How does a mortgage rate buydown work? Texas Premier Mortgage is now offering Temporary Rate Buydowns.
These give borrowers the opportunity to lower their interest rate at the start of the loan. It’s a great option for borrowers with excess seller credits to use.
What? Option for borrowers to reduce their interest rate and in turn the monthly payment for a limited period of time through an upfront lump sum fee
Who? Only seller concessions can pay the upfront lump sum fee – seller paid temporary rate buydown
How? Borrowers must qualify off of the note rate
Texas Premier Mortgage PARAMETERS
- FHA, VA and Conventional Purchases only
- No USDA or Non-Agency products
- Conventional = Primary and Second Homes
- FHA and VA = Primary only
- 2-1 and 1-0 tiers
- Temporary Rate Buydowns are not available for manufactured homes
- Year 1 – 2% lower than the note rate
- Year 2 – 1% lower than the note rate
- Year 3 – Full note rate
- Year 1 – 1% lower than the note rate
- Year 2 – Full note rate
Loan Amount: $350,000 / Interest Rate: 5% / P&I Payment: $1,879
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NOTE: If the property is sold by the Borrower and the mortgage is prepaid in full during the buydown period, the non-disbursed and available buydown funds shall be credited to the unpaid principal balance of the mortgage.
NOTE: If a refinance occurs, the buydown funds are held in an escrow account. These funds will be used to pay down the principal of the new loan.
- Great opportunity to help Sellers get a property sold without affecting the sales price. With the rising interest rate environment, sellers love this product. The benefit goes directly to the borrower.
- A great way for borrowers to use any excess seller concessions
- Creates monthly savings to allow the borrower to get settled in their home and be more financially flexible to purchase furniture, etc.
- In this market and with our partners, borrowers will more than likely be able to refinance to a lower rate than the one they will adjust to after the 2 years
- These new options will allow borrowers additional purchase power in certain situations and will allow brokers to continue to use UWM for more of their business
BROKER TO BORROWER / REAL ESTATE AGENT
- Increases borrower financial flexibility while adjusting to the first few years in a new mortgage
- Give real estate agents more flexibility in negotiations and allows more of their offers to be accepted
REAL ESTATE AGENT TO CONSUMERS
- Gives the seller more options and avenues to sell their homes faster
- Meets the needs of all consumers
- Relevant for today’s market
For more information about Buydown loans, their benefits and loan options, and how it may apply to you, please contact us directly or submit the quick quote form on this page!