What is a 2-1 Buydown for your mortgage interest rate?
Since the mortgage interest rates have gone up recently there has become a trend in the lending industry to help buyers buy down their mortgage interest rate.
Per my lender friend Daniel Anderson at Integrity Mortgage sellers can offer a credit to pay $10K to a buyer, helping a buyer obtain a mortgage interest rate reduction. For example, from 7.25% to 5.25%. This results in a monthly savings of up to approximately $520.00 a month on a buyers mortgage!
This makes sense to me as lowering the rate would save more money than lowering the sales price. Of course, the seller has to be able to offer this to a buyer instead of reducing his sales price.
For more information or to crunch some numbers to see if this would work for you, click on Daniel's name above for more information!
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