How to avoid getting outbid on your home

In today’s market, bidding for a new home can get pretty intense very quickly. There are times you might be competing with a dozen or more buyers for the same property. Here are 3 tips to avoid getting outbid on your new home:

1. Make sure your loan paperwork is turned in prior to placing an offer.  In a lot of cases, you are going up against cash buyers, which means they aren’t going to have to wait for financing approvals. If you were the seller, wouldn’t you prefer to do business with a cash buyer who can close the deal quickly? That’s why it’s critical to get ahead of the game. Make sure your mortgage lender has your source of down payment funds, your asset documentation, your credit report and your income documentation. That puts you in the best position possible to close promptly and compete with cash buyers.

2. Pay cash, but do it the right way. You have 90 days after closing on your home to place a mortgage on a property you purchased with cash if you’re going to secure a tax deduction. To get loan approval after you close, you must document the source of fund that you used to make your purchase with.

3. Think about using lender-paid mortgage insurance. If you use lender paid mortgage insurance, you can accept a slightly higher interest rate in exchange for no mortgage insurance. This is less expensive than FHA insurance or Private Mortgage Insurance. The lower monthly payment can help you afford a home in a higher price range. 

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