One great opportunity that today’s buyers should take advantage of.
Have you heard of a 2-1 buydown? If you’re thinking about buying a house soon, you’ll want to be familiar with this concept and how to take advantage of it. If you’ve been staying on the sidelines waiting for rates to come down, we have a solution for you through the lenders that we partner with.
One great thing about the 2-1 buydown is that the seller pays for it, but it lowers the buyer’s monthly payment. Also, it’s a great alternative to a 30-year buydown, as many lenders realized that program wasn’t working for a lot of people. Instead, this helps lower your payments for the first two years of your loan.
To explain this concept, let’s say your interest rate would be 6.5%. With a 2-1 buydown, the seller would pay for a two-point reduction in your rate for the first year, bringing it down to 4.5%, then a one-point reduction for the second year, which would be 5.5%. Then in year three and on, your rate would be locked in at 6.5%. It won’t adjust or inflate, so if rates rise, you won’t be hurt by that.
“Buyers are gaining more opportunities, especially with the 2-1 buydown.”
If interest rates go down, you can always refinance. Therefore, your rate can’t go up, but it can go down—that’s the ideal situation! Many buyers are able to negotiate in today’s market, so this is something you should consider.
This is also popular in the new-construction market. Even with the lack of inventory, seller concessions are back and the market is leveling off. Buyers are gaining more opportunities, especially with the 2-1 buydown.
If you’re hoping to buy a home this year and want to know what the numbers would look like for your situation, let us know. Just make sure you don’t keep waiting because you’ll just face more competition and miss out on some of these amazing opportunities. If you have any questions or want help buying a home, call or email us today. We look forward to hearing from you!
