What are Buy-downs and Discount Points?A buydown is a way to lower your initial interest rate on your mortgage. You accomplish this by paying additional points on your mortgage. A point is simply one percent of your loan total. The buyer usually has the option to pay as many points as they would like. Each increasing point will lower your mortgage rate a certain level. Buy-Downs - The payment of additional points in return for a lower mortgage rate Discount Points - Each discount point equals one percent of your loan amount How much are Closing Costs and what should be included in them? Do you need help with a Bad Credit Loan? Get FHA Loan and VA Loan information. Temporary buydowns are also available. For a small percentage fee upfront, temporary buydowns simply lower the interest rate for the first few years of the loan. They are used to help a borrower qualify for a higher loan amount, because they can qualify at the first year's rate, not the higher rate. Learn all about Mortgages: Loan Types > Property Types > Loan Term > Mortgage Lenders > Loan-To-Value > Prequalification > Buy-Downs/Discount Points > Closing Costs You may fill out an advice form or call 800-930-9201 to get additional advice about how you can use Buy-Downs to save you money over the term of your loan. Would you like information about a VA Loan? |
If you have questions or would like help with your mortgage, you can call us at 800-930-9201.
"James Chapman was more than helpful in securing our loan. He was very knowledgeable and an excellent source for any questions we had. I would recommend him to anyone looking for a loan officer who knows what they are doing. My experience with James was one that I will use to compare all future transactions. James took time out of his day to make sure that we completely understood everything." -L. Serna
Las Cruces, NM United States Army |
