New homeowners often worry about cash flow, especially when it's time to move into their new home. This stress is even more heightened when the buyer is moving out of their existing home they are still trying to sell. Now instead of one house payment each month, they may worry about two.
The decision to purchase another home before the existing house has sold is definitely not an easy decision to make. So what happens when the buyer has found the next home of their dreams and they haven't sold their current home? They stress about selling their existing home before making an offer and they also stress about losing the opportunity to buy their dream home to somebody else. Sitting and waiting for their home to sell while monitoring the activity on the dream home is be enough to lose sleep over. A common solution is to write a contingent offer, but this method doesn't guarantee the seller or the buyer anything. An innovative solution from First Horizon Home Loans is The Interest Abatement Program. It's designed to minimize the associated stress of paying for two mortgages each month for a temporary period.
With The Interest Abatement Program, the homeowner receives an interest free mortgage payment on the new home for a period of 3 to 6 months. The reduced payment now improves the homeowner's monthly cash flow and affords them the benefit of:
Less stress about making two full mortgage payments
Interest free payments on the new loan for 3 to 6 months
Pay only principle and escrow during the first 3 to 6 months on the new home mortgage
Receive up to 7 more months to market their prior home before full payment begins on the new home
Able to buy their dream home before someone else does
So here's how it works, the interest portion of the monthly payment can be paid from seller or builder contributions as a creative, money saving solution. Here's an example on a $250,000 sales price with a loan amount of $200,000. The new principle and interest mortgage payment is $1231, but the buyer only needs to pay $189 per month. The cost to the seller or builder to place the buyers into their dream home is 
approximately $6200. It's a win win solution for everyone.
This program allows Realtors & builders to place more homebuyers into a home that may have otherwise faded away because of cash flow concerns. Contact me if you would like to discuss this program further, I would truly appreciate the opportunity!
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