With a slow real estate market, there often is a focus on price reductions, but both buyers and sellers should look at all types of incentives to get a home under contract. Currently, a popular seller concession is a mortgage buydown program. This involves paying an upfront fee to reduce the interest rate on a mortgage for the first few years of the loan. As an incentive, a buyer can negotiate for a seller to pay that upfront fee. This seller concession can significantly reduce the home buyer’s monthly mortgage payment.
Once interest rates go down, the buyer can refinance their mortgage to maintain a low-interest rate. Ian Jouett (NMLS #320263), President of Louvier Mortgage Group, LLC (NMLS #1013945), explains, “We all are anticipating interest rates to drop some time. If you can get that buy down now for the next year or two, and then refinance when the rates have come down. You might realize a bigger savings than a negotiated price reduction.”
In the end, buyers and sellers want to look at all options when negotiating to get a home under contract, and a mortgage buydown program may be the right answer for everyone.
For information on loans and mortgages, please contact:
Ian Jouett (NMLS #320263)
Louviers Mortgage Group, LLC
Phone: (720) 851-1007
If you have any questions about selling or buying a home, don’t hesitate to contact Chadwick V.R. Williams at Denver Real Estate Professionals. We are happy to be a free resource for all your Colorado real estate needs.
Chadwick V. R. Williams, SRES, CRS, GRI, SRS, Luxury Certified
Broker | REALTOR® | Property Manager