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$10K Your Way

November 20, 2023

When it comes to purchasing a home, securing the right mortgage rate can make a significant difference in your long-term financial well-being.

That’s why we're offering a $10,000 incentive towards Rate Buy Down Assistance or Closing Costs for closings scheduled on or before January 31, 2024. 

With our exclusive buy down option, you have the power to customize your mortgage to suit your needs. Lowering your interest rate can lead to substantial savings over the life of your loan. Imagine having an extra $10,000 to put towards customizing your new home or further reducing your mortgage costs. It's an opportunity you won't want to miss!

WHAT IS A BUYDOWN

A buydown is a way to lower the initial interest rate on a loan, typically a mortgage, for a specific period of time. The buydown method can be useful when protecting yourself against rate hikes and it's often used to make homeownership more affordable for borrowers, especially in the early years of the loan.

Raynard Brown, president of Inspired Homes, explains a buydown as “Giving your money a head start in building your dream home.”

Just to put it in perspective, a buydown from 7.5 percent to 6.5 percent on a $500,000 loan amount would lower the borrower’s principal and interest payment from $3,125 to $2,708.33, a monthly savings of $416.67.

HOW YOU SAVE

Let’s talk Temporary Buydowns - This involves reducing the interest rate for a set period, often the first few years of the loan. This is achieved by paying additional money upfront, usually by the homebuyer or the home seller, to the lender. This extra money helps cover a portion of the interest cost during the specified period.

Buydowns can be arranged in many different ways, but some common arrangements are the 1-0 buydown, the 2-1 buydown and the 3-2-1 buydown. 

1-0 Buydown 

With a temporary 1-0 buydown, your interest rate is 1% lower than what your contract rate would be for the rest of the loan for the first year.

2-1 Buydowns 

A 2-1 buydown also provides a buyer with a discounted interest rate, but only for the first 2 years of the loan’s term. With this option, the interest rate would be 2% lower the first year and 1% lower the second.

3-2-1 Buydowns 

A 3-2-1 buydown enables a buyer to pay less interest on their mortgage for 3 years after obtaining the loan. The points paid upfront reduce the interest rate by 1% for each of those first 3 years. 

Guild Mortgage Loan Officer, Jodie Roemer, describes a temporary rate buydown as a great way to reduce your rate and have a lower payment in the first year instead of reducing the price of the home, “Which is not much of a savings. It takes about 10 years for the same amount of the reduction on the price [of the home] from the rate reduction.” 

Don't miss out on this incredible opportunity to find your perfect home and save in the process. Remember, with the right approach, your dream home can also be a smart financial investment.

Contact our listing agent today to get started or ask us about refinancing at zero cost, with one of our preferred lenders – Guild Mortgage.