Seller Contributions to Buy Down Your Interest Rate

It's no secret that buyer interest rates have risen substantially over the last 6 months and are likely peaking right here as we end 2022! Ready for some good news? Lenders are working hard to develop programs to help homebuyers bridge the gap with different loan products! I wanted to highlight one in particular today: The Seller Rate Buy Down.

Seller Rate Buy Downs are an option where the seller pays a certain amount of closing costs toward reducing the mortgage interest rate. The buyer benefits from a lower monthly mortgage payment and sellers are able to keep more of their net profits. For home sellers, a rate buy down can be significantly less expensive than reducing their sales price -allowing them to realize a higher payout after closing- and in this unique market where prices have been high, appraisals coming in low is less of a risk.

Bottom Line: Buyer gets a lower monthly payment and Seller keeps more of their equity... It can be a win-win for both parties!

Please reach out to me if you're interested in hearing more about this program and others that my lenders are using to help buyers and sellers achieve their goals in this changing market. I am always here for your real estate needs and the people you care about!

See the graphic above for an example of a Seller Rate Buy Down vs. Price Reduction. Notice the Interest Rate and Principal & Interest change with the rate buy down! Graphic is courtesy of Prosperity Home Mortgage, LLC and can be found on Facebook here.