Choosing Between $10K Off Purchase Price or Closing Costs in Mortgages

$10K off the purchase price sounds like the obvious win.

But it depends on what you need most.

$10K off the purchase price:

You’re lowering your loan amount by $10K.

At around a 6.25% rate over 30 years, that could be roughly:

$60 less per month
about $12K saved in interest over time

Sounds great, right?

But here’s the catch...

You still need cash for your closing costs.

So if you’re tight on funds, this may not help you get across the finish line.

$10K toward closing costs:

The price stays the same.

The loan may stay about the same.

But the seller helps cover $10K of your closing costs.

That means more money stays in your pocket at closing.

Yes, you may pay a little more over time.

But you’re not draining your bank account just to get the keys.

So which one is better?

Go with the price reduction if:

you already have cash saved
you want the lower monthly payment
you plan on staying long-term

Go with the closing cost credit if:

you’re tight on cash to close
you want reserves for moving, repairs, or life
you’re okay with a slightly higher payment

The goal is not just getting the keys.

It’s getting the keys and still liking your bank account after.

– Dream Mortgage

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