Buy More House With A Buy Down Mortgage

Buy More House With A Buy Down Mortgage



Buy More House With a​ Buy Down Mortgage
A buy down mortgage allows you​ to​ buy more house with your income and enjoy low monthly payments for a​ couple of​ years .​
With reduced payments,​ you​ can pay for move in​ costs and furnishings .​
You also qualify for a​ larger mortgage due to​ lower monthly payments.
Buy Down Mortgage Terms
Buy Down mortgages come in​ three packages .​
a​ temporary buydown loan,​ the​ most common,​ starts with a​ discounted interest rate for one to​ three years that increases to​ a​ fixed rate in​ yearly increments .​
You pay the​ difference in​ interest payment in​ an​ initial payout to​ the​ lender at​ the​ start of​ your home loan .​
Some lenders will pay this lump sum,​ but then charge a​ higher interest rate for the​ loan.
For example,​ you​ can have a​ mortgage with a​ 6% interest rate that is​ reduced to​ 4% the​ first year,​ then raised to​ 5% the​ second year,​ and finally reach 6% on​ the​ third year .​
The difference in​ the​ mortgage payments for the​ first two years will need to​ be paid to​ the​ lender at​ the​ time of​ settlement.
A compressed buydown mortgage works like a​ temporary buy down loan,​ but interest rates rise every six months .​
a​ permanent buydown loan has a​ low interest rate for the​ life of​ the​ loan,​ but that difference still has to​ be prepaid to​ the​ financing company.
Buy Down Mortgage Benefits
The chief benefit of​ a​ buydown mortgage is​ that you​ can qualify for a​ larger loan amount based on​ your income .​
This can be especially helpful if​ you​ expect your income to​ increase in​ the​ near future.
In addition,​ initial low monthly payments allow you​ to​ pay for the​ many expenses associated with buying a​ home .​
The cost of​ moving expenses,​ home furnishings,​ and landscaping can quickly add up those first couple of​ years.
Buy Down Mortgage Considerations
Buy Down mortgages should be considered along with other types of​ mortgages .​
In some cases if​ the​ large initial payment was used as​ part of​ a​ down payment,​ you​ may find better terms with a​ fixed rate or​ ARM .​
You may also find that if​ you​ are planning to​ move within seven years,​ an​ ARM can give you​ the​ same low monthly payments without the​ upfront cost.
No matter what type of​ home loan you​ choose,​ research lenders and loan terms beforehand .​
Compare interest payments and base your decisions on​ your financial goals.




You Might Also Like:




No comments:

Powered by Blogger.