulled and you have late payments (especially late mortgage payments), that can negatively impact your loan later.

Make Sure an Underwriter Reviews Your File

When you’ve completed your application and your credit is pulled, smart lenders put your loan through an automated approval system called DU, which stands for Desktop Underwriter.

DU will look at the data from your application and credit and determine whether or not your loan can be approved. In most cases, there will be additional information requested. Here are some examples:

  • If you’re selling a home and buying a new one, the underwriter will want to see both sales contracts signed by all sellers and borrowers.
  • If you’re using child support as income, you’ll need to supply your divorce decree and child support order along with proof of payment for at least six months.
  • If you’re self-employed, you’ll most likely need to supply a current profit and loss statement and business license.

Submit a Clean Offer

There are times when you can request the moon and get it — that’s called a buyer’s market. But the rules are completely different in a seller’s market.

In a seller’s market, the seller has the advantage. There are multiple buyers who want to buy their home, and they get to pick the best one.

For you, that means you shouldn’t ask for anything extra. Let’s go over some examples:

  • Don’t ask for them to include the fridge, fancy chandelier, or large play structure out back. Of course, the seller can offer, but don’t put it in your offer.
  • Don’t ask for a super-long escrow unless that’s what the seller is looking for.
  • When putting in an offer, be short, sweet, and generous.

Offer an Impressive Earnest Money Deposit

The amount of earnest money deposits can vary, but the best thing to do is consult with your real estate agent and ask them how much you should offer.

For example, if most buyers would offer a $5,000 deposit, by you offering a $10,000 deposit, would get the seller’s attention.

Consider Offering Above the Asking Price

Similar to the earnest money deposits, have a talk with your realtor to see how much you should offer. In some parts of the country, offering $30,000 or even $50,000 over asking price is commonplace in a red-hot market.

Know the market and be prepared. You don’t want to be underbid time after time, resulting in you getting discouraged and giving up.

Lock In Your Rate So You Can Relax and Be a Better Buyer

Once your offer is accepted, lock your rate in as soon as you can. The last thing you want to do when you have a hundred things on your to-do list is worry about what the rates are doing.

Lock your rate in and then you can be more present for any upcoming negotiations, inspections and moving preparations.

For a Simultaneous Close, Work With the Right Lender

If you’re selling your home and buying at the same time, it’s vital to work with an established lender who knows how to keep the loan moving along so it will close on time. That’s why members love credit unions — they know credit unions offer excellent service and rates.

Compete With Cash Buyers

Having a solid preapproval and putting in a clean and generous offer can help you stand out from the crowd. It’s vital during hot seller’s markets that you put yourself in the seller’s shoes and cater to what would be appealing to them.

 

 

For more information about PenFed Mortgages:
 

PenFed Mortgage: 

800-970-7766

Get Started

SIMILAR ARTICLES

How Long Does It Take to Buy a Home?

Buying a home has several steps, know what they are and how to be prepared. From getting your financing in order to closing and getting your keys.
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Real Estate Listings Online - Viewing Tips

If you’re shopping for a new home, you’ll likely start visiting house shopping sites. Discover tips and pitfalls when real estate shopping online.
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Homebuying Trends — Millennial Homebuyers

Millennial homebuyers are on the hunt for single-family homes, condos, and townhomes. Discover what they're buying.
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Homebuying Trends — First-Time Homebuyers

Find out about the first-time homebuyer trends and demographics, here and what are they buying, and where are they moving to.
Man and woman dancing in their hew home.
image

CONVENTIONAL LOANS

Rates starting at % (APR %)¹

 

Apply before becoming a member.

After your application, we’ll help you:

1. Discover you’re eligible to become a PenFed member

2. Open a Savings/Share Account and deposit at least $5

Home Buying Steps

  • Getting Started
  • Finding a Home
  • Getting a Mortgage
  • Home Ownership

Mortgage Topics

  • VA Loans
  • Conventional Loans
  • First Time Homebuyer
  • Home Equity
  • Homebuying 101
  • Checklists
  • Adjustable Rate Mortgages
  • PenFed Top 10
  • Refinance
  • Jumbo Loans
  • FHA
  • Videos

Mortgage Products

  • Mortgage Center
  • Refinancing
  • Home Equity

PenFed HELOC

Rates as Low as % APR* with flexible use of funds

Apply before becoming a member.

After your application, we’ll help you:

1. Discover you’re eligible to become a PenFed member

2. Open a Savings/Share Account and deposit at least $5

Disclosures

1Except for holidays, rates are updated Monday through Friday at 10:15am EST. The advertised rates and points are subject to change. The information provided is based on discount point, which equals percent of the loan amount, and assumes the purpose of the loan is to purchase a property with a 30-year, conforming, fixed-rate loan. Loan amount of $400,000; loan-to-value ratio of 75%; credit score of 760; and DTI of 18% or less. The property is an existing single-family home and will be used as a primary residence. The advertised rates are based on certain assumptions and loan scenarios, and the rate you may receive will depend on your individual circumstances, including your credit history, loan amount, down payment, and our internal credit criteria. Other rates, points, and terms may be available. All loans are subject to credit and property approval.

*Prime Rate is % as of . The APR for this Home Equity Line of Credit (HELOC) is based on prime plus a margin and can change monthly. Fixed Rate Advances will be amortized over the Fixed Rate Advance Term, with the payment consisting of principal and interest. Your Annual Percentage Rate for a Fixed Rate Advance will be calculated by adding your Prime Rate, your Margin, and the Additional Fixed Rate Lock-In Margin. Your Annual Percentage Rate for a Fixed Rate Advance shall not exceed 18% and shall be equal to or greater than % for primary residences and second homes.

  • Annual Fee: Notwithstanding the foregoing, an annual fee of $99 will be assessed on each account anniversary.
  • Home equity lines of credit (HELOC) are variable rate loans and the interest rate is subject to increase after consummation of the loan on monthly basis. Closing costs range between $500 and $8,500 for credit lines of $500,000. Contact a representative for additional details.

Appraisals: PenFed will attempt to establish value via an independent method. If that method is unsuccessful, or the value is not sufficient for the amount requested, an appraisal will be required regardless of CLTV. An appraisal is always required in the following circumstances:

For all loans with a loan amount greater than $400,000.

If an appraisal is required, it must be ordered by PenFed. You will be contacted for authorization and payment prior to ordering. Appraisal fees average $550 to $850 (some run higher).

  • Closing Cost Credit: PenFed will pay most closing costs associated with a home equity line of credit (HELOC), which includes credit report, flood certification, settlement/closing, property ownership and encumbrances search, recording, property search, and quick close. Member is responsible for any city, county, and/or state taxes if the subject property is located in FL, LA, MD, MN, NY, TN, or VA. If an appraisal is required, the member, who is responsible for the fee whether or not the loan closes, will pay the cost.

Interest may be tax deductible, consult a tax advisor for further information regarding the tax deductibility of interest and charges.

Fixed Rate Advance Lock-In You may lock in an Annual Percentage Rate for Advances during the Draw Period. During your Draw Period, you may choose to have three separate Fixed Rate Advances locked in at any one time, with a maximum of two new Fixed Rate Advances per calendar year. Each Fixed Rate Advance must equal or exceed Ten Thousand Dollars ($10,000.00) and you may not request a Fixed Rate Advance that would cause the amount you owe to exceed your Credit Limit. The only term option for your Fixed Rate Advance is 240 months (“Fixed Rate Advance Term”). However, the term of your Fixed Rate Advance cannot exceed your Repayment Period.

Fixed Rate Advances will be amortized over the Fixed Rate Advance Term with the payment consisting of principal and interest. Your Annual Percentage Rate for a Fixed Rate Advance will be calculated by adding your Prime Rate, your Margin and the Additional Fixed Rate Lock-In Margin. Your Annual Percentage Rate for a Fixed Rate Advance shall not exceed 18% and shall be equal to or greater than % for primary residences and second homes and 4.75% for investment properties.

Property Insurance: Property insurance is required.

Multiple PenFed Loans: Multiple PenFed Equity loans and HELOCs are available as long as the member and collateral qualify (except Texas). For Equity loans and HELOCs the total indebtedness cannot exceed $500,000 for all PenFed Equity and HELOCs combined.

PenFed does not lend on:

  • Mobile homes
  • Co-ops or time-shares
  • Properties that are currently listed on the market for sale
  • Commercial property or property used for commercial purposes, even if a residence is part of the property
  • Undeveloped property (land only)
  • Properties with more than 4 units

Properties that are currently under major construction/renovations: Property must be fully livable, with no safety issues. (Examples: no missing rails from stairs/decks, no open walls with wires showing, missing kitchen appliances/counters, missing bath fixtures or unfinished pool).

  • Additional limitations may apply

Home Equity Line of Credit:

  • This Account has a Draw Period of 10 years, followed by a repayment period of 20 years.
  • If only minimum payments are made during the draw period, the loan balance will not decrease.
  • In Texas, the maximum CLTV available is 80% on owner occupied properties. Additional restrictions apply in Texas, so please ask a representative for details.
  • In all other states, the maximum CLTV is 85% on owner occupied properties and second homes. Additional restrictions or requirements may apply based on application characteristics.
  • Property type of Condo has a maximum CLTV of 80%.
  • The maximum CLTV available is dependent on credit qualification.
  • Rates vary depending on owner occupancy and CLTV and other loan criteria.

Minimum Loan Amount Requirements in all States:

  • For an owner occupied property or second home the minimum loan amount is $25,000 and the maximum amount is $500,000 with a CLTV of 85% or less of the fair market value.

Other terms and conditions apply; call 844-918-4307 to speak with a representative for details. All rates and offers are subject to change without notice. To receive advertised product, you must become a member of PenFed.

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This credit union is federally insured by the National Credit Union Administration. Rates are current as of September 2023 unless otherwise noted and are subject to change.

APY = Annual Percentage Yield
APR = Annual Percentage Rate


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Routing #256078446

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IMPORTANT NOTICE

You are leaving PenFed.org and entering a third party Website that is not a part of Pentagon Federal Credit Union.


The content you are about to view is produced by a third party unaffiliated to Pentagon Federal Credit Union. PenFed takes no responsibility for the content of the page.


IMPORTANT NOTICE

You are leaving PenFed.org and entering a third party site. PenFed Realty, LLC is wholly owned by PenFed and this referral may provide PenFed a financial or other benefit.


For more information about the relationship between PenFed and PenFed Realty, LLC, see the Affiliate Business Arrangement Disclosure.


IMPORTANT NOTICE

You are leaving PenFed.org and entering a third party Website.


The content you are about to view is produced by a third party website that is unaffiliated to Pentagon Federal Credit Union. PenFed takes no responsibility for the content of the page.


IMPORTANT NOTICE

You are leaving PenFed.org and entering a third party site. PenFed Title, LLC is wholly owned by PenFed and this referral may provide PenFed a financial or other benefit.


For more information about the relationship between PenFed and PenFed Title, LLC, see the Affiliate Business Arrangement Disclosure.


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