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"Interest Abatement" for new homebuyers --- what do you think?

By
Mortgage and Lending with MetLife

As a variation on a theme to help affordability with a home purchase, this is an FHA approved program where the home seller pays a fee to the lender of 3% at closing and the lender directly applies it to the interest payment for six months. So, for the first six months, the new homebuyer only has to pay the scheduled principal, taxes, and insurance. On a $200,000 home, that represents a $1,000 smaller payment for the first six months - interesting! Now the buyer has to qualify at the full payment but for buyers on the fence, that could help with lease payments that they may still be under contract for, reduction of other bills that they could significantly reduce or eliminate or give them the opportunity to build a savings cushion, buy the furniture they would have charged, or do necessary repairs or renovations without dipping into savings or credit cards. It has advantages but tell me what you think! Of course, the disadvantage is for the undisciplined new homebuyer who will not plan and then suddenly get hit with the regular payment in six months. I expect skepticism from a few but let's look at it as realistically as possible. It could help a few homebuyers make the decision to buy now - Don't you think?

Dawn Coulter
eXp Realty, LLC - Bloomsburg, PA
Helping clients say "Hello" to a "Good-Buy"....

Sounds intersting....need more help trying to "wrap my brain" around it!!  Please let me know!

 

Apr 08, 2011 04:54 AM