Buy Down Mortgage Interest Rate
How Can You Purchase Your Home At A More Attractive Rate?
The rising interest rates may greatly affect your decision wether you should buy a new home now or wait it out. The higher the rate, the more it reduces your buying power and increases the cost of purchasing a home over the course of the loan. What if I told you there is a way to avoid spending less thousands of dollars?
Paying higher upfront fee results for lower interest rate. By doing rate buydown, it increases your closing costs. Mortgage interest rate is also reduced for every 1% of purchase price you pay in points. If you intend to keep your home for a long time, this is a good strategy in making the difference over the duration of the loan.
There are also options for rate buydown. You can increase closing costs upfront for lower interest rate, or temporary buydown by a homebuilder or lender to incentivize a purchase.
Temporary buydown is set for a specific period, between two or three years, and then the rate wiill return to higher rate if the borrower does not refinance. This is a good strategy for first-time buyers or for those who wait for lower interest rates in a few years. Utilizing buydown options as part of your loan origination is a smart way to save money and maximize purchase power.
If you are planning on buying your new home and you want to know more of your options, let's connect!