Have You Heard Of Temporary Buy Downs

Dated: 08/15/2018

Views: 175

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.

Stephen Cotton

The Cotton Group of West USA



Latest Blog Posts

Open Houses In Waddell

Thought I would help out all of you home buyers out there with a list of current open houses planned in Waddell.  So if you're looking for a home, use this link each and everytime and the open

Read More

Now Is The Time To Buy

"I need to wait, save money for a larger Down Payment".  Hear this all the time, BUT is it smart to wait?  Years ago maybe. Today all it does is cost you thousands of

Read More

Fresh List Homes On Golf Course

Anyone thinking about moving to a beautiful golf course community, here's a list of ALL phoenix area golf course homes.   If you see a home you're interested in call me, Jim Yungner @

Read More

Renters Are Looking To Be Buyers

Traditionally, the change of the season, the one season not summer, most renters are looking at their taxes coming up, and looking at the opportunity to purchase a home, and become a part of the

Read More