How to Lower Your Mortgage Interest Rate
/Dan Hubrich of Mountain View Mortgage is back and this month he’s explaining how to lower your mortgage interest rates with the 2-1 Buydown Program.
Rates have been increasing this year but there is a really neat loan product that I’d like to showcase this month. It’s called a 2-1 Buydown. With real estate inventories improving and the market shifting back to a more normalized market, more sellers are willing to contribute towards closing costs now. One thing you can use that money for is to buy your interest rate down on a new loan. The easiest way to understand how it works is that the first year of your loan, you would have a rate 2 points less than the going rate. Then in year 2, the rate would be 1 point lower, and then in year 3 forward it goes to the normal rate. So if rates are at 4.5% today, the first year of your new mortgage would have a rate of only 2.5%. Year 2 would be 3.5% and then year 3 forward would be 4.5%. It’s a great way to give yourself some temporary relief from inflation, etc. and to make a new home purchase more affordable in the first years. If you’d like more information please reach out to me anytime.