Depends on what you want to do, If it is your primary, I would probably try to negotiate the lower interest rate being held by the bank, versus a few k off the purchase price. 1 point over a 30 year loan on nearly 200k purchase is way more than 10-15k difference on purchase price.
If it were me, and I can only speak for myself, I’d try to get them on the interest, over the purchase, provided of course you can afford the payment. Just playing with a mortgage calculator with a 200k principle and a 4.5 mortgage v a 3.5 mortgage equates to about $115 a month less per month… whereas 4.5% of 190k only reduces the payment by about $50 a month.
I think the bank will take whatever deal makes sense to them. I don’t think either is a bad offer, and bank has shown they are willing to negotiate. I have heard people say banks can be very flexible with terms… the higher purchase price looks good on their books, and the lower interest rate can be “hidden” when blended in with all their other mortgages… that’s what I’ve heard anyway.
Posted by Gary Rains on January 10, 2003 at 09:20:20:
My wife and I are trying to purchase our first REO property for our own personal residence. The property has already gone to the sherriff’s sale and returned no buyers, and has been given back to the bank. The property has been vacant since Sept. 2002. The listing agent has the property listed for $202,900. We offered our first bid of $175,000 with seller paying for our 3% down payment netting a bid for $170,000. The bank has couintered with a sale price reduction of $199,000 with paying the down payment of $5,970, netting $193,030. The ball is now back in our court. The question I ask is what would be a better counter back to the bank, either increase my price let’s say $185,000 with 3% seller paying down payment of $5,550 netting a new offer of $179,450, or should we agree to their new price of $199,000 with 3% down netting $193,030 and ask the bank to carry the note at a dicount rate of, let’s say 3.5%. Could you please advise us on what sounds most likely the best option or give us your opinion.