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Unfortunately, most buyers think the only way to increase their affordability is by negotiating a lower purchase price.

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If you pay less for a house, you're automatically getting a better deal, a lower payment, and better affordability, right?

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But what if that isn't always true? I'm Michael Thayer. I'm a mortgage advisor in Nashville, Tennessee, helping buyers and sellers win nationwide with strategies like this one. Now, down below, I want to share this powerful calculator with you designed to help you better understand affordability. So let's say a seller is willing to contribute $10,000 to a potential buyer.

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Is it better to take a $10,000 concession off the price? Or, is it smarter to leave the purchase price as it is and apply the $10,000 towards a permanent rate buy-down to lower your interest rate and or reduce your cash requirements at closing?

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This is where most people miss.

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When you apply this strategy, you're not just creating a lower payment. You're also increasing your buying power. You're reducing the total interest paid over the life of the loan. You're lowering your upfront cash needed to close.

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And you're creating significant, better, long-term affordability. Now, that's how you strategically create affordability.

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When you negotiate only a lower purchase price.

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That benefit is diluted over the life of the loan, and many buyers are still left in

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With a fair market interest rate. And monthly payments?

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that typically don't even move nearly to what they expected it to. For example, $10,000 divided by 360, 30 years of mortgage payments, is only $27.70 a month before interest is applied. Think about that. A $10,000 concession is only $27 a month before interest.

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That's really not that big of a deal. You're not creating affordability.

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That's what this calculator is designed to do, to help you compare strategies side by side, to see how maximizing a seller's contribution can sometimes create savings that feels significantly greater than simply applying negotiating power to a lower purchase price alone.

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Now, inside this calculator, you're gonna see several options. A no-point option, a one-point buy-down option, a 2-point buy-down option. And then the most powerful one?

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Seller paid buy-down. Now, the 1 and 2 point options assume the buyer is paying the cost. So the calculator is going to show you what a break-even point is, or how long it's going to take, you know, the monthly savings to outweigh the upfront expense.

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Real magic happens when the seller pays the cost. Because when the seller covers the buy-down.

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There's no break-even point. Your savings starts immediately.

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You increase affordability is like buying a house at effectively a lower purchase price, because you increased the buying power and lowered your cost of borrowing over time.

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That's why negotiating seller-paid closing costs with a permanent rate buy-down can sometimes create much more bigger financial advantages than just simply asking for a lower sales price alone.

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It becomes a win-win. The seller protects, you know, their sale, their sale price. They still walk away with the money they need to go buy their next house. And the buyer benefits from lower payments, lower interest costs.

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and improved affordability. It's simple black and white math, people. You just need the advice that we give to create this strategy. So take a look at this calculator, plug in your numbers, and compare scenarios for yourself. And if you'd like to review your own specific situation, reach out anytime. We'll walk you through your options, and together we'll help build a strategy that works best for you. Talk to you soon.