Increase your buying power with a temporary rate buydown
Intercap Lending offers temporary rate buydowns, a strategic tool that can give you more buying power in today’s competitive market. Here’s how it works: a rate buydown temporarily reduces your interest rate for the first few years of your mortgage. Think of it like a discount on your monthly payment, freeing up some of your budget at the beginning of your mortgage:
1-0 Buydown
- First Year: Payment 1% less than note rate
1-1 Buydown
- First Year: Payment 1% less than note rate
- Second Year: Payment 1% less than note rate
2-1 Buydown
- First Year: Payment 2% less than note rate
- Second Year: Payment 1% less than note rate
3-2-1 Buydown
- First Year: Payment 3% less than note rate
- Second Year: Payment 2% less than note rate
- Third Year: Payment 1% less than note rate
By lowering your initial monthly payments, a rate buydown can make your dream home more affordable, especially in a market with high interest rates.
So what can you do next?
Contact your Intercap loan officer! Your free consultation will give you valuable insight into your options based on your unique goals and situation.
Temporary Rate Buydown Calculator
2/1 Buydown Example
For the first year of the mortgage, the borrower’s monthly payment is based off an interest rate that is 2% lower than the note rate. For the second year of the mortgage, the monthly payment is based off an interest rate that is 1% lower than the note rate. In year three, borrowers return to the full note rate and corresponding payment for the remainder of the mortgage term.
Comparing Seller Concession Options
In this scenario, the seller opts to drop their price or offer a temporary 2/1 buy-down. The temporary buy-down option costs a lot less to the seller while providing a significant monthly savings to the buyer for the first two years.
