How To Get A Lower Rate In Today's Market
Recently, on our Real Estate 101 show our loan officer, Shannon Wheeler, discussed options to lower your monthly mortgage payment. As most people know from the media and other sources, mortgage rates have more than doubled this year...going from 3% to 7%. What this does is, it creates most people to stall on their decisions to purchase a home which has caused the housing market to slow down some, which in turn effects a buyer's purchasing power. Regardless of the current market conditions, people are still moving and have needs to buy a home. There are solutions, such as a 2/1 buydown. This means if you can get the seller to contribute 2% towards your loan amount, this will reduce your interest rate 2% the first year and 1% the following year. For example: Let's imagine today's interest rate is 7% and you have a loan amount of $350,000. If the seller of the home you would like to purchase pays 2% (7,000) towards your loan, this will reduce your interest rate from 7% to 5% the first year and 6% the second year. After the second year, your rate would then adjust to current rate.
The reason why I think that this would work for most people right now is I believe rates are going to be coming down following the recession as they typically do. So, this is something that anyone that is currently interested in purchasing a home can take advantage of with the option to refinance at anytime.
If you are interested in more information about the 2/1 buydown, give us a call! 615-970-2566