Seller Buydowns for Investment Property

3-2-1 and 2-1 seller buydowns allow homebuyers to have below market interest rates. The seller is essentially prepaying a portion of the buyers mortgage payment to effectively “buy down” the payment for a specific period of time.

With a 2-1 buydown, the interest rate will start off 2 percent lower than the note rate for the first year, then 1 point lower for the next 12 months. The third year and remaining term, the interest rate (and payment) will be the actual note rate.

The 3-2-1 buydown has an interest rate that is 3% lower the first year, 2% lower the second year, 1% lower the third year and the fourth year and remaining term, the buyer pays the note rate.

The cost of the 3-2-1 and 2-1 buydowns is the difference between the note rate payment and the reduced payments.

Typically, these temporary buydowns have only been available for owner occupied properties. I’m pleased to share with you that we have this available for 1-4 unit investment properties too!

A 3-2-1 buydown for a non-owner occupied property can really be a great tool for investors by having a dramatically reduced payment for the first couple years allowing for an improved cash-flow.

Bonus: if the property is refinanced during the buydown period, the homeowner receives the balance of the remaining reserved buydown funds.

If you’re selling a home, offering a buydown can help attract potential buyers.

Please contact me for more information.

What are Seller Buydowns?

“Seller Buydown” seems to be a very trendy phrase these days since interest rates have moved higher. There are a couple different types of Seller Buydowns that help make homes more affordable for potential home buyers. [Read more…]

I’ve moved!

After 23 years of helping people with their mortgage needs at Mortgage Master Service Corporation, I have made a move to New American Funding. You can still reach me at my same phone number and email. And you can still click the “Get Approved” link above to start a loan application with me. I am still here to help you (and anyone you care about) with your home loans. [Read more…]

Mortgage Rates Improved!

Mortgage interest rates are having one of their best days in months following the CPI report released this morning showing better than expected data on inflation. Yes, inflation is still high but this morning’s report indicates that it may be starting to correct. [Read more…]

The FIRST thing you need to do BEFORE applying for a mortgage or get preapproved for ANY credit

WARNING: Rant ahead!

When you meet with a mortgage professional and allow them to pull your credit so that you can be prequalified for a mortgage to buy or refinance a home, your information is provided to countless other lenders. Before you become furious with your mortgage lender, please know that it’s not their fault! [Read more…]

Freddie Mac PMMS: Mortgage Rates on the Rise

Freddie Mac’s Prime Mortgage Market Survey illustrates how mortgage interest rates have continued to push higher. The graph below is based on an average from last week so the rates are “expired”. This graph is to just give you an idea of how mortgage rates are trending.  NOTE: Please click here for current mortgage rates for your personal scenario.

[Read more…]

Fannie Mae projects Mortgage Interest Rates around 4.5% in 2023

Fannie Mae recently released updated projections for interest rates next year. An average of 4.500% for a 30 year fixed would be an improvement from what home buyers and homeowners have experienced since the jump in interest rates that that happened the second quarter of this year. We have to remember that this is just a prediction and many factors influence the direction of mortgage interest rates. [Read more…]

Fed increases Funds Rates by 0.75 Percentage Points

Today, in a move that probably surprised nobody, the FOMC increased the Funds Rate by 0.75 percentage points to 2.500%.

In addition, the Fed reiterated their commitment to reduce their holdings in Treasury/mortgage-backed securities and agency debt.

Mortgage rates reacted favorably as this increase was highly anticipated by the markets.

What will not be reacting so favorably are credit cards, home equity loans and other debts where interest rates are attached to Prime as the Prime Rate follows the Fed Funds rate.

PLEASE pull out your credit card statements, and any other debts to do a “checkup” on what your interest rates are. I’m happy to review your credit cards with you to see if refinancing or a second mortgage makes sense for your financial scenario.