Unlock Savings with the 2-1 Temporary Interest Rate Buydown
In an ever-evolving real estate landscape, securing a mortgage that not only meets your financial goals but also offers flexibility is crucial. At Mettle Mortgage, we understand the dynamic nature of the market, and that’s why we’re proud to offer the 2-1 Temporary Interest Rate Buydown.
This innovative type of financing caters to both homebuyers and sellers, creating a win-win scenario in an environment where interest rates may seem unpredictable.
Understanding the 2-1 Temporary Interest Rate Buydown:
As interest rates continue their upward trajectory, Mettle Mortgage stands out by providing eligible borrowers with the option for a seller paid 2-1 Temporary Interest Rate Buydown on fixed-rate Conventional, FHA, and VA loans. This may help you obtain a lower monthly payment and pay lower interest for the first two years of the mortgage.
How It Works:
The 2-1 Temporary Interest Rate Buydown allows borrowers to enjoy a reduced monthly mortgage payment by securing a lower interest rate for the first and second years of the loan. Either a homebuyer or a home seller can pay for the buydown. That payment may be in the form of mortgage points, or a lump sum deposited in an escrow account with the lender and used to subsidize the borrower’s reduced monthly payments. On top of that, any unused buydown funds will be applied as a loan principal reduction.
The first year of the loan, borrowers benefit from an interest rate that is reduced by 2% from the current market rate. The second year, borrowers will pay an interest rate that is reduced by 1% from the current market rate. From the third year on the interest returns to the original market rate for the remainder of the loan.
The 2-1 Temporary Interest Rate Buydown provides significant advantages to home buyers and sellers in a market characterized by fluctuating interest rates
Benefits for Homebuyers:
Lower Monthly Payments: Homebuyers can obtain a lower monthly payment during the initial two years of their mortgage.
Reduced Interest: Pay lower interest for the first two years of the mortgage.
Principal Reduction: Any unused buydown funds will be applied as a loan principal reduction.
Benefits for Sellers:
Attract More Buyers: Appeal to more homebuyers, especially in a higher interest rate market.
Quicker Sales: Potentially sell the home quicker and avoid price reductions.
Positive Perception: Foster goodwill with both buyers and agents during the home selling process.
Strategic Option: Rather than lowering the purchase price of the home, a temporary buydown allows the seller to receive the asking price in exchange for buying down the rate temporarily.