2:1 Buydown for Spring Buying Season
Alright, it is Friday and we’ve officially made it to Spring and buyer interest is accelerating. Given rates are still putting pressure on affordablility, here is a way to make your monthly payments a little more reasonable. We’ve talked about seller concessions where the seller gives you money as an incentive and you can use those funds toward closing costs. You’ve also hear us talk about another option for seller concessions called a 2-1 buy down. With a 2-1 buydown, a buyer can receive seller concessions to essentially buy down the interest rate by 2% in the first year of the mortgage and 1% in the second. For example, let’s say you close your loan at a 6% interest rate. The first year, your payments will reflect that of a 4% rate and the second year is a 5% rate. On a $400,000 loan, the 2-1 buydown would save you almost $6000 in the first year of your new home! The best part is, if you refinance or sell your home within the first two years, you get to keep the left over seller credits! Buying a home can be more affordable than you think! Check out your options!