A 2/1 buydown is a financing option that is available where the first two years of a mortgage will have a lower interest rate. In the first year of your mortgage, the interest rate will be 2% lower, in the second year it will be 1% lower.
To even be able to potentially get a 2:1 buydown, your mortgage needs to have a fixed interest rate. Aside from that, some determining factors for qualification can include credit score, income to debt-to-income ratio (DTI), and other metrics or numbers.
Sellers and/or builders pay money upfront to the buyer's lender in exchange for a temporary reduction in the mortgage interest rate.
Yes, you can refinance out of a 2:1 buydown, it depends on your current financial situation and other fine details about your agreement.
Yes, you can employ the 2-1 buydown on a fixed-rate Federal Housing Administration (FHA) loan.
Create Date: September 12, 2024
Last Modified Date: September 12, 2024
