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Chris Salese

I’m going to start by making a reference to a classic children’s book, “The Giving Tree,” written by Shel Silverstein.

As you remember from the story, there are plenty of different interpretations that can be made of it.

Therefore, I don’t want to say one way or the other whether our local real estate market or the mortgage banking community represent the tree in the book.

For now, let’s just say there are many of you who are currently enjoying high levels of home equity and there are numerous available loan programs to help you leverage it as well.

However, because of this high level of home equity and prolific lending product combination, it has certainly tightened up the terms that are being negotiated between buyers and sellers.

For example, sellers typically want the maximum sales price for their home and request buyers to close in the shortest amount of time to get it.

Consequently, buyers who already own a home are forced into writing “non-contingent” purchase offers since sellers don’t usually want to wait for buyers to sell their existing residence first.

Fortunately, there are five popular ways you can finance a non-contingent offer on your new home.

The first way is done by converting your current residence to a rental property to offset any mortgage payment on it.

Assuming you meet the minimum down-payment guidelines on your new home with funds from your asset accounts, then certain lenders don’t require you to have any landlord experience nor a rental agreement or even a prospective tenant deposit check to use your rental income toward qualification.

The second way is through a lien-release program.

It’s where you qualify for a loan that’s large enough to cover the debt on your current residence, plus the down-payment and a new first mortgage on the home you are buying.

Effectively, it’s an all-in-one financing program that likely won’t require you to move money out of your asset accounts for your down-payment.

You simply leverage the equity in the home you are selling. When you eventually sell your current home, your net sales proceeds can be used to lower your total loan amount and it will also recast at that time.

A third option is via a bridge loan.

There are tons of bridge loan sources in the marketplace, some which only require proof that you have either enough assets or income to make 12 monthly payments on the loan.

The fourth way is performed with private money.

In fact, property “flippers” like this because their private money sources are utilizing equity share agreements in lieu of requiring borrowers to come up with large down-payments.

Lastly, there’s a fraudulent non-contingent offer that happens when a Realtor or lender don’t understand how these programs work but they erroneously “pitch” them to their clients.

Please be careful. The loan product gates are wide open — from social media-funded assistance programs to bank statement programs over to non-contingent financing options.

“The Giving Tree” is alive and well.

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Chris Salese can be reached at chris@delsurmortgage.com or 707-363-4439. He is a licensed California mortgage lender (LO NMLS #254469 — CA-DBO #254469 Corp NMLS #1169 Equal Housing Lender.

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