Overview from Francisco Cabrera:
When negotiating with a seller, getting $10,000 off the purchase price sounds enticing, but applying that same $10,000 as a seller credit toward closing costs or a temporary 2-1 interest rate buydown can cut your monthly payment much further.
Option A: Price Reduction
A $10,000 reduction on a $450,000 home only reduces your monthly mortgage payment by approximately $50 to $65 per month at typical interest rates. It also slightly reduces your required down payment.
Option B: Seller Paid Closing Cost Credit
A $10,000 seller credit directly reduces your cash to close out of pocket at settlement. You keep $10,000 more in your emergency savings account on day one instead of parting with it at the closing table.
Option C: Temporary or Permanent Rate Buydown
Using seller concession funds to purchase a temporary 2-1 buydown reduces your interest rate by 2% in year one and 1% in year two. On a $400,000 loan, this can save $400+ per month during your initial move-in years when expenses are highest.
Program Limits on Seller Contributions
Conventional loans limit seller credits between 3% and 9% depending on down payment. FHA permits up to 6%. Credits cannot exceed actual closing costs.
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Every Florida borrower has unique timelines and financial goals. Book a free 15-minute strategy call with Francisco to review your options—honestly, in English or Spanish.
Cabrera Mortgage · Francisco Cabrera, NMLS #2348359 · Bright Horizon Lending Inc., NMLS #2565670