A seller lists a house for $500,000 and gives you the option of a $15,000 price reduction or a $15,000 Closing Factor. What’s the difference to you?

Option A: Reduce price by $15,000
     Seller nets $485,000
     Buyer puts 20% down = $97,000 and borrows $388,000
     Monthly payments (30 years, 6%) would be $2326/mo

Option B: $500,000 price with $15,000 Closing Factor
     Seller nets $485,000
     Buyer puts 20% down = $100,000 and borrows $400,000
     Monthly payments (yrs 1-3) = $1933/mo
                             (yrs 4-30) = $2398/mo
     Plus, Buyer may immediately deduct $15,000 for tax purposes

Net Difference
To Seller: Zero
To Buyer:
Option B down payment $3000 higher, but tax deduction is $15,000
       Monthly payment: Save $393/mo for 36 mos, then pay additional $72/mo.
              Cumulative net benefit exists for 16 years

With the Custom Closing Factor the buyer’s needs and income prospects can be used to create an optimal term and rate reduction. Almost any combination of term and rate reduction can be accomplished, depending on the seller’s willingness to subsidize. And, remember, the Factor can be used to modify any fixed or adjustable rate mortgage loan.