You’ve probably seen advertisements for Flat Branch’s buydown options, and are left wondering what is a buydown and why choose a buydown option? In short, a buydown offers a chance to lower your monthly payments at the beginning of your home loan. Flat Branch offers 3 options when it comes to buydowns: 1/0, 2/1, and 3/2/1.
What is a buydown?
A buydown functions to lower the interest rate on your home loan for a period of time. For example, with the 2/1 buydown, you will typically see a lower interest rate for the first two years of your home loan. With each year that passes, the interest rate slowly increases back to the current market rate. The biggest benefit of a buydown is paying a lower monthly mortgage payment for the beginning of your loan, allowing you to save money for other items like home repairs, furniture, and more.
What types of buydowns does Flat Branch offer?
Flat Branch offers 3 different types of buydowns: the 1/0, 2/1, and 3/2/1. The numbers may seem confusing, but they primarily indicate the length of time and general lowering of the rate you will receive attached to your mortgage payment. Your lender can dig more into each buydown option and what it entails, as it varies on a case-by-case basis.
Generally speaking, with a 1/0 buydown, you will see a lower interest rate for approximately 1 year. Similarly, with the 2/1 buydown, you will see a lower interest rate for approximately 2 years, and with the 3/2/1, you will see a lower interest rate for approximately 3 years.
Remember: the interest rate varies and will return the market value after the length of the buydown.
Why choose a buydown option?
The greatest benefit to a buydown option is lower monthly payments! While a buydown is a temporary lowering of the interest rate on your home loan, any amount of reduced payment can be helpful when you first purchase a home. Additionally, the buydown option comes at no cost to you, the buyer. With the buydown option, it is most often the seller paying to lower the interest rate.
With Flat Branch, there are many options to lower your monthly mortgage payments for a period of time. Never hesitate to reach out if you have questions or want to learn more about how these options can apply to you!
