Unpacking the Benefits of Builder Incentives and Smart Financial Choices
The Buying Down Incentive: A Strategic Approach
Today, we’re tackling the topic of homebuying incentives, specifically the “buying down” option. While some may gravitate towards haggling with builders for a lower home price, we’ve crunched the numbers to present a compelling alternative. A closer examination reveals why using incentives wisely can lead to more favorable monthly payments.
Numbers Speak: Opting for Interest Rate Buy-Downs
Imagine this scenario: negotiating $5K off the home price, while your interest rate remains steady at 6%. The savings, in reality, amount to a mere $30 per month. A more astute choice lies in paying full price for the house while requesting a reduced interest rate – an action that yields significant rewards.
Pricing Matters: A Practical Example
For instance, consider a $300K home with an interest rate of 6%, resulting in a monthly payment of $1,656. Should you aim to lower the home price to $295K, the payment drops to $1,768. However, opt to pay the full $300K but negotiate a reduced interest rate of 5.25%. This decision remarkably trims the monthly payment to $1,656, outshining the $1,768 option.
Strategizing with Professionals: The Key to Success
Holly and I highly recommend consulting professionals in the field – namely, your lending institution and broker. These experts possess unparalleled knowledge to guide your financial choices. While we’re always happy to assist, lenders can tailor recommendations to your unique situation.
A Meaningful Impact: The Power of $112
It’s worth emphasizing the significance of numbers. By optimizing your buying down incentive, you stand to save over $112 per month. This impressive sum could undoubtedly find better use in your monthly budget.
Parting Thoughts and Upcoming Plans
Before we sign off, remember that every detail count. The art of buying a home is a delicate balance and leveraging incentives wisely can work in your favor. We hope you’ve gained valuable insights from today’s discussion. Feel free to reach out for personalized guidance or consultation. Your journey towards homeownership is a partnership, and we’re thrilled to be a part of it. Until next time, take care and stay tuned for more updates!
For the past 50+ years, Cannon Builders has been a family-owned company providing new construction on residential structures. Our custom-built houses in Warren County and Lincoln County, MO prioritize quality workmanship with a wide array of home styles to fit the diverse desires of homebuyers. All our communities in Wright City and Troy qualify for the United States Department of Agriculture (USDA) Guaranteed Rural Houses Loan Program, making homeownership attainable for many more residents. Our company is located in the St. Louis, MO metropolitan area, and we are proud of our history as dream home providers.