Monday, October 16, 2006

Home Sellers Providing Incentives

The increasing inventory of available homes for sale has forced many sellers to reduce the asking price of their homes.

An alternative approach to reducing price is to pay down the interest rate a potential buyer would pay. This is called a buydown and it is typically cheaper to do than to reduce the price of the house.

A buydown is a type of financing where the buyer or seller pays extra points to reduce the interest rate on a loan. Buydowns make it easier to qualify for a loan because they lower a loan's interest rate. They can also allow you to buy more house for your money.

Sellers benefit from assisting with a buydown by increaseing the buyers ability to qualify for a loan, therefore, allowing the home to be sold quicker.

No comments: