Here's How To Pay Less for Homes Today

By Dar Walden

Dar Walden and her team are ranked #1 in the state of Alaska! She is ranked in the Top 500 Real Estate Marketers of the Year by the National Association of Expert Advisors (out of 1,216,382 agents)!

This week we’re going to talk about the different options for buyers right now. If you’re a buyer, it may be a little bit depressing out there with the interest rates going up, and your buying power may have been reduced because of that. We’re going to introduce you to a couple of different loan programs that might help you out. 

The first one we’ll talk about is one that we’re seeing quite a bit right now. That’s the 3-1 buydown, 3-2 buydown, or 2-1 buydown, depending on what you and the seller agree to. That’s where you ask the seller to help you reduce your interest rates during the first year to two years of the loan. You might get them to reduce by 2% the first year and 1% the second year or 1% and 1%. This will help reduce your payment and help you through the shock of the higher interest rates. By the time you get done, it’s going to be 2 to 3 years. Hopefully, the interest rates have been reduced, and you can refinance. If they haven’t been reduced and gone up, you’ve got a bargain, and you’re doing good.

The big thing is a lot of buyers have stopped and put everything on hold, but if you’re renting a home, 100% of your monthly payment right now is going to pay your landlord’s monthly mortgage payment. So you’re getting nowhere as a renter. As a buyer, you might pay a bit higher interest rate to start with, but there’s always the opportunity to refinance it and get a lower interest rate. And if the interest rate goes up, as I said, you got a bargain.

The other type of loan you might qualify for is an FHA, where you only need 3.5% down. That’s one of the lower interest rate ones that you’re going to get out there. And then the other one is the VA. You have to qualify for a VA with prior military service or military affiliation. Your lender can tell you if you qualify for it. With a VA loan, you can often do zero down. In the contract, you have to get the seller to agree to pay your closing costs. The other option out there is the RDA loans. Now those are rural development loans, so they’re going to be specific to areas. Only some areas qualify for RDA loans, but your lender can help you with that.

If you are looking to buy and you’ve been sitting and not doing anything, give us a call and let us walk you through some options, and maybe we can find one that fits you.