A rate buydown can help you qualify for your dream home—see how it works.
What does it mean to buy down an interest rate? Essentially, this involves paying your mortgage lender a fee to reduce your interest rate. For example, instead of having an interest rate of 6.5%, you can get a 6.25% or 6% rate. On the surface level, it may not seem significant, but it can be the difference between qualifying for a house or not.
Pricing has increased in the last few years, and people’s debt-to-income ratios have become so tight that there hasn’t been much wiggle room if you want to buy a more expensive home. However, by buying down your interest rate, you can reduce your mortgage and qualify for the house that you want.
Typically, the fees for the rate buydown become a part of the buyer’s closing costs, but now that the market has shifted, you can negotiate with your seller and ask that they assist you with the payment.
If you want to find out whether you have to buy down your rate, you can get pre-qualified with a lender or call or email so I can help you with any of your real estate needs. Don’t hesitate to reach out to me. I’d love to connect with you!