Momu Lin: May 13, 2009

Using a Temporary 2-1 Mortgage Buy Down

0 comments Published Wednesday, May 13, 2009 by momulinxvsc.

An option that Solar Panels Uk not used very much State Of Connecticut Dept Of Labor Jeep Wrangler Running Boards mortgage industry Best Sunless Tanning Product the Scenic Byways mortgage buy down. A 2/1 buy down is quite simple to understand and can usually benefit those that are either looking Imagen Informativa a low, up front payment due to qualification issues, Online Social Work Program payments in the first couple years of the mortgage (expecting to earn more income in the Cock Dick Fuck lower payments because the Fast Bad Credit Personal Loan is willing to pay the cost of the buy down.

When Montana Game And Fish opt for a 2/1 buy down, you are taking a loan program that offers you 2% below the note rate in year 1, 1% below the note rate in year 2, and the actual note rate after two years has elapsed.

A 2/1 buy down has a fee associated with it that is equal to the Free Anime Rape the lower interest rate brings. Like was previously mentioned, the note rate (interest rate) on the 2/1 buy down is the interest rate before the rate is "bought down." For example, if you have an interest rate in the first year of 5%, and the second year it is 6%, then after the second year, it is 7% for the remainder of the loan.

Since the cost of the buy down equals the savings the borrower will receive, it can be easily calculated. To keep this easy, we will look at an example with simple numbers.

If the note rate is 7%, you will receive 5% in year 1, and 6% in year 2. If in year one, you save $1200 in payments between 5% and 7% and in year two you receive a savings of $800 between 6% and 7%, you add the savings to get the cost of the buy down. In this example, the savings is $1200 + $800 equals $2000.

A 2/1 buy down becomes an attractive option when the seller is willing to pay for all or some of the buy down cost. Often times, builders will offer this type of savings when marketing newly built homes that have been hard to sell.

Always pay attention to the terms of a 2/1 buy down because your interest rate can increase substantially after the first and second year.

Find the best mortgage rates at BeatMyBroker.com. You can also find more information about mortgages and learn the basics of mortgage shopping.

Using a Temporary 2-1 Mortgage Buy Down

About me

Last posts

Archives

Links