Worried about rising mortgage rates? A 2-1 buydown could make a home purchase more affordable.
This type of financing agreement offers a lower interest rate for the first two years of the mortgage, typically a 2% discount in the first year and 1% in the second year.
For example, if you lock in a 6.5% 30-year mortgage with a 2-1 buydown, the first year’s rate might be 4.5%, while the second year’s rate would be 5.5%. After that, the rate would go up to 6.5% for the remainder of the loan.
Sometimes motivated home builders or sellers will offer to cover the cost of a 2-1 buydown as an incentive.
Interested in learning more about 2-1 buydowns and other homebuyer incentives we’re seeing in the market? Reach out for a free consultation!
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