How You Can Lower Your Interest Rate Today

Do you want to buy a home, but you are concerned you won’t be able to afford
the home you want because interest rates are too high? You are not alone! A
high interest rate can take a home you could afford, and push it out of your
price range. I am going to share one of my favorite tools I use with my clients to
lower their interest rate, and get them into their new home!
Buying a home is a major financial decision, and many home buyers look for
ways to make the purchase more affordable. One option that is worth
considering is a buy down. In this post, I will explain how a buy down works
and how it can help a home buyer.
Please consult a loan officer for more information. I can recommend two
amazing loan officers if you need a recommendation. Click here to set up a
complimentary consultation.
A buy down is a type of mortgage financing that involves paying additional
upfront costs to reduce the interest rate on the mortgage. This can make
monthly mortgage payments more affordable, which is especially helpful for
home buyers who are on a tight budget.
Here’s how a buy down works: Let’s say you are buying a home and have been
offered a 30-year fixed-rate mortgage with an interest rate of 6%. If you choose
to do a buy down, you would pay additional upfront costs to reduce the interest
rate on the mortgage, such as paying points. Points are a percentage of the
loan amount, and each point typically costs 1% of the loan amount. In this
case, you might pay 1 or 2 points to reduce your interest rate.
For example, if you pay 1 point on a $200,000 loan, you would pay $2,000
upfront. This could potentially reduce your interest rate by 0.25%, which would
lower your monthly mortgage payments. Keep in mind that the exact amount
you can reduce your interest rate will depend on the lender and the terms of
the loan.
A buy down can be especially helpful for home buyers who want to keep their
monthly mortgage payments low. For example, if you are a first-time home
buyer and are just starting out in your career, you may have limited income and
want to keep your monthly expenses as low as possible. A buy down can also
be helpful for home buyers who are planning to stay in their home for a longer
period of time and want to save money on interest over the life of the loan.
However, it’s important to weigh the upfront costs of a buy down against the
potential savings over the life of the loan. For some home buyers, the upfront
costs may not be worth the potential long-term savings. It’s important to work
with a reputable lender and to carefully consider all of your options before
making a decision.
In summary, a buy down is a type of mortgage financing that can make monthly
mortgage payments more affordable by reducing the interest rate on the
mortgage. It can be a helpful option for home buyers who want to keep their
monthly expenses low or who are planning to stay in their home for a longer
period of time. However, it’s important to carefully consider the upfront costs
and potential long-term savings before making a decision.
Have questions? Want to know what you would qualify for if you do a
buydown? Let’s chat more and we can look at your specific situation and come
up with a solution that works for you. Click here to set up a complimentary
consultation with me!