Mortgage buydowns: How do they work?

With the rising interest rates, affordable home ownership has become more challenging. (Image courtesy of Big Stock Photo)

If you’re looking to obtain a lower interest rate on your mortgage loan, then choosing a mortgage buydown is your best option. This will allow you to save money on the first few years of your loan or possibly even for the rest of your life.

Think of the mortgage buydown as a subsidy from the seller on behalf of the homebuyer. The seller provides funds to a mortgage-lending institution, which makes homeownership more affordable. There are two common structures: a 3-2-1 buydown for three years and a 2-1 buydown for two years.

For more information, contact Fidelity Direct Mortgage.

Marie Patasin, C2 Communications