The home has to be approved too! |

The home has to be approved too!

Daily Staff Writer

Financial FactsBy Bob KieberWhen the real estate market heats up, so do the prices. If there is a strong demand, and a limited supply, the prices go up and the frenzy to get a contract on the property is a race with time. Here in the High Country we are starting to see that scenario once again. Buyers are seeing that there are bargains to be had, and that they need to act quickly to take advantage of that situation.In a hot market, the cream goes quick, and the stuff at the bottom gets a lift too. But the bottom of the market gets to be hard to finance for a couple of reasons.The number one reason that a home is hard to finance is that it is under contract for more than the real estate appraiser can find value. The appraisal may be a couple hundred dollars less, or I have seen them for a couple of thousand of dollars off the contract price. The reason I see this is usually that either the appraiser is from out of town and does not understand the local market; the buyer has asked for too much in closing costs to be placed in the purchase price; or the overall valuation is just not there. These problems are generally fixable.The next reason is that the home is a substandard property. By this I mean that it is either ready for the wrecking ball or maybe it was renovated or under construction and the work just stopped. A little hint, mortgage investors generally do not want to finance these types of homes. They want homes that are ready for the buyer to move right in.This does not mean that there are not mortgages for these types of homes, but the standard mortgage lender does not finance these homes. If you know that the property is a real fixer-upper, you need to get a mortgage that is set up for this. These loans take a bit more work than the cookie-cutter home loans.If you are looking to invest in a fixer-upper, get a mortgage professional involved early in the process. Investigate what you will need to supply the mortgage lender. In a hot real estate market, finding someone to give you a good bid on repair costs may be difficult. Learn your financing options, and then make the decision if you want to pursue the property.For answers to your mortgage related questions, call BOB KIEBER at (970) 262-1199 or e-mail him at Bob is a local mortgage banker and principal of Resort Lending. He has 30-plus years of professional experience in real estate, finance and investments, and is a longtime resident of the High Country.

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