Do you know about 2-1 buydowns? Essentially, it allows buyers to start their interest rate at 2% less than the current rate today for the first year, 1% less than the current rate for the second year, and at a regular rate for the rest of their mortgage.

What I love about this program is that it allows a borrower to graduate to a higher mortgage payment over time. Many borrowers today are finding it very difficult to purchase a home due to increased prices and interest rates. Rates this year have almost doubled in eight months, so this is a perfect solution for somebody to purchase a home with a lower rate.

How it works is that when you write the offer, you request that the seller gives you what is called a seller concession, which is essentially money given to you by the seller of the property. You can use that money towards your future mortgage payments.

The required money comes from your seller.

For example, let’s say today’s rate is 5.5%. That means that during the first year of the mortgage, you would be paying a rate of 3.5%, and during the second year of your mortgage, your rate would be 4.5%. From the third year on, the rate would be 5.5%. It allows you to step up to current rates without doing so immediately.

What I like about this program is the money required comes from the seller. It is not an expense to you as a homeowner. Sometimes clients ask, “Well, what if I only keep the home for a year and then sell it?” Any money that is left in that account that was given to you by the seller comes back to you. It’s your money once you own the house.

If you have any questions, please call or email me. I look forward to serving you.