Home Buying Strategy: 2-1 Interest Rate Buydown

When interest rates are high or cash flow is tight, one strategy to temporarily reduce your monthly mortgage payment is the 2-1 buydown strategy when you go to purchase your home.

1. Negotiate a seller credit. Your lender will tell you the amount needed.

2. This 'buys down' or prepays the interest rate down by 2% in the first year and 1% is the 2nd year. So if your interest rate is normally 6%, the the first year rate and payment will be at 4 %.

3. When interest rates come down, you can refinance to a lower rate.

Of course, as your pay increases, your monthly payment will be easier to handle. Don't keep wasting your money on rent. We have strategies to help you buy a home you can afford. #buyahome #valoan #firsttimehomebuyer