As they say, there's more than one way to crack an egg. The same is true when buying a home—there's just more math involved. That's where your loan officer comes in! They can provide you with different options so you can get the most from your savings. When you're ready to choose, keep in mind how long you plan to live in the home as that will be a major factor in your decision.
Find Out the Seller's Goals
Work with your realtor and the seller's goals (quicker closing? Rent back provisions? Foregoing repairs?). This way you can come to an agreement you both are happy with. Who knows, you might also end up better off than you thought you'd be and everyone wins.
Permanent Buy Down
You don't have to accept a high interest rate. Your lender can help you use your money wisely to meet your home buying goals. Sometimes, that's putting the money you saved partly towards the down payment and partly towards buying down your interest rate. It's a bit like prepaid interest. Your lender gets an upfront payment and you enjoy a lower interest rate and save money over the life of your loan. This can be a great option if this is the last home you plan to buy or you'll stay for several years.
Lower Monthly Payment
Sometimes cash flow is the priority. Housing payments are expensive, so keeping your budget in mind is important. Usually, this means putting down at least 20% on your home so you don't have to pay private mortgage insurance (PMI). But you do have other options! Using your savings in different ways can get you a lower monthly payment, but don't forget to look at other mortgage types as well, such as an adjustable rate mortgage (ARM). Ask your lender to help you determine the best fit for you.
Rent Back Provisions
In this scenario, the seller will sell you their home, but they will continue to live in it and pay you rent (since you now own the home) for an agreed upon amount of time. If you're renting, this gives you a chance to finish your lease and avoid paying hefty fees to move out early. This also allows the seller more time to buy their next house so they don't have to move twice.
WaFd Bank Is Here to Help
Our loan officers are here for you, and they're also good at math! We'll crunch the numbers for you to make sure you can get the most out of your home savings, whether that's buying down your interest rate or putting all of it toward your down payment. WaFd Bank is also a portfolio lender, which means we'll never sell your home loan and you'll always know where to go with questions or help. Give us a call at 800-324-9375, visit your neighborhood branch, or find a loan officer ear you to get started today!
All loans subject to credit approval.