In a real estate market with high interest rates, buyers may be looking for ways to lower their monthly mortgage payments to make a home purchase more affordable. One strategy that buyers can use is to leverage discount points with seller contribution. Discount points are fees paid to a lender at closing to reduce the interest rate on a mortgage, and when the seller contributes to these points, it can help buyers afford a house by lowering their monthly mortgage payments. Here’s how buyers can use discount points with seller contribution to afford a house:

1. Negotiate with the seller: During the negotiation process, buyers can request that the seller contribute to the buy down by paying for some or all of the discount points. This can be done as part of the overall offer or as a separate negotiation point.

2. Determine the amount of discount points needed: Buyers should work with their lender to determine the amount of discount points needed to achieve the desired reduction in interest rate. This will depend on the loan amount, current interest rates, and the specific terms of the mortgage.

3. Include the seller contribution in the offer: If the seller agrees to contribute to the buy down, the buyer can include this as a condition in their offer. For example, the offer can specify that the seller will pay a certain amount towards discount points at closing.

4. Review the loan estimate and closing disclosure: Once the offer is accepted and the mortgage application is submitted, the lender will provide the buyer with a loan estimate and later a closing disclosure, which will outline the details of the loan, including any seller contribution towards discount points.

5. Close the transaction: At closing, the seller will typically provide the agreed-upon amount towards discount points, and the buyer will use these funds to pay for the discount points as part of their closing costs.

By using discount points with seller contribution, buyers can lower their monthly mortgage payments, which can make a house more affordable over the long term. It’s important for buyers to carefully review and understand the terms and conditions of the mortgage, including any seller contribution towards discount points, and work closely with their lender and real estate agent to ensure a smooth transaction.