How to Benefit from a 2/1 Temporary Buydown

The Temporary Buydown is a great tool to significantly lower your monthly payment the first 2 years and help you achieve the dream of home ownership right now!

Video Summary

A temporary buydown is a program that decreases your mortgage payment equal to a 2% interest rate reduction the first year and 1% rate reduction the second year.

Detailed Example: LOAN AMOUNT: $500,000

NOTE INTEREST RATE: 6% $500,000 @ 6% = $2997/mo P & I payment

Year 1: $500,000 @ 4% = $2387/mo $610 savings per month x 12 months = $7320

Year 2: $500,000 @ 5% = $2684/mo $313 savings per month x 12 months = $3756

Total Savings Calculation: $7320 (yr 1) + $3756 (yr 2) = $11,076

Your real estate agent negotiates a credit from the seller to cover at least the total savings you receive. Great tool to use as a stepping stone to get you into the real estate market while sellers are willing to negotiate and provide credit to buyers. If rates drop in the next two years, then you can refinance to a lower permanent fixed rate.

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Jay Miller

Certified Mortgage Planning Specialist (CMPS) with more than 22 years residential mortgage experience. Looking to buy a new home or invest in real estate but feeling lost in the maze of mortgage qualification and personal finance? Don't worry, I've got you covered! My mission is to take the mystery out of the home buying experience and empower you with the knowledge you need to make informed financial decisions. It's true, most of us are never taught about credit or personal finance in school and many lenders fall short when it comes to providing educational guidance. But fear not, because with my guidance, you'll be well-equipped to navigate the housing market with confidence. Whether you're a first-time home buyer or a seasoned real estate investor, my goal is to arm you with the tools and information you need to make the right financial choices for you and your family. I'm always looking for feedback and eager to assist you on your home buying journey.
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Jay Miller NMLS ID: 657301

Seasoned mortgage professional with over 22 years of experience in Hawaii Real Estate. With a passion for helping clients achieve their homeownership dreams, I am known for being super responsive and providing exceptional customer service.

I believe an informed homebuyer is a happy homebuyer, which is why I take the time to educate my clients on the ins and outs of the mortgage process.

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