Buy-Down Loans

A temporary buy-down is the type of loan with an initially discounted interest rate which gradually increases to an agreed-upon fixed-rate usually within one to three years. An initially discounted rate allows you to qualify for more house with the same income and gives you the advantage of lower initial monthly payments for the first years of the loan when extra money may be needed for furnishings or home improvements. To reduce your monthly payments during the first few years of a mortgage you make an initial lump sum payment to the lender. If you do not have the cash to pay for the buy-down, the lender can pay this fee if you agree on a little higher interest rate.

For a buy-down loan program, the interest rate and payment remain unchanged for a fixed period, at the end of which, the interest rate and payment both increase. The interest rate and payment may increase once, twice, or even three times, depending on whether the buy-down is a 1/1, 2/1, or 3/1. However, the percentage of increase, as well as number of increases is predetermined. Once all of the increases have occurred, the new rate and payment remain fixed for the term of the loan. Borrowers having troubles getting fixed-rate loan and seeking affordable payment are recommended to consider buy-down loan program. Call us today, 559-840-3333, to find out if a buy-down is right for you.