Stress in the Home Buying Process
Owners.com, an innovative online brokerage, recently commissioned a survey of more than 1,200 consumers considering a home purchase this year. The theme of this year’s spring real estate season? Stress in the home buying process. 72 percent of potential home buyers stated that they expect stress in the home buying process, with many citing financial aspects as the most concerning. Additional key findings are included below.
Stress in the Home Buying Process
When asked about concerns and issues when buying a home, leading financial aspects included:
- Fear of losing earnest money deposit (64 percent)
- Becoming “house poor” (61 percent)
- Bidding wars driving up the price (59 percent)
Amy Swinderman, staff writer at INMAN says, “Saving for a down payment and feeling confident that their investment will be protected remains a significant barrier for many would-be homebuyers, the survey concluded. Only 55 percent of renters are confident they will get a return on their down payment investment if they buy today, but sell their home within the next few years, the survey said.
Down Payment Protection eliminates one form of stress in the home buying process.
“According to the survey, 81 percent of renters and 67 percent of homeowners believe that down payment protection would give people more confidence in buying a home. About 63 percent of renters said they would be more likely to buy a home sooner if they could have the option to buy down payment protection. More than half of millennial homeowners said they would be more likely to buy a new home if they can have the option to buy down payment protection.”
“Rates,” says Swinderman, “will vary depending on the buyer’s state. On average, buyers will pay about $1,000 for the policy. In some cases, lenders may agree to pay for the coverage and charge the buyer a higher interest rate, which would increase monthly or other periodic loan payments. Other options include a seller paying for it, or a buyer’s agent paying for it.
There’s a plan.
At least one company is offering the +Plus program. Buyers who purchase the policy will pay a one-time fee at closing. Just Google “Down Payment Protection” for companies offering this policy.
“Coverage only applies if the sale price of the home is lower than the purchase price, and if the Federal Housing Finance Administration (FHFA) Home Price Index (HPI) for the homeowner’s state at the time of sale is lower than it was on the date he purchased the home. The payout is calculated as the lesser of the homeowner’s down payment; the actual equity lost; or the purchase price of the home, times the reduction in the homeowner’s state HPI. Some eligibility requirements apply.”
I say bravo. If it will help limit stress in the home buying process, and move renters into a new or existing house. Most surveys show a decided cost advantage of owning a house over renting. Surveys show, for example, that rent takes a bigger slice of monthly income than does owning.
Nu Start Homes LLC is here to help homeowners out of any kind of distressed situation.
We are part of a nationwide group of thousands of investors, helping tens of thousands of homeowners every year. We may not be the “traditional” route, but we CAN help and we can do it quickly.
Give us a call today at 267-202-5324 Send Text to let us know what YOU need help with!