Temporary buydowns are hot now. Through the use of Temporary buydowns, you can get a 30 year fixed rate today with a discounted first year start rate at just 3.5%. This means that you qualify at 3.5% and your payments are based on 3.5%. The next year, your rate goes to 4.5%, the next year 5.5% and years 4-30, your rate would be at 6.5%. This is huge for a few types of buyers. First.....buyers who are only planning on being in a home for a couple or few years. Secondly, this type of loan would be great for buyers who know that their income would be increasing in the next few years and need the discounted payments over the first few years. There are a million buydown combinations. 3-2-1 buydowns, 2-1 buydowns....1-0 buydowns...are buydowns that have a discounted rate by the corresponding number and year.
Check out http://www.mtgprofessor.com/ to find out more as explained from the Wharton School of Business. Or better yet...call me.....have fun....
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