Interest Rate Buy Downs

 The Mortgage U! Mortgage Education Made Easy

For all your mortgage needs:
Dave Zwierecki
Phone 888-418-4467

 Home  |  About Us  |  Calculator  |  Contact Us  |  News   |  Blog  |  Sitemap 

 

Google
 
 
Interest Rate Buy Downs
Interest Rate Buy Downs - The most common buy down is the 2-1 buy down. In the past, for a buyer to secure a 2-1 buy down they would pay 3 points above current market points in order to pay a below market interest rate during the first two years of the loan. At the end of the two years they would then pay the old market rate for the remaining term.

Rate buy down fee - This is a fee paid to ‘buy’ your interest rate down. It is also commonly referred to a as loan discount fee.

There is not always a consistent ratio between the discount points you pay and the amount it lowers your interest rate. The first point you pay may lower your interest rate by 0.25% but the second point may lower it by more or less than 0.25%. If you are interested in buying down your interest rate, have your mortgage broker work up several options. Make sure you calculate not only the cost and monthly savings, but the break even point as well.

Buy-down - "My broker says I can buy-down the rate on my mortgage. What does that mean, and how does it affect my payments?"

If you "buydown" the rate on your mortgage you are simply paying money up front to reduce the interest rate on your loan.

This is used to reduce your mortgage payment, and also may be tax deductible.

Buy-up - "My broker says I can buy-up my mortgage. What does that mean, and how can it affect my payments?"

 

Contact Us
If you have any questions regarding our products, you can contact us by calling or e-mailing us and we'll get back to you as soon as possible. Thanks!


Name
Current Address
City, State, Zip Code
Phone
E-Mail
Purchase/Refinance/Debt Consolidation

Comments/Questions/:



 
 
 Information listed above is to be used for educational purposes only and is not guaranteed

Home | Contact Us | News | About | Sitemap | Bad Credit | Homebuyer | Sitemap3 | Sitemap4 | Sitemap5 | Sitemap6 | Sitemap7 | FS Home Loan | No Money Down | First Security | Blog| Privacy Policy

Copyright 2007 First Security Financial Services, Inc.  All Rights Reserved... First Security Financial Services is a full service mortgage provider offering  mortgage educational tools in addition to hundreds of mortgage programs.                                                                                                                     Mortgage Broker | What Length Mortgage Loan Should I Get | Index | For Sale By Owner Tips