A trending topic in the Boston condo for sale market is a loan interest rate buydown paid by the seller as a credit in a condominium purchase.
Boston condo buyers obtaining a mortgage can pay a fee (called a “point,” or percentage of the loan amount) to the lender to get a lower interest rate. “Buying down” the interest rate results in a lower monthly mortgage payment. In an effort to entice Boston condo buyers to purchase a home, a seller can offer to cover that fee. Or buyers can include a term in their contract that asks the seller to pay the fee.
The Boston condo for sale market is grappling with big challenges right now. Boston condo sellers are clinging to perceived values for their homes, but recent interest rate hikes and stock market losses are continuously chipping away at buyers’ purchasing power. Sellers looking to give buyers incentives are getting creative with the financing vs. reducing the list price.
How it works: The buyer confers with his or her lender to figure out the loan type and interest rate available. The lender can then tell the buyer how much one or more points would cost, and how much the points can reduce the monthly payment.