The 2/1 Buydown
Posted by Tom Crimmins Realty on
Guest Blog by: Daniel Boxman of Think Mortgage
In today’s current rising rate environment, many buyers are taking advantage of the 2/1 rate buydown. This loan product has been available for a while but has gained popularity over the last month or two due to the increase in mortgage rates. The 2/1 buydown gives buyers the ability to lower their interest rate 2% below the current market rate for the first 12 months of their mortgage payments and 1% below for the next 12 months before the rate increases to the current market rate in which the loan was locked.
For example: if the current market rate is 6.75% and the buyer uses the 2/1 buydown, their first 12 mortgage payments will be at 4.75%. Their next 12 payments will be at 5.75% and on the 3rd year…
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