Buy down points when you buy your next home...

An agent I know wrote this post, and while the numbers can vary on a case by case basis, the concept is 100% accurate. Buying down points saves far more money, unless you only own the home for a short time. Well said...

"Everyone likes to save money. But when it comes to buying a home, we often miss the opportunity to save the most.

Unless you are paying cash for your new home, then the most important item is not the home price, but the payment. You qualify for a monthly payment amount, which determines your purchase price ability. The higher the interest rate, the less house you can buy.

Car dealers understand this. They try to avoid talking about the price of the car, but instead always want to talk about the monthly payment amount.

So today lets talk about saving money when you buy a house. You can buy a $400,000 homes and negotiate it down to $388k, which saves a little on the payment. But paying $400k with $12k to buy the rate down can save you far more per month, 3 to 4 times as much in many cases. You could save thousands per year, add that up over 10 years and it could be $40k, 50k, 60k or more. Which is the smarter thing to do. And that savings is all interest, which means paying more to principle which means more equity in 10 years as well.

So why don't more people do this?

Builders have offered lower rates as long as I have been in real estate. Lenders have had the ability to do this since I have been in real estate. So why have so few buyers of resale homes bot taken advantage?

It is on us as agents. Unfortunately I have found that most realtors don't understand this concept, or choose not to talk about it (no idea why). We could help our clients save money, or buy a more expensive home for the same payment. This is the absolute definition of helping our clients.

So what can we do? Call your favorite lender today and learn how to make this work, what the savings are, and make it part of your buyer presentation. Most buyers would take advantage of this, if they knew about it. So lets get out there and educate."

Well said, and I agree that this helps so many buyers. If you don't understand the numbers, or how to present it to clients, message me and I will walk you through it. Have a great week.