*disclaimer: Not all individuals will qualify for each loan type and/or scenario. Please contact me to see if you'd qualify for these loan products and/or discuss your options.
Recently here at Momentum Loans, we've began offering 2/1 buydowns as a financing option for those borrowers who qualify for it. What does a 2/1 buydown mean? Could it be an option that would be of interest to me?
2/1 buydowns stated simply, is an opportunity for a seller or lender to buy down a borrower's interest rate down for two years, before you have to start paying on the interest rate you originally closed on. This could mean that an interest rate goes down two percentage points during the first year, and one percentage point during the second, before returning to the initial interest rate.
This could be a great option for first time homebuyers who are looking to save a bit of money in the short term, or other types of borrowers who can qualify for the note rate, but could benefit from a smaller payment option for the first two years of the loan.
Just like an earlier article I wrote on adjustable rate mortgages, it's imperative that a borrower is smart when using this loan product. Although two years seems like a long time, deadline days always seem to sneak up quicker than anticipated.
Lastly, if a rates go down during the first two years of the 2/1 buydown period and a borrower chooses to refinance, the borrower can (in some cases) get a refund on the buydown amount.
If you're interested in learning more about what a 2/1 buydown entails, or if you want to see if you'd qualify for this financing option, please give me a call. I'd love to chat more about how we can help you get into your next home.
*disclaimer: Not all individuals will qualify for each loan type and/or scenario. Please contact me to see if you'd qualify for these loan products and/or discuss your options.
Brayden Ramsay NMLS #1997195
Momentum Loans NMLS #1606597
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