Hello everyone, looking for creative ways handling closing costs, to help future buyers that i may come

Asked by Ron, San Diego, CA Wed Mar 5, 2008

across whom may have trouble financially.

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fredeckert, Agent, San Diego, CA
Thu Mar 6, 2008
An interest rate buydown strategy would be useful. Most lenders might agree to the seller paying up to six points towards closing costs for the buyer. Points can help the buyer in many ways. For example: if the buyer's debt to income ratios are out of limits, with lower fico score problems, points can lower the interest rate of the loan to help the buyers qualify, buyers may be eligible for better loan programs, points may help if the buyers have down payment issues etc. One point equates to about a 1/4 percent reduction in the interest rate, so four points would mean about a 1 percent reduction in the interest rate. Points can be used to help the buyer with closing costs such as title and escrow too. One point is 1% of the loan so on a $500,000 loan, one point is $5,000, two points is $10,000. It might make tremendous sense for a seller to offer 4 points to the buyer, rather than haggle over an offer that is $50,000 lower than the seller wants. The property still has to come with a decent appraisal. To make this strategy work, you have to explain, in writing, what the buydown means, to everyone involved. See the link below for more ideas on seller incentives. Let me know if you want to discuss this in more detail.
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Daniel Lehman, , San Diego County, CA
Fri May 20, 2011
Hey Ron,

If it is debt to income thats one issue... If you are JUST asking about closing costs, the absolute easiest way to go about it is to have the seller pay closing costs... Negotiate it into the terms of the contract...

It might take a higher offer, but as long as it appraises, you are good...

(ie: 100K price with 6K closing costs might be an offer of 106K with 6K closing costs paid by seller)
Web Reference:  http://www.lehmangrp.com
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