When you are interested in purchasing a home, especially in a competitive market, there are a few different tricks that you can use to get the house that you want for the right price. One of these tricks is buydown financing. Buydown financing is one way to get a more favorable rate and end up with the deal that you’ve always wanted. What is buydown financing, and could it be a good fit for your situation?
What Is Buydown Financing?
A mortgage buydown is a type of technique that is used to give buyers lower interest rates for a certain period of time. Depending on the type of buydown financing that you receive, you may lower the amount that you are paying for the duration of your mortgage or just for a year or two. No matter what, the common factor in all buydown financing is a reduced interest rate.
How Is Buydown Financing Possible?
Buydown financing is one type of perk that a seller might offer to benefit the home buyer. In a sense, it is almost like a mortgage subsidy that is provided by the seller. If the seller uses buydown financing, he will put money into an escrow account. The lender will draw from this escrow account to help subsidize the mortgage payment during the first year or beyond. As a result, the homeowner will be paying less on their mortgage, and the mortgage company will still receive the full payment.
What Are the Benefits of Buydown Financing?
Now that you have the answer to ‘What is buydown financing?’ it’s time to consider who might want it. Buydowns are an excellent way to entice buyers who might not be interested in purchasing your property otherwise due to cost. Additionally, it benefits buyers by lowering the amount that they need to pay during the first or second year of being in their house, which gives them more to put towards moving expenses or customizing the home.
More About Pure Finance Group
Pure Finance Group is a company that home improvement businesses can use to cut business costs, save on payment processing systems, and offer financing options to customers.
Explore Mortgage Buydowns with Pure Finance Group
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