Have You Heard Of Temporary Buy Downs

Dated: August 15 2018

Views: 246

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

623.236.5843

stephen@thecottongroup.net

Latest Blog Posts

You Gotta Be Quicker Than That

Homes are moving super fast.  This house was no exception... If you are looking for a home in this area, we will have an agent get a hold of you shortly, and send you everything that is still

Read More

Fixing Your Credit Is As Easy As 1 2 3

We all could use a little help on credit, me included.  In my time, helping home buyers reach their goal of home ownership, I have learned a few tricks of the trade to help get that score up 20

Read More

1015 E Myrtle

What a transformationThis 3 bed 2 bath home has a HUGE living space, open floor concept, custom counter tops, and a sparkling pebble tech poolHere's the link for the slide show.   And if

Read More

Rent To Own A Home Has Never Been Easier Or Cheaper

If you are reading this Post, this blog, whatever it is, you probably have a little interest in getting into a home that you will eventually buy.  I don't blame you, people throw away 10's of

Read More