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Your Guide to Rate Buydowns

Navigating the current real estate market as a buyer? You might have stumbled upon the term "rate buydown." If you're wondering what it's all about, you're not alone! Many folks find themselves puzzled over how rate buydowns function, which type to go for, and how it could be a game-changer for you and your loved ones.

What is a buydown?:

Imagine securing a deal on your mortgage where you pay less interest initially - that's a buydown for you. It's a strategy aimed at snagging a lower interest rate for the first chunk of your mortgage term, or perhaps for its entirety.

The 2-1 Buydown Breakdown:

Opting for a 2-1 buydown means you'll be paying less for the first two years. Each year, your interest rate ticks up by 1%, until the third year rolls around, when you start paying the full interest rate. The early years' savings are essentially subsidized by the seller to the lender.

Weighing Buydowns: The Pros and Cons

Deciding on a buydown isn't one-size-fits-all. It depends on your loan size, the starting rate, potential interest savings, and your future income outlook. How long you plan to stay in the property also plays a role.

Resources:

Check out the example videos in the sidebar to see real-life scenarios demonstrating how a buydown could work to your advantage. These quick guides will give you a clear understanding of the benefits and how they might apply to your situation. Don’t miss out on these valuable insights!


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"Shelby and Lois provided timely and great communication. Shelby’s knowledge allowed me to get a great rate for these times. I always felt like a person and not just an anonymous client."

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"Shelby went above and beyond to help my first time home buyers. I’m excited to continue to work together in the future!"

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"Creative and non stop until the job was done. My wife and I both agree we felt that Shelby went above and beyond to get us the approval and rate we needed. She even went as far as to work on a Saturday close to our closing date to make sure everything was perfect. I am excited to refer others to her in the future. Thank you, Shelby!!"

austin l

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"Shelby was fantastic!! She is super communicative and creative. We felt very supported during the stressful experience of home buying in this market."

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