Good agents will try to help you get a house for less than asking price, Great agents will help you offer more.
Here’s why:
Putting down $900 extra towards your down payment can save you upwards of $60,000 over the life of your mortgage!
Depending on the type of loan and the size of your down payment, sellers can offer different credit incentives that can help you with your loans or closing costs.
Let me give you an example…
You’re buying a home that costs $300,000 using an FHA loan, which requires a minimum 3.5% down payment. But you go the extra mile and decide to put down 5%, or $15,000. This means you’d need a loan to cover the remaining $285,000. At a 7% interest rate, your monthly payments would be $1,896.11 (a little higher than the average rent, but now you own a home).
Not a bad deal, but what if…
You chose to offer the seller $318,000 and asked them to put the excess money towards a seller credit for you to buy points (meaning you pay your lender a certain amount upfront to get a lower interest rate). You would need to come up with a $15,900 down payment (5% of $318,000) and this leaves you needing a loan to cover $302,100.
By putting the excess $18,000 that the seller gave back to you as a credit towards buying down that 7% interest rate, your new rate would be around 5.51%. This means your new monthly payments are $1,717.19, saving you approximately $60,000 over the life of the loan.
Let’s discuss how we can leverage strategic offers to help you secure your dream home. Contact me today to schedule a consultation.