Learn about the 3-2-1 Mortgage Buydown, a flexible financing option that reduces your mortgage payments during the first three years of homeownership. Learn how this strategy lowers your interest rate by 3% in the first year, 2% in the second, and 1% in the third—helping you ease into your mortgage with financial confidence.
Introducing the 3-2-1 Mortgage Buydown—a smart and strategic way to make your dream of homeownership a reality.
So, what exactly is a 3-2-1 Mortgage Buydown? It’s a financing option designed to ease the burden of initial mortgage payments, providing flexibility and savings over time.
Let’s break it down. Let’s say you obtain a mortgage with a 7.5% interest rate. With a 3-2-1 buydown, in the first year of your mortgage, your interest rate is ‘bought down’ by 3 percentage points. This means lower monthly payments right from the start, giving you more financial breathing room as you settle into your new home.
In the second year, your interest rate is ‘bought down’ by 2 percentage points. While your payments increase slightly, they’re still lower than what they would have been without the buydown.
And in the third year, your interest rate is ‘bought down’ by 1 percentage point. By the end of the third year, you’re fully transitioned to your original interest rate, but with the benefit of having enjoyed lower payments during the initial years.
Whether you’re a first-time buyer or looking to save money upfront, the 3-2-1 Mortgage Buydown could be a great option to increase your purchasing power. Contact us today to learn more about how a 3-2-1 Mortgage Buydown can help you achieve your homeownership goals.
Disclaimer
EXAMPLE: Sale price: $400,000 | Down payment: $80,000 | Loan amount: $320,000 | 30-year fixed rate: 7.50% | APR 7.724%| P&I payment $2,796.86 | 360 monthly payments | Payment stated does not include taxes and insurance. Actual payment obligations may be greater and may vary.
Results are hypothetical and may not be accurate. This is not a commitment to lend or extend credit. The sample rates provided are for illustration purposes only and are not intended to provide mortgage or other financial advice specific to the circumstances of any individual and should not be relied upon in that regard. The payment example does not include assessments. Actual payment obligations may be greater and may vary. All loans are subject to credit approval. Rates and terms effective as of 12/12/2023 and subject to change. APR may vary. Not all borrowers qualify for all programs, must meet underwriting guidelines and are subject to credit review and approval. For mortgage loans other than fixed loans, it is possible that the borrower’s payment may increase substantially after consummation. The disclosed fees are estimates. Actual closing costs and the portion paid by Seller may vary. The information contained is subject to change without notice. Consult a financial professional for full details.
