How to Lower the Interest Rate on Your New Home Loan
Sky Freeman recently spoke with Keith Henderson from AmCap Home Loans about how to get the best rate and the best loan product for you in today's very different housing market.
1. Interest rates are topping 5%
Interest rates are now topping five percent and that's really changing what people are wanting to spend, what they're qualifying for and how that affects their payments. But, as Keith explains, there are different ways to be able to finance homes that can get you the lower payment that you need. One of these methods that has been very successful is called the Seller Buy Down.
2. What is a Seller Buy Down?
This method allows the seller to actually buy down the interest rate of the buyer. The benefit to the seller is not having to substantially lower the price of their house. From the buyer's standpoint, it gives them a much lower interest rate. It could be as much as one point lower than what we're seeing in interest rates. This would make a tremendous amount of difference in the monthly mortgage payment.
3. Is a Seller Buy Down difficult to do?
This can be accomplished very easily. And best of all, it meets the buyer and seller in the middle. The buyer still gets the payment that they are looking for, and the seller doesn't have to take a tremendous hit. It truly is a win-win situation.
4. How much of difference can a point make?
When you look at a 30-year mortgage and you're reducing the payment by $50 or $100 for 360 months. That's a total of $18,000 - $36,000 over the life of the loan. That makes a tremendous amount of difference for the buyer. Yet, from the seller's standpoint, instead of lowering the price of their house, they can actually pay less money and successfully sell their house for a higher price.
If Keith Henderson can help you with your loan and mortgage needs, please give him a call at (972) 814-9591