But as a home builder let me warn you it's a big pill to swallow.Good luck!

He then told me because of this, he's going to have to reduce the price by $4k, to go back to the family and tell them of the price reduction and see if they're still interested.

Again, these loans are for the banks largest or better customers, somthing small investors won't have to worry about.Individual hard money lenders may partner in deals as well, for the same risk reduction benefits, but they will probably charges as mush as the market will bear.

And we're talking a reduction of almost 2% of the loan potentially for the interest optimization-although the second makes it hard to calculate precisely. 

Less cash flow, but much better debt reduction.

So, $450 in car payment reductions, allows you another $450/mo in mtg payments, or approx another $90k......assuming this doesn’t bump your “front end” DTI of the mtg payment only, above 36%.

Taking the 30 year gives you the option to accelerate debt reduction if desired while also giving you breathing room for the unexpected.

You coming in with a low ball offer might be a tough "sale" because of the multiple reductions already.I'd attempt to feel out how firm the seller is on price by asking how much interest there has been and if another price drop was on the horizon.

I canceled a home that is just 1 year old told the home owner not to price it too high. 3 price reductions later(still too high if wanting to be filled) there are 0 callers. 

If you start out using them, then it won't be a bitter pill.