How much should you be looking to buy down a rate if you have seller credit?

[Daniel Jodrey]

Hello BP,

I understand that no one knows what will happen with interest rates in the future, and that anything is possible -whether rates increase, decrease or stay the same.

With that said, looking for overall opinions of seasoned investors/realtors/lenders etc and where they stand on this subject.

- Lets say you are given 6% seller credit on a $600,000 purchase of a duplex. That would give total of $36,000 in seller credit. Likely I would pay off closing costs first which estimate of about $12,000. How much money would you use to buy the rate down if you have roughly $24,000 left over in seller credit. I also understand you could pay off PMI as well as buy home warranty plan - which I would be interested in doing as well

From my lender, roughly $18,000 would reduce the interest by about 1% and would likely take roughly 5 years to break even

I am looking to purchase in the Portland OR area. More specifically focused on the Washington State side in Clark County such as Vancouver, Ridgefield, Battleground, LaCenter,Longview/Kelso.

Thanks all!