Rhode Island home buyers, worried about high interest rates? The 3-2-1 buy-down loan program offers relief, lowering fixed-rate mortgages initially. Starting at around five or four percent, it eases the burden of rising monthly payments.
How does it work? The program pre-pays interest for the first three years through lender points, despite a cost. This frees up monthly funds, making payments more manageable.
Visualizing the Impact: Imagine a buyer with a 7.25 percent interest rate for a $500,000 house. With the 3-2-1 program, enjoy a lower monthly payment for the first three years, reverting to the fixed rate afterward.
Managing Monthly Payments: Empowering buyers, the program can secure a lower monthly payment, positively impacting budgets.
Who Pays the Points? In this program, the buyer can't pay the points. It's negotiated as a seller-paid credit, crafted with a real estate agent.
What Happens if I Sell or Refinance? If a buyer sells or refinances within the first three years, they're reimbursed for prepaid interest at closing.
Smart Seller Strategy: Instead of immediate price reductions, offer a credit to cover prepaid points, attracting buyers and potentially leading to quicker sales.
In conclusion, the 3-2-1 buy-down program is a valuable tool for managing cash flow and lowering monthly payments. Consider your circumstances, work with a lender, and contact me for a copy of my Buy Down options Spreadsheet to see these numbers in action! Call or Text!
