A buydown is a type of financing where the buyer or seller pays extra points (also called discount points) to reduce the interest rate on a loan. Buydowns make it easier to qualify for a loan because they lower a loan for Korenes interest rate. They can also allow you to buy more house for your money.
There are generally two types of buydowns: a permanent buydown and a temporary buydown. A permanent buydown lets you pay extra points to get a low interest rate over the life of your loan.
A permanent buydown can be paid by the seller or the builder as an incentive to finalize a sale by creating lower monthly payments. Sellers can also benefit from assisting with a buydown with a difficult to sell property or during slower market conditions. It increases the buyer’s ability toqualify for a loan, therefore, allowing the home to be sold quicker. Plus, a buydown offer is usually less than a price reduction on the home.
In atemporary buydown, you prepay interest in exchange for a lower rate during the early years of a loan. The most common temporary buydown is called 3-2-1,meaning the mortgage payment in years one, two and three is calculated at rates 3 percent, 2 percent and 1 percent, respectively, below the rate on the loan. On a 2-1 buydown, the payment in years one and two is calculated at rates 2 percent and 1 percent below the loan rate. And on a 1-0 buydown, the payment in year one is calculated at 1 percent below the loan rate.
A temporary buydown can be a benefit to a buyer whose current income is low but anticipates that it will increase during the next two years. First-time homebuyers who need to purchase all of the furnishings that go into a new home may also find a temporary buydown appealing.
Ask Korene how the buydown option will fit your wants and needs. You will want to do this when you are getting pre-qualified and consider it with your realtor as you negoiate your purchase agreement. If you have question, Korene will meet and discuss these options with you and/or your realtor.
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"KLCSLOANTEAM and Korene Clopine-Seaman are a mortgage team that invests itself with their client's and referral partners business. They are just not providing mortgage information, education and services, they have built relationships in our business and invested in providing services that helps us deliver our core mission to provide the services that meets our client's needs in line with our company culture and values"
W. J. Bradley Mortgage Capital LLC. is a direct mortgage lender with lending authorization for Conventional, HUD, FHA, VA, USDA, and Jumbo real estate loans lending with offices in various locations focusing on providing to the people in the communities we serve throughout the United States mostly in the Southwest. We are available to help borrowers achieve the dream of home ownership and assist them as they take advantage of today’s real estate investment opportunities and mortgage rates.
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W J Bradley Mortgage Capital LLC NMLS# 3233 9237 East Via De Ventura, Suite 100 Scottsdale, AZ 85258 Direct Office Phone:(623) 340-0934 Fax: (623) 218-1807 AZ License # BK-0903998; Licensed by the Department of Corporations under the California Residential Mortgage Lending Act RML# 4131002; FHA Approved
*Korene L. Clopine-Seaman is working with and as the Team Manager of KLCSLoanTeam. She is licensed to originate mortgages in Arizona and California: AZ LO-0916745 CA: DOC-218520
