Reducing interest costs on mortgage

[Phillip Batten]

A family friend may be offering to sell their home to me at a below market price. Are there any financing options/strategies that could be available to me to reduce the overall interest costs given the recent rise in rates? I’m sure this family friend seller is locked in at a much lower rate than what’s available today on new loans. Is there any way to creatively leverage their loan to reduce the overall interest costs on a new loan for me?

[Andrew Garcia]

Hi @Phillip Batten, there are a few ways to get a lower interest rate.

1. Pay points to buy down the rate.

2. Get an ARM. Adjustable rate mortgages have lower initial rates. A hybrids ARM would probably be best.

3. Subject-to. You assume their mortgage payments for them.

4. Interest rates have actually gone done from a couple months ago. If you are looking for an FHA or VA loan, you would be right around 4% with no points.

Hope this helps! Let me know if I can be of any assistance.