You may be able to lower your monthly housing payment with a 2/1 Buydown.
When interest rates were at historic lows, a typical fixed rate mortgage loan was all most people needed. Now, rates have risen and borrowers may be looking for options to lower their monthly payment. Rates are still below long-term averages, yet appreciably higher than before. And of course, higher interest rates lead to higher monthly payments.
GMFS offers a loan program that can help ease the burden of a higher monthly payment, with help from your builder or independent seller. With a 2/1 Buydown, you’ll get a 30-year fixed rate loan with a reduced payment for the first 2 years. The 2/1 Buydown effective reduces the interest rate on the loan by 2% during the first year and 1% the second year.
This is also referred to as a Seller Paid Buydown. The Seller may attract buyers to their home by offering a seller paid buydown subsidy. Offering a seller paid buydown, the seller is offering an attractive incentive that will set them apart from other sellers in the marketplace. By funding a seller paid buydown subsidy, the seller provides a valuable benefit to the borrower by reducing the monthly payment the buyer will pay for the first 2 years of the loan.
You can ease your way into a home with lower payments that simply step up at the end of the first and second year then remain fixed for the remainder of the loan.
A 2/1 Buydown comes with extra upfront costs that are paid by the seller or builder, with their agreement to do so. There are additional details that vary according to each borrower’s unique situation.
Talk with our team today about what a 2/1 buydown could do for you!