Today’s interest rates are grabbing headlines, but there are steps you can take to make your next purchase more affordable…
1. Choose a 30-year Mortgage
To reduce your monthly mortgage payment, consider financing your purchase with a 30 year mortgage. Increasing the term significantly reduces your monthly obligation. And since Coastal Credit Union does not charge pre-payment penalties, you can pay more when you can, effectively reducing your loan term.
2. Request Lender Paid PMI
Private Mortgage Insurance (PMI) is required on mortgages involving less than a 20% down payment. Request Lender Paid PMI to eliminate the PMI payment and potentially reduce your mortgage payment. This move can also lower your tax liability if you itemize your deductions, as PMI is not tax-deductible, but mortgage interest is.
3. Choose a Variable Rate Mortgage
During periods of high interest rates, opting for a variable or adjustable rate mortgage (ARM) can offer a lower initial rate and the potential to benefit from lower rates in the future.
4. Buy Down Your Rate
Did you know that you can buy down your rate by paying Points? This can be a wise choice if you plan to stay in your home for an extended period.
5. Ask the Seller for Help
As inventory increases, and buyer activity slows, sellers may be more willing to assist with closing costs.
6. Buy a Smaller Home
Choosing a smaller home can result in a lower sales price, reducing your monthly payments while still allowing you to live in your preferred area.
7. Expand Your Search Area
You’ll pay a premium to live in a desirable area. By expanding your search area, you can find suitable homes offered at lower prices. Remember, real estate’s value is greatly influenced by its location.
8. Get a Gift from a Relative
Consider asking for a gift from a close family member to buy down the rate (#4) or reduce the loan amount. The gift must have no strings attached and cannot be a loan. What could be a better gift than a home of your own?
9. Explore Government Programs
Some government programs offer down payment assistance and/or tax reduction opportunities for homebuyers. For example, the Home Advantage Tax Credit (HATC) from the North Carolina Housing Finance Agency can convert a portion of your mortgage interest into a tax credit. Learn more at daymarkrealty.com/mcc.
10. Work with a Daymark Agent
Your Daymark Realty agent is backed by Coastal Credit Union‘s nearly 60 years of financial experience. In addition, buyers receive $500 cash at closing! Visit daymarkrealty.com/advantage to learn more.