Goldman Sachs last estimated that 57% of all residential home sales this year were cash sales. That’s compared to 19% in 2005.

Why are almost a majority of homes today being bought with cash? There are a few likely explanations. One is that investors are buying homes with cash from the sale of another property. Another reason mentioned in the article (link above), has more to do with the mortgage loan industry. That is, it’s harder to get financing and getting a mortgage costs more.

After the housing crisis in 2008, the government stepped in and created new laws to help prevent another crisis. One side effect of the laws is that there are more requirements, which adds extra time and complexity to getting a mortgage loan. Before the crisis, most mortgages were done by big banks like Wells Fargo and Bank of America. Today, says James Cahoon of Utah’s Veritas Funding, that is shifting to regional lenders. The reason? Local lenders can be more efficient and offer competitive prices.

Timing is especially important when you’re building a new home. “A local lender can reduce the turn time on most loans, which is especially important for new construction. Our turn times are 24 hours. If we get a complete set of documents, we can close within 7 days, definitely inside of 2 weeks.”

What if you want to build a new home?

Getting a construction loan is different than other loans. There are more deadlines to meet. Every home builder has their own contracts and way of doing business. That’s why it’s helpful to work with a lender who is familiar with your homebuyer. Veritas has teamed up with Ivory Homes to address this need. “We know what Ivory puts in their contracts and we understand timelines and deadlines,” says Cahoon. In addition, they have a panel of appraisers that know Ivory and new construction. What does that mean for buyers? “The appraisals are more consistent and reliable.”

Credit Scores Matter.

Lenders like Veritas need to see credit scores at a minimum of 640, but love to see buyers with scores in the 700s and up (you can check your score at www.freecreditreport.com). Even if your credit score isn’t there yet, you can still benefit from talking to a consultant. They’ll give you tips and even a plan to improve your credit. If you need more assistance, Ivory Home Financial Fitness offers a more customized program to help you get ready to purchase a home.

Should you wait and save for a downpayment or take advantage of low interest rates now?

Some buyers are tempted to wait and save more cash for a down payment before buying a home. While that sounds logical, it may not be the best choice. Even though rates are up from the historic lows they were earlier this year, they are still low. Cahoon says, “rates are still really compelling. In the 4s and mid-4s, it is still really cheap money.”

Home prices are going up too, which means the longer you wait, the less home you may qualify to purchase. This makes a strong case for buying sooner. In addition, you don’t always have to have any cash to put down on your home. Programs such as a VA loan or the Utah Housing program require nothing down.

How can you prepare to buy a home this year?

Cahoon says you should sit down with a mortgage consultant since each person has a unique situation. It’s a free consultation and chance to find out what you can qualify for.

So if you’re thinking of buying but can’t afford to pay cash, take the first step. Meet with a mortgage consultant and find out where you stand.