What is a 2-1 Buydown?
It’s Tuesday, August 23rd. Let me tell you about a loan program that’s got a lot of activity right now. It’s been around forever. However, when interest rates rise, it becomes a little bit popular. Let me tell you. It’s called. It’s called a 2-1 buydown. What does that mean? So let’s say, for instance, you have a 30 year fixed rate today at 5%.
a 2-1 buydown means in the first year, your interest rate is 3% and the second year your interest rate is 4%. And in years three through 30, it’s a 5% still fixed rate, not an adjustable. You might ask Chris. Sounds great. Who’s going to pay for it? Well, you can typically get the seller and negotiate through them to cover the cost of buying that rate down for the first year or two.
Remember, we’re not in a seller’s market anymore. We’re in a balanced market. The seller’s probably a little bit open to negotiating something in price with you. Maybe instead of them dropping their sales price, they actually give you a credit to help buy down that interest rate for a lower payment to ease into the home. If you’re looking to buy a home, you have a question about it.
If find out more. Please reach out to me anytime.
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