how to get a great interest rate

January 26, 2008

With interest rates so low, why would I be recommending that you go for the lowest rate you can almost think of when buying a new home? If you are ready to buy a home, you likely think the best thing to do is to make a 'lowball' offer on the house. In some markets, like the Pacific Northwest, that just doesn't work very well. Our market is too strong so far. But if you really want to save actual money, like over $100,000 on a $400,000 home, do this: Ask the seller to 'buydown the interest rate' for a period of time. They can buy it down for 5 years, 10 years, or the whole time. Another great way to save money is to combine having the sellers buy down the rate while getting a 15-year loan instead of 30. You can save almost $200,000 over the term of the loan, reduce your loan balance extremely quickly and have a low payment to boot. Right now it is relatively inexpensive to buy a 15-year loan down to 3.5%. I'd say that was pretty darn good, wouldn't you? If you would like to talk about this option and then start looking for a home, let me know at 1-800-346-9236.

Barbara Blowers