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What is a 2/1 Buydown and How Can it Help?
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Home buyers and sellers are getting creative to lessen the blow of rising interest rates. As a result, more people are exploring temporary interest rate buydowns. In most situations, the temporary rate buydowns involve sellers taking some of their profit from the sale and putting it toward helping the buyer make payments at a lower interest rate. This is helping homes sell and buyers buy while rates are high.

Buyers can be a little more relaxed. They can actually have a shot at making one of their offers stick. They're not competing with 40 other people, so this is the first time in two years that a little bit of a window is opening for buyers to jump through. However, buyers also face rising interest rates which make payments higher, qualifying for a mortgage tougher, and homes more costly over the life of the loan. People were expecting 3 percent rates to last forever and that's not going to happen any time soon. With that said, a temporary rate buydown may help. A temporary interest rate buydown is when a seller concession is used by a buyer to lower their interest rate for typically one to two years. Some sellers may opt to help buydown an interest rate instead of making a price cut on their listing. While either option could net a seller the same profit after closing, the buydown makes the listing stand out by initially saving the buyer more each month.


After the first one to two years, whichever is opted for, the interest rate will go back up, but buyers have more time to save or take advantage of a program like my new Mortgage+ program where I refinance them for FREE when rates meet their specific needs.

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