Rockford Real Estate-Buy Down Mortgage

A great option for a newly established borrower, like a recent college graduate! 

• For the first 2 years of your loan, you get a lower, more affordable interest rate, which might help you get into your dream home sooner!
• In year 3, your payments are fixed for the remaining life of your loan, removing all uncertainty of future increasing payments associated with an adjustable-rate mortgage (ARM).

HOW THE 2-1 BUYDOWN WORKS: You, your builder, or the seller sets aside some of your principal and interest on your mortgage, in exchange for a discounted interest rate for the first two years of your mortgage. 

• In year 1, the interest rate is bought down 2% below the rate on your mortgage note.
• In year 2, the rate increases to 1% below the note rate.
• In year 3, the interest rate increases to the full rate as required by your note, and it stays at this fixed rate for remaining 28 years (years 3–30).

FOR EXAMPLE: If the interest rate on the mortgage note is 6%, then with a 2-1 Buydown Mortgage: 

• In year 1, the interest rate will be 4%.
• In year 2, the rate will be 5%.
• In years 3–30, the rate will be the full 6%.

Product Features:  

• Available for 30-year, fixed-rate Conventional, FHA, and VA programs.
• Minimum FICO credit score is 620.
• Purchase only, and it must be owner-occupied.
• The buydown account is established at closing and can be funded by the buyer, seller, or builder. The maximum seller or builder contribution is 6%.