Temporary Buydown Loans

Temporary buydown loans are mortgage loans in which a mortgage rate is lower for a period specific period of time and increases annually to the note rate for the remaining term of the loan.

We are now offering 2-1 & 1-0 Buydowns to give you more flexibility in home purchase negotiations and allows more offers to be accepted! So, what are the benefits and how does it work?

BENEFITS

Great opportunity to help Sellers get a property sold without affecting the sales price. With the rising interest rate environment, Sellers love this product. The benefit goes directly to the Borrower
A great way for Borrowers to use any excess seller concessions
Creates monthly savings to allow the borrower to get settled in their home and be more financially flexible to purchase furniture, etc.
In this market and with our partners, Borrowers will more than likely be able to refinance to a lower rate than the one they will adjust to after the 2 years
These new options will allow borrowers additional purchase power in certain situations

DETAILS

What? Option for Borrowers to reduce their interest rate and in turn the monthly payment for a limited period of time through an upfront lump sum fee

Who? Only seller concessions can pay the upfront lump sum fee – seller paid temporary rate buydown

How? Borrowers must qualify off of the note rate

PARAMETERS

FHA, VA and Conventional Purchases only
- No USDA or Non-Agency products
Conventional = Primary and Second Homes
FHA and VA = Primary only
2-1and 1-0 tiers

BUYDOWN TIERS

2-1 Buydown

Year 1 – 2% lower than the note rate
Year 2 – 1% lower than the note rate
Year 3 – Full note rate

1-0 Buydown

Year 1 – 1% lower than the note rate
Year 2 – Full note rate

CALCULATION EXAMPLES

Loan Amount: $350,000 / Interest Rate: 5% / P&I Payment: $1,879

2-1 EXAMPLE

YEAR	INTEREST RATE	PAYMENT	MONTHLY DIFFERENCE	ANNUAL SAVINGS
1	3% (5% - 2%)	$1,476	$1,879 - $1,476 = $403	$4,836
2	4% (5% - 1%)	$1,671	$1,879 - $1,671 = $208	$2,496
3 – 30	5%	$1,879	$0	$0
BUYDOWN AMOUNT				$7,332

1-0 EXAMPLE

YEAR	INTEREST RATE	PAYMENT	MONTHLY DIFFERENCE	ANNUAL SAVINGS
1	4% (5% - 1%)	$1,671	$1,879 - $1,671 = $208	$2,496
2 – 30	5%	$1,879	$0	$0
BUYDOWN AMOUNT				$2,496

Let's connect on our mortgage options we have to bring value to you.

Temporary Buydown Loans

BENEFITS

DETAILS

PARAMETERS

BUYDOWN TIERS

CALCULATION EXAMPLES

About Us

Contact Us

Disclaimers

Resources