Understanding 2-1 Buydown Mortgages

What’s up friends! Rodrigo Ballon with Cross Country Mortgage.

So I’ve been talking about the 2-1 buydown. Why? It is an immediate way to save on mortgage interest the next two years.

Your first year you pay 2% less then your thirty year fix. The second year you pay 1% less then your 30 year fixed rate.

Why is this important?

We all know that rates do not last. They go up and down. However, they are going to be going back down. When? We don’t know, but probably in about 12 or more months. However, [the 2-1 buydown] is genius for the buyer because the seller is going to pay for it. So, why not benefit from saving money for the next two years. Also it is the perfect time to buy. We are not in a correction. Corrections are 10-20% less then market.

If you have any questions, if you want to do a 1 on 1 consultation, or are interested in increasing your production by 35% or more a month, call me.

I’ve been getting a lot of questions about the 2-1 buydown. So I’m going to be super quick, but I want to answer your questions on the 2-1 buydown.

Assume that the current 30 year market rate is 5.5% and you close the deal. Your first year payments are based on 3.5% because its 2% less than your 30 year fixed rate. Your next 12 month payments are based on 4.5% because its 1% less than the 30 year rate that you locked in at. The benefit is that you are saving.

Why only 2 years?

Because we all know that rates go up and down, but eventually they are going to be going back down. A lot of people don’t want to buy right now. Why? We are not in a correction. Properties are not dropping by 10-20%. Everything is still good. Why rent? Why waste money? Why give the landlord money? Get a mortgage interest deduction. Get a lower payment for the next year. Go buy that house. Spend that money. Take the savings. Take the tax deductions.

If you have any questions, if you want to do a 1 on 1 consultation, message or call me. Let me know how I can help.