Derek McGowan and Sam explain how buyers can offer more on the house price in exchange for seller credits that lower their interest rate and monthly payment. Both sides win in a competitive market.
Hey, guys, It's Derek. With McGowan Mortgages, we're always looking for creative ways to help our buyers save, especially in the competitive housing market of today.
One interesting thing we've come up with is it's kind of just a strategy. No special loan type here, just a way of working the numbers to make them work both for buyer and seller. Because we get an agreement together, one.
Side can't take the cake.
You have to kind of meet in the middle a little bit.
But here's what we've come up with. On an average, three or $400,000 house, if you were to, say, offer $10,000 more, now that sounds crazy, but in today' world, that's happening. That would be about a $50 more monthly payment. But in exchange, what if you did pay? Sellers will. They will pay that $10,000 more that you're looking for.
In return, give me 1%. So three or four grand back in.
Seller credits to apply to my interest rate. So that extra $50 a month for that extra 10 grand you're offering them is the exact same $50 a month.
You could use that 1% or the.
3 to $4,000 of credit down to pay down your interest rate. And that would also reduce your payment by $50 a month at the end of the day. Buyer, you pay 10 grand more for the house. Yes. That lets you get the house. In today's market, the sellers give you that 1% back in credits apply to your interest rate. That would drop your rate about a quarter percent, about 0.25%, and that'll save you $50 a month on the average home loan.
You notice no difference on the payment.
And that might be the concession you.
Have to make to get an offer.
Accepted in today's crazy housing market. Sam.
