Home Buying in 90212>Question Details

pattymatt2003, Home Buyer in Los Angeles, CA

interest rate on buyer loan not to over 4.5%

Asked by pattymatt2003, Los Angeles, CA Wed Mar 20, 2013

I saw a counter offer that seller ask the interest rate of buyer's loan not to be over 4.5%. I am wondering why the seller care the interest rate of the potential buyer's loan. Thanks for the advice.

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9
That is just boiler plate filler on the purchase contract. It's mostly meaningless.
1 vote Thank Flag Link Wed Mar 20, 2013
Not normal. Best next action is to ask a local Mortgage Broker by clicking "Find a Pro" in the main menu at the top of this website. http://www.naplesrealestateguys.com/
0 votes Thank Flag Link Fri Apr 12, 2013
rates are entirely up to the bank and your credit, my credit was pretty low while I did get approved up to 600k, my rate was horrible 4.5%! I would consider checking your credit and getting in touch with a company to help you. My advice, go to http://www.thelendersnetwork.com speak to someone that knows their stuff and if you need to get your scores up they can do it, they also got me a pre approval while they had someone get my scores up over a 640...
0 votes Thank Flag Link Mon Mar 25, 2013
Dear Patty,
The seller are always concerned about the buyer's loans. They want to make sure the buyer can complete the sale even if the interest rates increase before the loan is locked in. The interest rate section is part of the contract (pre printed) on the form.4.5% is high compared to what current rates are.(3.5 or lower)
0 votes Thank Flag Link Thu Mar 21, 2013
The terms of the loan may not have been filled out at all on the purchase contract, and as a listing agent I always make sure that the terms are there and within reason, or else the buyer can back out for any reason. If the terms were left blank, I will always counter with a rate bumped up a half to a full percentage point above prevailing rates that day. It may seem like a minor thing, but if nothing is put in the rates, then it's basically a crap shoot for both the buyer and the seller. Hope that might shed some light for you.
0 votes Thank Flag Link Wed Mar 20, 2013
The seeler is looking out for the buyer and may also have an alternate relationship with other lender that they may want you to also explore.

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Start the process right 1st by talking to a Licensed Mortgage Professional to determine who much home you can afford and whether you are credit wordy and is there an ability to repay the loan.

The Mortgage Professional will give you a conditional approval letter to take to the realtor.

Once the realtor has found your home you should get it inspected to determine if it’s structurally safe (have the realtor recommend one locally) and be sure to ask your realtor to negotiate a home warranty paid by the seller.

Now is the time to determine and negotiate you rate and terms with the Loan Officer who is responsible to order an appraisal that you will be responsible to pay for prior to the arrival of the appraiser.

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0 votes Thank Flag Link Wed Mar 20, 2013
4.5% is actually a higher rate right now... so the seller wants to be sure that the buyer will have to perform even if his interest rate is that high.... AHHHH tricky!

Ron
0 votes Thank Flag Link Wed Mar 20, 2013
This provision gives seller assurance that the buyer will not cancel transaction based on the fact that buyer was not able to secure purchase loan at at low interest.



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0 votes Thank Flag Link Wed Mar 20, 2013
The buyer might have had a lower interest rate placed in the offer and the seller raised it to better the chances of closing in the seller's favor
0 votes Thank Flag Link Wed Mar 20, 2013
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