- Increase the appeal of your offer.
- Lower the initial interest on your loan—lowering initial monthly payments.
- Net the seller more overall profit.
A Temporary Buydown is also called a 2-1 Buydown Mortgage (though loan programs and terms may vary). It can be a great option for both new and experienced homebuyers who want to save money on their mortgage. A Temporary Buydown may be compatible with most loan types, including Conventional, VA, and FHA.
When you use a 2-1 Buydown, you’ll get a lower, more affordable interest rate for the first two years of your loan. This may make it possible for you to purchase your dream home sooner. In year three, your payments will be fixed for the remaining life of your loan, removing all uncertainty of future increasing payments.