Mortgage Rate Buy Down Explained

Couple in real estate office having their mortgage rate buy down explained

There’s no doubt that purchasing a new home is important and choosing the right lender, community, and location – is crucial. When it comes down to getting a mortgage, you are obligated to pay for the advantage of borrowing money as well as the purchase price of your new home. It is no secret that interest rates have been on the rise due to fluctuating market prices caused by inflation. However, there is something you can do to ensure that your mortgage rate is as low as it can possibly be. That is why Jenuane Communities and our preferred lender, Guild Mortgage, have decided to buy down your interest rate. Continue reading to learn more about the advantages of our rate buy-down program. After all, you deserve to buy the home of your dreams no matter what obstacles the real estate market presents in 2022.

What is a Mortgage Rate Buy-Down?

Mortgage rate buy-down programs are designed to lower interest rates for the entire term of the loan in exchange for a small upfront fee, known as mortgage points. Mortgage points are collected at the time of closing so you don’t have to worry about paying until you seal the deal.

The amount you pay depends on the amount you take out on the loan. Each mortgage point that a borrower pays is equivalent to 1% of the entirety of the loan amount. This process ensures your mortgage rate will be much lower than the one typically offered after the approval process has been completed. As a result, you will be saving money on your monthly mortgage payments and paying less interest overall for the length of your loan.

While a rate buy-down will increase your closing costs by a small amount, it is essential to know that you may be able to write off the buy-down mortgage cost during tax season. Tax deduction, anyone? Furthermore, since mortgage rates are forecasted to climb this year, the mortgage rate buy-down program can be a helpful method to protect your assets against rising mortgage rates.

Here Are The Advantages

Mortgage rate buy-down programs have multitude benefits for home buyers. Whether you are purchasing your first home or looking for another property to acquire. Mortgage rate buy-downs give buyers peace of mind, knowing they have done everything in their power to lower the cost of their monthly payments for the full term of the loan. In short, locking in your rate now will save you money over time, and that is a huge benefit to new homeowners.

Additionally, if your income disqualifies you from buying the home of your dreams, a mortgage rate buy-down may enable you to qualify with a reduced interest rate. Not to mention when you buy a new home, you will have invested in an asset that will potentially continue to gain value over time. Talk about saving thousands of dollars while gaining equity all at the same time!

Save Money With Rate Buy-Downs

All things considered, mortgage rate buy-down programs authorize buyers to decrease their monthly payments for the life of the loan due to lower interest rates. As a result, home buyers will have more money in their pocket to save or spend on things they love.
While mortgage rate buy-down programs may not be ideal for all buyers, it is important to consult with a trusted mortgage lender to explore all of your home buying options. If you’re ready to move forward and discover the money-saving options available to you, contact a Guild Mortgage representative to get started.

Don’t Miss Our Summer Special

Ready to get started? Here at Jenuane, we want to help you make your homeownership dreams come true. That is why we have teamed up with Guild Mortgage for a rate buy-down summer special with additional incentives!
Stay tuned for more updates on this exclusive summer special offer!

Get Started With Our Concierge Team

A brand new home is still within reach! Contact us today to get started. Our Concierge Team is available seven days a week to answer any additional questions or simply help kick-start your home buying journey. Call us at 775.379.8100 or email Concierge@JCommunities.com to begin.

PresGroup Concierge Team