Kenna Real Estate Group · Colorado move-up buyers
You have a low rate and a lot of equity, and the house you want is finally on the market. The rate you give up is real. The equity you carry and the thin buyer pool on the other side are bigger.
A live person answers. Not a robot, not a phone tree.
A Denver-metro owner who bought in 2019 at $450,000 has about $200,000 of equity today. That equity is a 25 percent down payment on an $800,000 home, and 25 percent down at 7 percent on $600,000 is $3,992 a month principal and interest. The old 3 percent loan was cheap; it was also on a house you are leaving. Move-up buyers win in this market because the same 7 percent that scares first-time buyers thins the competition on the home you want, and sellers of $800,000 homes are giving credits.
Typical 2019 buyer
$200,000
After selling costs, a 25 percent down payment on an $800,000 home.
The new payment
$3,992
About $4,900 all in with taxes and insurance.
Seller credit
$15,000 to $25,000
A 2-1 buydown on $600,000 costs about $14,000 and saves $770 a month in year one.
Competition
4.7 months
Multiple offers are rare above $700,000; you negotiate terms.
| Line | Stay | Move up |
|---|---|---|
| Home | $650,000 today, bought at $450,000 | $800,000 |
| Loan | $330,000 at 3% | $600,000 at 7% (25% down from equity) |
| Principal and interest | $1,391 | $3,992 (about $3,220 in year one with a 2-1 buydown) |
| All in, with taxes and insurance | about $2,000 | about $4,900 |
| What you get | The house you have | The house you want, and $150,000 more asset appreciating |
The payment roughly doubles for most move-up buyers. Two things cut it: the seller credit as a buydown, and putting more of the equity down. A third: refinance when rates fall; the house does not change, the rate does.
kennarealestate.com · free guide
Your net at list, at a 3 percent cut and with a $10,000 credit, side by side, plus the listing wording and the buyer-loan caps
A credit is a targeted price cut: the same money at closing, a much bigger change to the buyer's payment. Sellers who priced right and offered a credit netted about 98% of list; those who held out and cut late netted about 93%.
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KENNA REAL ESTATE GROUP
Call or text 303-955-4220 · A live person answers.
You pay closing costs on both sides of a move-up. The buy side, line by line: closing costs for Colorado buyers.
Text your address to 303-955-4220. A live person sends what your home nets today and the payment on the one you want, with the credit and the buydown priced in.
Call or text 303-955-4220What is my home worth?The 3% loan ends when you sell no matter what. The question is whether the home you want is worth the new payment, and whether the equity you carry plus a seller credit makes that payment carryable. For most 2019 buyers it does.
Enough net equity after selling costs to cover a 10 to 20 percent down payment on the new home plus a reserve. A 2019 Denver-metro buyer has about $200,000; that is 25 percent down on $800,000.
Sell first with a rent-back in most cases. Buy first only with a HELOC or bridge loan you can carry, and only on a home you would lose otherwise.
When rates fall you refinance the rate; the house and the equity are locked in at today's price. A 2-1 buydown covers the first two years.