Creative financing in todays market

[Lauren Seeley]

Hi! My fiancé and I just signed a contract for a new house. We are planning to put 20% down and looking for the best option to save us long term knowing todays high interest rates. We unfortunately would likely need a jumbo loan due to the cash needed to get to the conventional loan. Do you recommend we pay the point to lower the interest rate? Are there other creative financing options?

Thank you!

Lauren

[Jason Wray]

Lauren,

Why 20% even Jumbo's you can put between 10-15% down some programs have no PMI options as well. Rates are going to continue to drop based on current data and FED trend so I would weigh buying the rate down and avoid any prepayment penalties. If you can get a seller credit it might be worth using it to buy the rate down as long as your recoupment period is not longer than 36 months.

Typical buy down is 1.00% 1 point usually giving you a .25% rate discount

Example $1.5M x 1% =$15K to buy down rate .25%  saves you $3,750 a year on $1.5M x 3 years $11,250.00 in 36 months you still have not recouped the $15K.  It does save you $312.50 a month.

Have you looked at other programs depending on your profession there are also 100% no money down loans. Anyone with a Medical degree can get 100% financing up to $1M and 5% down for up to $1.5M No PMI.