With housing inventories in many markets on the rise, it's not unusual for sellers to offer buyers incentives ranging from paying their closing costs or homeowners association dues to free gardening and pool cleaning services. Many buyers aren't swayed by such offers. What they are looking for is a reduction in asking price. So sellers are dusting off an old tool from the days of high interest rates that can give buyers a break on their mortgage payments: the interest-rate buy-down. By agreeing to pay lenders extra points up front, sellers can secure thousands of dollars in savings for buyers, equivalent to a much larger reduction in asking price. For about $18,000, a seller can permanently buy down the interest rate of a $450,000, 30-year loan a full percentage point, shaving $289 a month off the buyer's mortgage payments, said Joe Carroll, of Metrocities Mortgage. That assumes a 10 percent down payment on a $500,000 home, with a 6.5 percent interest rate before the buy-down. In ...
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