What if $24,000 from the seller lowered your payment as much as a $74,000 price cut? Here's the side-by-side math.
$700,000 home, 20% down, 30-year fixed at about 7%. One point is 1% of the loan ($5,600 here) and is assumed to lower the rate by 0.25%.
| No credit | $24K to points | $74K price cut | |
|---|---|---|---|
| Purchase price | $700,000 | $700,000 | $626,000 |
| Loan amount | $560,000 | $560,000 | $500,800 |
| Interest rate | 7.00% | ~5.93% | 7.00% |
| Monthly P&I | $3,726 | $3,332 | $3,332 |
| Seller cost | $0 | $24,000 | $74,000 |
Either way, the buyer gets the same lower payment (about $394/mo less). The seller keeps about $50,000 more, and the recorded sale price stays at $700,000.
A price cut has its own perks, too: here it would also lower your down payment by $14,800 and your property tax by roughly $70/mo. The full sheet compares all of it.
Even lower than a buydown: some FHA and VA loans can be taken over at the seller’s original rate. How assumable mortgages work →
Free PDF with the full side-by-side, including a $24K price cut and the 1/8-point scenario.
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Call or text (925) 307-8798For illustration only. Figures are estimates of principal and interest on a 30-year fixed loan and exclude taxes, insurance, HOA and mortgage insurance. Actual rates, point pricing and seller-contribution limits vary by lender, loan program, credit and market conditions. Not a commitment to lend or loan advice. Tye Moody is a real estate agent, not a lender; talk to a licensed loan officer before making an offer.
Tye Moody, REALTOR® · DRE #02439789 · Twin Oaks Real Estate, Inc. · Broker DRE #01845706 · Equal Housing Opportunity