What is a 2/1 Buydown? #shorts

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How to save HUNDREDS on your mortgage!

Interest rates have gone up a lot lately which affects your affordability when looking to buy a home but there is a way around this.

It’s called the 2/1 Buydown.

Here is a basic overview:

1. The 2/1 Buydown is where the SELLER pays for your interest rate to be lower for the first 2 years of your loan.

2. This type of loan does not have an ARM (adjustable rate mortgage), this program is only for 30-Year fixed loans.

3. The rule of thumb is the seller pays a 2.5 point cost (2.5 percent of the loan amount) which is paid out by the seller as a credit to the lender in escrow.

4. The first year, the interest rate will be 2% lower.

5. The second year, the interest rate will be 1% lower.

6. You can’t refinance for the first 2 years of the loan.

7. You need to be COMFORTABLE with the 3rd year payment (if you don’t or can’t refinance).

Now is very much a PRIME opportunity market for buyers. The property you buy today is less expensive then it would have been 6 months ago, 1 year ago, 2 years ago, etc. and there’s less competition. Buyers hold so much more leverage then they have had in 10 years. The only major condition is that you have to be able to afford the rate to purchase today and the 2/1 Buydown may be a really good option to employ.

DM us with any questions.

#realestate #finance #financetips #mortgage #invest #investmentips

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