Chartway Federal Credit Union helps homeowners navigate the transition from selling to buying – St George News
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CONTRIBUTED CONTENT – When homeowners find their needs are increasing outside of what their current home offers, the question often arises of how to buy a new home while selling their current one.
No matter the situation, Chartway Federal Credit Union helps southern Utah homebuyers get the most for their money with a full suite of mortgage options and member services.
Thomas Koger, senior mortgage manager, said the ideal arrangement for a homeowner who is navigating between selling and buying at the same time is a simultaneous close. Chartway helps structure loans that allow members to sign both agreements on the same day and easily move from their current home to their next investment.
“We want to give them the best service, have an open line of communication and let them know that we are here to help them get into their dream home,” said Koger.
Traditionally, buyers have used contingencies when making an offer to give themselves a buffer to sell their current home. A contingency offers the option to opt out of the purchase within a specific time frame – usually one to two months – if their home doesn’t sell. But with interest rates still low and home values skyrocketing in southern Utah, it’s definitely a sellers’ market, and Koger said this shift in power is placing buyers with offers of. emergency in a difficult position.
“I have clients who have been pre-approved for months and keep making offers, but they are outbid by tens of thousands of dollars or by cash buyers,” he added.
Sometimes potential buyers simply cannot find a seller who will accept an offer on a contingency basis. In this case, Koger said there were a few options they could explore to increase their purchasing power while waiting for their home to sell. These include taking out a line of credit that uses the equity in their current home as collateral for a new down payment and a new mortgage.
Buyers can also take out a bridging loan, a type of high-interest loan designed to cover the down payment on a new home. However, borrowers should plan to pay it off by selling their current home as quickly as possible due to the high annual percentage rate. Koger said it’s important to remember that buyers exploring these options will need enough income and equity to qualify for concurrent mortgages.
If a buyer is unable to juggle two mortgages and there isn’t much on the market, they may find themselves in a temporary living situation while waiting to buy a home, but Koger said that there were steps the lender and the real estate agent can take to help make the transition smoother.
Homeowners can leverage the power of the seller’s market to negotiate better terms for themselves, such as extending the closing period from typical 30 to 60 days to two or three months while they purchase a new property. Koger said a refund clause in the sales contract is another possibility, which gives sellers the option of temporarily renting their home to the new buyer until their next home is ready to move into.
The journey to home ownership through Chartway begins with a pre-approval consultation. Once the application was submitted, Koger said their mortgage loan officers would present several different borrowing options and help the client decide which one is best.
Koger said most members get pre-approval on the same day, which puts them in a more advantageous position to bid. Chartway will also pre-subscribe for the loan even before you have made an offer, which will speed up the process from when the home is under contract to closing.
Chartway offers conventional fixed rate mortgages as well as loans guaranteed by the Federal Housing Administration, the Department of Veterans Affairs and the Department of Agriculture. Koger said buyers eligible for VA or rural loans often move in without a down payment. First-time home buyers may be able to get a loan with as little as 3% down payment.
With five locations serving Washington and Iron counties, Chartway offers a range of financial options, including auto loans, personal loans, credit cards, and cash back checking accounts.
“We have some of the lowest fees in the industry and some of the most competitive interest rates,” Koger said. “Since we are a credit union, we really promote service to our members.”
Founded in 1957, Chartway is a nonprofit credit union serving more than 192,000 members across Utah, Texas and Virginia. Their charitable arm, the We Promise Foundation, is among the largest donors to the State’s Make-A-Wish Foundation. Chartway entered the southern Utah market in 2009.
Written by ALEXA MORGAN for St. George News.
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