Interest Rate Buydown Mortgages

If you opt for an interest rate buydown mortgage, this means that the seller will pay an amount to the SC mortgage lender so that the lender can give you a lower rate and lower monthly payments. Buydowns can occur in all types of SC mortgages. In a buydown mortgage the interest rate is reduced for the first 2 years of the mortgage then slowly grows to the final interest rate. The reduction that takes place in a 2-1 buy down is 2% less than the final mortgage rate for the first year and a reduction of 1% for the second year. By the third year the interest rate returns to the final rate for the remaining years.

The 3-2-1 buydown is another variation on the 2-1 buydown mortgage and works in the same way but the reduction lasts for a longer period of time. Buydown mortgages can reduce the amount paid by the borrower on a monthly basis but the payments will increase when the period of reduction ends. Contact your 1st Carolina Mortgage, Inc home loan advisor to discuss your buydown options in SC further.

APR, Annual Percentage Rate ARM, Adjustable Rate Mortgages Interest Rate Buydowns Fixed Rate Mortgages