Posted by Barry Wolfert on Tuesday, October 4, 2022 at 10:58 AM By Barry Wolfert / October 4, 2022 Comment
Buyers this product will help you afford a new home! The obvious benefit is you get an interest rate 2 points under market for the first year then 1 point under for second year, and years 3 – 30 would be at the current rate when you lock.
Some guidelines on this:
• Interest savings must be completely paid for by the seller
• Buyer must qualify based on the Full Note Rate
• FHA, VA, Conventional loans
• Conventional w/less than 20% down max seller contribution of 3% of purchase price; 20% or more down, max seller contribution of 6% of purchase price.
• FHA max seller credit of 6% no matter the down payment.
• Great opportunity to help Sellers get a property sold without affecting the sales price.
• Creates monthly savings the first two years of ownership while you buy furniture and get settled in to your home.
• This loan can be refinanced with no penalty when rates come down again.
For Example: (3.5% down FHA - 640 credit; $350,000 loan amount)
Year 1: 3.869% (full rate – 2%) Monthly Payment $1,700.19 APR 4.922%
Year 2: 4.869% (full rate – 1%) Monthly Payment $1,913.49 APR 5.939%
Years 3-30: 5.869% (full rate) Monthly Payment $2,138.94 APR 6.957%
*** Buydown costs calculation***
Year 1 Savings (2138.94 – 1700.19 = 438.75; 438.75 x 12 = 5265)
Year 2 Savings (2138.94 – 1913.49 = 225.45; 225.45 x 12 = 2705.40)
Year 1 + Year 2 (5265 + 2705.40 = $7970.40 saved in monthly payments for Buyer)
* In this example borrower must negotiate for at least $7970.40 in seller paid closing costs *
Rates change daily, so please reach out for current day's pricing.
Contact us to find out how to take advantage of this great mortgage program!
Information courtesy of Sean Trombetti with Reliant Mortgage Solutions. NMLS# 214727 GRML# 27269
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