It's an increasingly competitive market out there and we've just learned a fabulous secret to get your FHA or VA offers accepted when you are up against other conventional/cash buyers! Chase Bank just spent part of the morning with The Ruth Pugh Group, explaining the advantages of their new "Chase Home Buyer Advantage Program". This really is a wonderful strategy that we are sure more lenders will catch on to - but for now, Chase is the only bank we know of offering the program.
Let's step back for just a moment and look at the standard process. Typically, the buyer meets/emails the mortgage banker, gives them a summary of their income/debt and authorizes their credit to be pulled - and the mortgage banker issues a pre-approval letter. The pre-approval is what allows you to make an offer BUT it is contingent on the lender getting all your other documentation and running the file through underwriting. This process usually doesn't begin until your offer has been accepted and escrow is opened. It then generally takes 14-30 days for underwriting approval to be issued. All the waiting around makes everyone nervous; from you the buyer, to your agent and most importantly - the seller.
The seller is who you want to impress with your offer, especially when there are multiple offers, which is all too common today. Surprisingly, over 19% of traditional 2012 sales in California fell out of escrow, and 45% of short sale sales (according to the 2012 CAR Annual Housing Marketing Report). That's not a very pallatable statistic for a seller to digest: more than a 1 in 5 chance your financing will not be approved and they have to go back on the market and start all over again! You have to think of it from the seller's perspective; they want a solid deal that won't fall apart, sometimes price isn't as much of an issue as knowing a deal will close. So how do you make the seller feel better and give yourself an advantage against the competition ... read on my friend!
With the Chase Homebuyer Advantage Program, they not only provide you with the pre-approval letter but they also get all the other detailed paperwork from you in order to run your file through underwriting, get final approval and issue a Conditional Approval Letter (which is good for 90 days). In addition, this allows you to REMOVE THE LOAN CONTINGENCY on your offer. This is huge in a competitive offer situation. Can you see how this will give you a huge edge to get your FHA or VA offer accepted? You've already had your lender do almost all the work on the file, all you need is a contract and an appraisal and you are as good as closed - the seller is going to love this!
You are essentially giving the seller peace of mind knowing there is no loan contingency and the only thing left for them to worry about is the appraisal (which is beyond the sellers/agents/buyers control). The "Chase Homebuyer Advantage Program" is also great for Conventional buyers who want to be even more competitive and be able to remove the loan contingencies on their offers, but they are generally already at an advantage being a conventional buyer with 20%+ to put down. FHA and VA offers are often viewed as not as strong as Conventional loans due to the small down payments of Zero to 3.5%; and of course, it's pretty difficult to compete with cash.
Another important strategy to get your FHA or VA offer accepted is working with an amazing group of agents and mortgage bankers who know about these programs and stragegies for your success! The Ruth Pugh Group is committed to being your advocate in the real estate market and I, for one, am so happy we have partnered with Chase and brought them in to speak with our office today. In addition, you need a great Chase Mortgage Banker like Holmes T. Bennett (aka HT) in the Chase Hillcrest office, 619-248-3759.