I have been asked to expand on the Buydown Loan Program we offer. There are many types of buydown loans. Two of the most popular are the 2-1 Buydown and the 1-0 Buydown. The 2-1 Buydown Loan has an interest rate which is 2% below the note rate the first year, 1% below the note rate the second year, and then the rate goes to note rate years 3 through 30. This is a FIXED Rate loan. For example, the 30 year fixed rate is around 6.625% today. With a 2-1 Buydown Loan the rate would be 4.625% the first year, 5.625% the second year, and 6.625% for years 3 through 30. The cost of a 2-1 Buydown Loan is about 2.5%. These points can be paid by the seller if it is negotiated in the contract.

A 1-0 Buydown Loan has an interest rate that is 1% below the note rate for the first year and then goes to the note rate for years 2 through 30. The cost of a 1-0 Buydown Loan is about 1.0%. The 1 point can be paid by the seller if it is negotiated in the contract.

With rates heading up, a Buydown Loan can help you qualify for more  home. This loan works very well for people who are getting raises every year and will be able to make the house payments as they increase.

Please call Lynne Dewar at (800) 552-1188 for any further questions.