As rates inch higher, more homeowners are buying down their interest rates. Curious about what that means and if it’s right for you? Here’s the rundown on mortgage rate buydowns:
– A mortgage buydown is a way to lower your interest rate by paying discount points at closing. Discount points are a one-time, upfront fee.
– Each point costs 1 percent of the mortgage. For example, one point on a $200,000 mortgage would cost $2,000.
– Each point lowers the rate by 0.25%. So, one point would lower a mortgage rate from 6 percent to 5.75 percent for the life of the loan.
– There is also a phenomenal program that our lender partner has called a 2-1 buy down. This is great in a market like we have today. This program allows the seller to temporarily buy down the interest rate for a buyer.
If you have been thinking about making a move, and want to see if buying down an interest rate could help you, reach out to us today. We are here to help however we can.
