Why the high mortgage rates aren’t stopping everyone

If mortgage rates are causing you to take a step back in searching for a home, but you also feel like it would be a good time to jump in while there are less buyers to compete with, let me tell you about an option you have – a 2/1 buydown creates a 2% lower rate your first year and a 1% lower rate the second year.

This obviously has an upfront cost to it, but it would be something that you would ask for from the seller as a credit at closing so it would be no charge to you. After the 2 years, your rate would go back up to the original locked in rate but you could then refinance, assuming the rates have gone down.

So, if you lock in your rate at 7%, the rate you would be paying for the first year is 5%, the second year would be 6% and then it would go up to 7 until you refinanced. This gives a significant chunk off of the monthly payments for the first 2 years compared to if you were to ask the seller to lower the price instead of putting that money toward a 2/1 buydown. Call me if this seems like a good fit for you and we can discuss together with a lender the real numbers of how this would impact your monthly payment.