3-2-1 buydown mortgage loan. Realtors, help your buyers get a lower interest rate in AZ, CA, MN, NM, SD and WY

Have a  slow moving property you want to move fast? Have a buyer in need of lower monthly payments? Try this program and see what happens.

The 3-2-1 buydown is a great way to help your real estate clients into a mortgage with reduced payments for 3 years. It is also a great incentive to offer buyers lower payment option and bring more interest to your listing. This is a great feature to an already great My Community Mortgage program. The My Community program allows for 100% loan to value with reduced Mortgage Insurance, lower credit scores and 6% seller contributions. 9% contributions are allowed at loan to values at or under 95% AND the buyer qualifies at 1% above the bought down rate instead of the initial note rate for ltv's above 95%. I love this program and you will too. I will try and briefly explain the way this 3-2-1 and 2-1 buydown works.

The seller will need to be willing to contribute 3-5 points to buy the interest rate down. The buyer can pay but I am seeing more and more sellers willing to offer this. The total amount needed in contributions is calculated by taking the rate before buying it down and using that monthly payment as a starting point. subtract the interest rate reduction of 3 points and get a payment calculated off of this rate. Multiply it by 12 and you have your first year costs. Do the same for the second year and the third year. The total difference is what would be needed in contributions.

For argument sake, let's say the interest rate on a 30 year fixed rate mortgage is 7.00%. Using a $200,000 loan amount, your pre buy down payment would be $1330.60. The first year would be based off of an interest rate of 4%. The payment on the 4% rate is 954.83. The difference from the 7% rate is $375.77 a month. Take this number and multiply by 12 and you come up with $$4509.24. For the second year, you do the same. Second year rate would be 5.00% with a payment of $1073.64 and a difference from the 7% rate of $256.96. Times by 12 and your second year costs are $3083.52. Third year is 6.00% and a payment of $1199.10 and a cost of $1199.10. Take these 3 numbers and add them up for the total buydown cost of this program. For this scenario, the lender would collect $8791 for the buydown cost.

On a $200,000 home purchase with a 3-2-1 buydown will cost 4.5% in seller contributions. This program allows 6% seller contributions. If the seller contributed the full 6%, there would be over $3000 to use towards the buyers other closing costs and could get them into the home of their dreams with no money down and 3 years of lower payments.

**NOTE** A 2-1 buydown is also available and will cost a little less. If you have a seller unwilling to contribute the full amount needed for the 3-2-1 buydown, a 2-1 buydown may be more obtainable. Calculations are figured the same way.

Please feel free to send us your executed purchase contracts to see what this can do for your current clients.

Apply online 24/7 with fast response times. We will explain this to your clients in more detail. You will see how much your clients love this program.

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