When purchasing a home, buyers are often looking for ways to save money. One way to do so is by asking the home seller to provide a concession that can be used to buy down the mortgage interest rate. This can be a win-win situation for both the buyer and the seller.
To start, the home buyer should do their research to determine the current mortgage interest rates and what they can afford. They should also determine the amount of concession they would need to obtain the desired interest rate. Your Realtor and Mortgage Loan Officer should be able to give you this information.
Over the last year, the mortgage rates went up quickly which made the cost of home ownership more expensive. While home prices are about the same, the monthly payment is more expensive. Asking for the concession may allow you to buy down the interest rate which could save you hundreds of dollars each month.
Most people think of seller concessions usually being for home repairs but a seller can agree to a concession for any reason including to buy down the mortgage rate of the buyer. If you think the home will appraise for enough, you could actually offer above the asking price so the seller can still get the money they were hoping for.
In conclusion, asking a home seller to provide a concession to buy down the mortgage interest rate can be a smart financial move for home buyers. buying down the rate will help the buyer save a lot of money and it allows the seller to get the home sold. It’s a win/win.
If you are looking to buy or sell a house in Northern Colorado, reach out to Andy Hawbaker for more ways to get creative in buying or selling Northern Colorado Real Estate.