2-1 Buy Down Program
Rate Buydown Seller Concession
The seller’s housing market is quietly shifting to a buyer’s market, with seller concessions making their 2022 debut. Higher interest rates are taking many buyers out of the market, leaving more homes up for grab with less competition. This shift has sellers lowering their prices and offering concessions to get their homes sold. A popular seller’s concession is the 2/1 Buydown because it reduces the buyer’s interest rate by 2% the first year and by 1% the second year for a very reasonable seller concession.
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Interest Rates and annual percentage rates (APR’s) are hypothetical only and based on a credit score of 760 at our current pricing as of May 20th, 2024. Hypothetical secenarios are meant to be informational only, do not factor in borrower information, and are subject to modifications related to property type, occupancy type, loan amount, loatn-to-value ratio, credit score, and other variables. Monthly payments are principal and interest and do not factor in additional variables such as mortgage insurance or property taxes. Terms and conditions apply. Not all borrowers will qaualify.
Temporary Rate Buydown
Temporary Rate Buydowns to help borrowers lower their interest rate for the first 12 to 36 months of their mortgage.
HOW DOES IT WORK?
What? Seller concessions can be used to pay the upfront fee with a seller-paid temporary rate buydown. A lender-paid LLPA option can be used to cover the buydown cost on a lender-paid temporary rate buydown.
Who? Borrowers who have seller concessions or would like to have a lower interest rate in the beginning of their mortgage for a lower monthly payment. The borrower must qualify with the initial note rate.
PARAMETERS
- Purchases only
- Eligible Products:
- Conventional fixed and ARMs
- Primary and second homes only
- Jumbo 30-Year Fixed Blue, Pink and Yellow
- Primary and second homes only
- Jumbo 30-Year Fixed Blue is only eligible for seller-paid temporary buydowns
- Bank Statement 30-Year Fixed Orange
- Primary and second homes only
- FHA and VA
- Primary homes only
- No USDA products
- Not available on manufactured homes
- Conventional fixed and ARMs
- Buydown Options: 3-2-1, 2-1, 1-1 and 1-0 tiers
- Only the 2-1 and 1-0 options are available on Jumbo 30-Year Fixed Blue, Pink and Yellow and Bank Statement 30-Year Fixed Orange
BENEFITS
- Great opportunity to help sellers get a property sold without affecting the sales price. Great option for when interest rates are high. The benefit goes directly to the borrower
- A great way for borrowers to use any excess seller concessions that often go unutilized• A lower interest rate for the first 1-3 years allowing the borrower to have a lower monthly payment
- Borrower can use the monthly savings to do renovations, upgrades, or buy furniture for the new home
- In a high interest rate environment, borrowers will more than likely be able to refinance to a lower rate than the one they will adjust to after the 1-3 years
- Easier transition from renting to buying by easing the borrower into their mortgage with a lower payment