By KIMBERLEY HAAS
Guild Mortgage has launched a national program that can help potential homebuyers compete with all-cash offers.
Vice President of Product Strategy Erin Watts said in a recent interview with The Mortgage Note that they are doing everything they can to help homebuyers compete in today’s market.
“We were getting these really well-qualified homebuyers that needed to get mortgage financing but they just kept missing out due to these cash offers,” Watts said.
How does CashPass Work?
When homebuyers apply for a loan with Guild Mortgage, they let them know they are interested in CashPass. They then provide the same information that they would need for pre-approval for a conventional loan.
A minimum credit score of 680 is required.
If approved, the loan officer provides potential buyers with a CashPass certificate when they make an offer on the home they choose.
Watts explained why they are confident taking this risk to get people into a house.
“We have an internal review committee and we’ll look at that property and we have valuation tools to give us a good risk perspective of that property to make sure that when we do order an appraisal, it is going to come in line with what we think it will,” Watts said.
CEO Mary Ann McGarry said with less inventory, sellers are getting multiple strong offers.
“In this competitive housing market, Guild recognizes the need to help level the playing field for our clients who aren’t able to make an all-cash offer on their own. Guild’s CashPass program helps homebuyers make a more competitive offer that can be vital to winning when a seller is faced with multiple bids from which to choose. It’s one more thing we are doing to help deliver on our promise of home,” McGarry said in a statement.
There has been a rise in investors and companies buying residential homes, driving the need for all-cash offers.
A May report by the National Association of Realtors shows that companies, corporations, or limited liability companies made up 13% of the residential sales market in 2021.
That was up 11.8% from 2020.
While nominal home prices are increasing everywhere, growth is most pronounced in Florida and metros affected by migration out of California, according to Ed Pinto at the AEI Housing Center in Washington, DC.
Cape Coral in Florida has seen the biggest year-over-year home price appreciation at 36.9%.
North Port in Florida came in this May at 33.1%. Raleigh, NC, saw 28.4%, while Tampa, FL, saw 26.3%.
Miami, FL, had 26.1% year-over-year home price appreciation.
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