RATE BUYDOWNS! New PROGRAM to help with 2023 Rates
RATE BUYDOWNS: Temporary Rate Buydowns give your borrowers more flexibility by lowering their interest rate and monthly payment for the first 1-2 years of their mortgage
When it comes to buying a home, the process can be daunting. From finding the perfect house to securing a loan, there are many steps involved in the process. One of the most important decisions a homebuyer must make is how to finance their purchase. For many, this means taking out a mortgage loan. But what if there was another option? What if you could lower your interest rate and monthly payments for the first few years of your mortgage? This is where mortgage rate buydowns come in.
Mortgage rate buydowns are an increasingly popular way for homebuyers to reduce their interest rates and monthly payments on their mortgages. The concept is simple: instead of paying a fixed interest rate over the life of the loan, buyers can opt to pay a lower rate for a certain period of time (typically 1-2 years). This allows them to save money in the short term while still having access to long-term financing.
The most common type of mortgage rate buydown is known as a 2/1 buydown, which involves reducing the buyer’s interest rate by two percentage points for the first year of their loan. This type of buydown can be beneficial for those who need some extra breathing room when it comes to making their monthly payments or who want to take advantage of historically low interest rates before they rise again.
Another type of mortgage rate buydown is known as a 1/0 buydown, which reduces the buyer’s interest rate by one percentage point for only the first year of their loan. This option is ideal for those who don’t need as much financial relief but still want some flexibility with their payments during that initial period.
Finally, there are permanent rate buydowns, which involve sellers paying part of the buyer’s closing costs in exchange for discounted mortgage points that reduce their overall interest rates over time. While this option may not provide immediate relief like other types of buydowns do, it can be beneficial in terms of long-term savings and stability.
No matter what type of mortgage rate buydown you choose, it’s important to understand all aspects before committing so that you can make an informed decision about your finances and future homeownership goals. With careful consideration and research into all available options, you can find an arrangement that works best for you and your family’s needs!
Sources
- https://www.bankrate.com/mortgages/rate-buydowns/
- https://www.usatoday.com/story/money/personalfinance/real-estate/2023/01/22/mortgage-rate-buydown-lower-interest-rates/11077611002/
- https://www.nerdwallet.com/article/mortgages/the-property-line-october-2022
RATE BUYDOWNS
Ready to pay less in interest on your mortgage and lower your monthly payments? Ask the seller to pay for your rate buydown.
- Seller-paid 1- and 2-year buydown options
- Eligible on primary and second home purchases for conventional loans
- Eligible on primary home purchases for FHA and VA loans
Information subject to change. Certain restrictions apply. Subject to borrower approval.
