Worried About Higher Interest Rates? Here's the Solution...
If you're worried about higher interest rates and want to buy NOW but would prefer to wait till they go down, I have the solution!
Take a house in today's market that's listed for 250k. Right now, with higher interest rates, a lot of sellers are accepting offers lower than list price, because sellers need to compromise with buyers to make up for the higher & rising rates.
Now, when offering lower than list price, there are two options:
1.) Offer lower than list price, with no seller concessions (House is 250k, offer 240k)
2.) Offer list price with a seller concession (House is 250k, offer 250k with 10k in seller concessions)
Usually, concessions are used to lower cash to close, so if your normal cash to close is 20k but you get 10k in concessions, now your cash to close is only 10k! But most people don't know that concessions can also be used to buy down the rate! Also, you can divy up concessions to be used to buy down the rate and reduce cash to close! For example, if you have 10k in concessions, 5k can be used to buy down the interest rate and 5k can be used to reduce cash to close.
Take a house at 250k. If you offer 250k with 10k in concessions, and use those to buy down the rate, your payment would EASILY be lower than if you just offered 240k with no seller concessions! THIS is the best route to take in today's market. The cool thing is I can fight to get you even MORE concessions after the inspection, and you can use those concessions however you want, like I mentioned earlier.
Take a house at 250k. The seller's bottom line is 240k, so you offer 250k with 10k in seller concessions up front, and you get the house! Then you get an inspection, and the house needs 5k worth of repairs. You now have 15k in concessions, then you decide to use 10k to buy down the rate, and 5k to reduce closing costs. BOOM, you've just bought down the rate significantly, while also covering the cost of the repairs.
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