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2-1 Buydowns in a Nutshell


You can get into a house at a lower rate with a 2-1 buydown.

Have you ever heard of a 2-1 buydown? They are becoming increasingly common lately, so I’m here today to make sure you’re informed. To bring in an expert, I recently spoke with J.C. Diaz from American Pacific Mortgage. This information can help with your real estate plans. 

2-1 buydowns are mortgage programs that allow you or the seller to buy down your rate to lower your payments for a set time, usually between one to three years. During this time, the rate gradually rises back to the original rate. The intent of this program is to get a lower rate while the market stabilizes before refinancing down the road.

How can you use this program if you’re looking to write an offer or if you’re a seller trying to incentivize buyers? It comes down to how much the seller wants to provide to allow the buyer to take advantage of these programs. The rate can be bought down by up to 3%. Depending on the loan amount and interest rate, buyers could save up to $800 per month when they use a buydown program.

“No one knows what the market will do next, so it’s important to lock down a house now.”

The goal is to secure your home first with a payment you can afford. Then we allow the market to get into a better situation, and when we recognize an opportunity to refinance, that’s when we make it a true 30-year fixed loan. I recommend talking with a loan officer to ensure that when you’re ready, you make informed decisions.

In these unprecedented times, this program is very useful. No one knows what the market will do next, so it’s important to lock down a house now. If you have any questions about 2-1 buydowns or what’s happening in the market right now, don’t hesitate to reach out to me by phone or email. I’d love to talk with you or connect you with J.C. 

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Bought a Condo home in 2019 in Waukee, IA. Jasmina is awesome. She is very helpful and patient. She knows a lot about the real estate area here in Iowa and I’m so grateful that she was able to find me my new home. I trust her and she is very easy to work with.