COME TO MY OPEN HOUSE TODAY AT 7458 W. RANCHO DRIVE IN GLENDALE. IT IS A 4 BEDROOM 2.5 BATH 2406 SQFT HOME WITH AN EXTENDED PATIO, BBQ AREA AND 10,012 LOT SIZE. YOU WILL LOVE THIS HOME!! TEXT "
Have You Heard Of Temporary Buy Downs
Temporary buy down of the current interest rate is a great way to get a home you want to become affordable. Ease into the larger payments.
Here's the example which isn't too far from where we are at, so a darn good example really.
Year 1 3%
Year 2 4%
Year 3 5%
Take the payment difference between year 1 and 5% plus the difference in year 2 and 5%...prepaid up front...say from sellers concessions.
I'm not a lender, but I have an app, so that makes me dangerously close with numbers. Let's say you buy a 250k home with a 3.5% down FHA program, here's what you expect to pay monthly at the different rates.
250k home at 3% would be about 1272/mo (Principle Interest Taxes Insurance)
250k home at 4% would be about 1406/mo (PITI)
250k home at 5% would be about 1550/mo (PITI)
So you can see the value of doing the Temporary Buy Downs. The question is, who does them? Not a ton of lenders, but I got a guy. :) If you're looking to purchase a home, and you can qualify for the home with the 5% interest rate, why wouldn't you like to save about 280/mo? If you're a new buyer maybe out of college, this might help you get your finances in order, heck....anybody this can help get their finances in order. Let me know if you'd like more information on how it would work.
The Cotton Group of West USA