Temporary Rate Buydown
Temporary Buydowns are options that give the borrowers the opportunity to lower their interest rate at the start of a loan and in turn the monthly payment for a limited period of time through an upfront lump sum fee. This fee can be paid one of two ways by Seller Concessions or a lender paid Loan Level Adjustments (LLPS). It is also important to share that with the Temporary Rate Buydown option borrowers must qualify off the higher note rate.
Option Benefits:
- It can create monthly savings that provide the buyer much needed financial flexibility in a higher rate environment
- It can help sellers with selling their property without affecting the sells price
- A great way for the borrower to use any excess Seller Concessions
- It can bring value to the real estate agents when a borrower is setting on the fence in a higher interest rate environment
- Borrowers will likely be able to refinance to a comparable rate in the coming years
Buydown Parameters
- FHA, VA, Conventional Purchase & 30-yr Prime Jumbo only
- Not available on USDA loans
- With conventional and Jumbo products primary buydowns can use on primary and second homes
- With FHA and VA loans it can only be use on primary loans
Buydown Options – FHA, VA, and conventional
Seller Paid:
- 3-2-1 Buydown
- 2-1 Buydown
- 1-1 Buydown
- 1-0 Buydown
Buydowns Options – Prime Jumbo 30-yr Fixed
Seller Paid:
- 2-1 Buydown
- 1-0 Buydown
