In todays glowing real estate market, homebuyers need all the help they can get to maximize the chances that their offer will be accepted.
Unfortunately, some buyers are held back by the need to base their listings on a home valuation that shows that the home they have bought is worth the amount they are offering for it. You see, home buyers often have to include a contingency rating in their listing. Otherwise there is a risk that a mortgage will not be approved if the home is not approved Rating is too low.
Better has a solution to this problem. Better Mortgage has long been committed to revolutionizing the way people buy homes. This is done through his:
- Fully digital application process
- Toll Free Promise
- Efforts to harness the power of technology to make lending faster
Now the online lender is rolling in Valuation guarantee for clients who are working with a Better real estate agent to buy their homes. The guarantee ensures that an appraisal is no longer an obstacle to applying for a home loan. Buyers now don’t have to worry about their purchase being derailed if the valuation is too low.
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This is how the Rating Guarantee from Better works
Traditionally, a low valuation can make buying a home difficult. That’s because it affects the loan-to-value ratio or the value of the property in relation to the loan amount.
Think of it this way: a lender limits the amount you can borrow to 90% of the appraised value of the home. They are offering $ 200,000 for a home, but the appraisal shows that the home is only worth $ 175,000. That means the maximum mortgage you are eligible for is $ 157,500 and you will need to raise the remaining funds.
Better to change the rules
Better employs more than 14,000 of its own and partner real estate agents. For homebuyers who work with one of them, Better guarantees funding for theirs mortgage at the contract price agreed between buyer and seller. Better this mortgage loan financing is provided even if the final appraisal of the property is found to be lower than expected. And the loan is funded on the terms an unsolicited Better loan advisor has given the buyer in advance.
This allows borrowers to make an offer to buy a home with no valuation risk, as they don’t have to worry about not getting funding if the property’s valuation is lower than expected.
“In this hot market of recent times, up to 20% of the reviews have not reached the clearance price agreed by buyers and sellers. So we have developed a product that offers more security. It is no longer just about ‘a digital mortgage’. ‘ it’s about harnessing our size and digital advantage to create real, tangible innovations like the Better Appraisal Guarantee, “said Emanuel Santa-Donato, VP, Capital Markets & Lead Acquisition, Better.
Make home buying more inclusive
Better hopes that their new rating guarantee will not only make home buying easier, but also more accessible and inclusive for all buyers – especially given the fact that almost 1 in 5 successful offers have waived the rating contingency in the past few months.
Without a Better’s Appraisal Guarantee, wealthier Americans have an advantage. You may not have to worry about securing funding when paying cash. Or they just put more money into a transaction if the house is not valued highly enough. The new guarantee from Better makes sure of that everyone A qualified buyer has the flexibility to make an offer without contingency reviews – not just those who can afford it.
Valuation requirements have historically served to perpetuate discrimination in housing, as people of color have sometimes faced lower valuations of their properties. By eliminating the concern that a home will be underrated, Better seeks to counter this systemic racism that is built into the housing market.
“This is another case where Better has taken the lead in making home ownership more accessible. Broken evaluation policies and practices have limited diversity and have created tension in keeping young people, minorities, LGBTQ communities and others easily in affordable neighborhoods, ”said Jillian White, Head of Collateral, Better. “I took family photos and other identifying items with me when I sold my house because I knew my identity would play a role in the valuation. This is not the American dream we have all worked so hard to achieve.”
With Better’s valuation guarantee, appraisers no longer act as porters to the home. Instead, borrowers agree a purchase price with their broker and can set their loan terms and appraisal value in just 15 minutes.
You will be able to make the equivalent of a cash offer, which could result in up to 50% higher acceptance rates. This could be a determining factor for many borrowers who have struggled to survive in one of the hottest real estate markets in years.
As White said, “Our team at Better spent five years building the first truly digital home ownership platform, and today that dream has come true with the launch of the Better Appraisal Guarantee.”