South Bend Home Loan

Wednesday, March 29, 2017

How To Win In A Bidding War

It's practically an epidemic in our current housing market.  A buyer finds a house they really like - one that's only been on the market for a couple of days many times - and they make an offer only to find out that there are other offers on the table and theirs isn't the winning one.

It's a rotten situation.  It's even worse when it happens multiple times, which has been the case for a lot of potential home buyers in Michiana.

What if I told you there was a mortgage loan option that would make your offer better and help you to win in this tight market?  There is, and it's called the Ruoff 3 for 1 Program.

What is the Ruoff 3 for 1 Program?

You're going to love this loan option.  The Ruoff 3 for 1 Program is a conventional mortgage that eligible buyers can use and only put 1% down on the purchase of their home.  That's right.  Just 1% of the price is needed for the down payment.

Tell me more.  But first, what do you mean by 'Conventional Mortgage'?

Before I break down the details of the 3 for 1 and how it will make your offer better, let me clarify what I mean by 'conventional mortgage'. In a nutshell, there are two basic types of mortgage loans, government insured loans and conventional loans.  Government insured loans typically offer extra flexibility so they're a good fit for some people but that flexibility comes at a cost of higher fees and/or mortgage insurance being charged for the life of the loan.

If you don't need the flexibility they offer, it's better to skip the extra costs and just go with the plain-vanilla conventional loan.  To learn more about why I prefer conventional for most buyers, click here - Why I (almost) Always Recommend Conventional.

So Who Can Buy With 1% Down?

Conventional loans typically require 5% down but we've had an increase in 3% down options coming on the market lately.  The Ruoff 3 for 1 Program technically is a 3% down option too.  In this case, though, 2% of that 3% down payment is paid by Ruoff, leaving only 1% to be paid by the home buyer.

Let's take a minute to hit the high points on what is needed to qualify:

  1. Credit score - A 680 minimum credit score is needed.
  2. No first time buyer requirement - You do NOT need to be first time buyers (yes!). However, you can't own another house at the time of the loan closing and you will need to take an online home buyer education class.  Don't worry.  It's not hard.  
  3. Purchases only - This is for a purchase only (not a refinance of an existing loan) and that purchase has to be of a single family home.  No rental properties, duplexes or manufactured homes are allowed.
  4. No minimum personal investment or savings required - While you need 1% down, it can be a gift from a family member if needed. This loan also doesn't require any level of additional savings like some loans do, making it even easier to qualify.
  5. Some maximum income limits - Some areas have a maximum income limit meaning that you can't make more than the HUD median Income for that area or you won't qualify.  About 1/3 of our market has no income cap while the rest has a current cap of $52,900.  To see if a cap applies to the house you like, go here - Property Lookup.  

One key thing to know about the income cap - it only applies to the borrower on the mortgage and not to the household.  If there are two people buying a home together and combined they make too much money but alone one of them makes less than the cap, we can look to see if that person qualifies alone so they can use the program.  Both people could still be on the deed to the house in this situation.

So How Does This Make My Offer Better?

I'm happy to explain!  First, the fact that this is a conventional loan makes a difference.  All things being equal, most sellers feel more comfortable with a conventional buyer.  The general impression is that a conventional buyer has a stronger financial picture and will be more likely to close.  Also, conventional loans have lighter property requirements which make sellers more comfortable.

The best way to use this program, though, relates to seller concessions.  It's a common thing for buyers to ask a seller to help cover closing costs on a purchase.  Buyers typically ask for this because they are using their savings to cover the down payment and can't cover both.  If you only need 1% of the price for your down payment though, you can likely cover your own closing costs instead of asking the seller to cover them.  This makes your offer look better when compared to another buyer who is asking for seller help.


Of course you're interested!  While Ruoff's 3 for 1 Program isn't a fit for everyone, it's a fit for a whoooole lot of people who are ready to buy now and quit playing the 'someone beat us out' game.  If you'd like to dig deeper to see if this program could help make your offer the winning offer, drop me a line at or give me a call at 574-234-5201.

To learn more about low down payment options or any other aspects of home financing, contact Lori Hiscock at  

Lori Hiscock is a Sr. Loan Officer at Ruoff Home Mortgage‘s South Bend office.  One of Michiana’s top mortgage loan officers, Lori started her lending career in 1995 after obtaining her bachelor’s degree in Finance from Western Michigan University.  You can connect with Lori Hiscock or apply online here. NMLS#404320.
Ruoff Mortgage Company, Inc. is an Indiana corporation licensed by the Indiana Department of Financial Institutions (DFI) and operates with the following licenses:

Indiana-DFI First Lien Mortgage Lending License #10994;
IL Residential Mortgage Licensee #MB.6760734;
Michigan 1st Mortgage Broker/Lender License #FL0017496.
Ohio Mortgage Broker Act License #MBMB.850220.000

The Florida Office of Financial Regulation License #MLD1182