Posted on: 13th Feb, 2007 02:51 pm
What, if any, kinds of fees are involved?
Sometimes lenders allow borrowers to buy down the interest rate on their mortgage. In a 2-1 buy down you as a borrower can be allowed to reduce the initial rate on your mortgage by 2% in the 1st year & by 1% next year. After that the rate will remain same for the rest of the term of your mortgage as was fixed at the beginning. You will be required to pay a fee in the form of discount points to buy down the rate. It’s one type of temporary buy down.
Hi Chris,
Welcome to Mortgagefit discussion board.
Let me give you an example to make it clearer for you.
Suppose the current market rate for a FRM is 7.5%, the buy down results in rate of 5.5% in the 1st year and 6.5% the 2nd year. After that it goes back to 7.5% for the rest of the term of the loan.
You can go through the following page to read the other details of a buy down mortgage: http://www.mortgagefit.com/buy-mortgage.html
Thanks
Blue
Welcome to Mortgagefit discussion board.
Let me give you an example to make it clearer for you.
Suppose the current market rate for a FRM is 7.5%, the buy down results in rate of 5.5% in the 1st year and 6.5% the 2nd year. After that it goes back to 7.5% for the rest of the term of the loan.
You can go through the following page to read the other details of a buy down mortgage: http://www.mortgagefit.com/buy-mortgage.html
Thanks
Blue