Sellers, if you are waiting to make a move because your current mortgage is locked in at a very low interest rate and the current rates scare you, here’s an option to help. Lenders offer you a way to “buy” a lower interest rate. This is called mortgage or discount points. In the simplest description, you pay interest upfront to lower the interest rate on your loan.
This option works best for sellers who have built up equity in their home. Those would be people who have owned their home for at least the last 5 years or longer. Home prices have increased greatly since 2019 so even if you haven’t paid much off on your home the market has helped to increase your equity. Another ideal seller to take advantage of this is one looking to downsize from a more expensive home to a smaller one. Using the net profit from the sale of your home, you can purchase points to lower your interest rate.
1 point = 1% of the mortgage amount which lowers your interest rate by .25%
This amount is prepaid interest, so it is tax deductible.
If you are interested in this, first contact me to give you an idea of the current value of your home. Then reach out to your lender for details on the mortgage aspect to see if it could work for you.
Liz Walker Real Estate 