Are you fed up with all the doom and gloom being talked about in the mortgage market?
Well, don't panic !!! Contrary to what you may have been told, 100% loans are still available for qualified buyers, and mortgage rates remain at a historical low. There are some great plans out there, like the Temporary Buydown Plan.
Here's an example of how a 3-2-1 Buydown Plan works:
- The Note interest rate is 8%
- The Note rate is bought down 3% in the 1st.year, 2% in the 2nd.year, and 1% in the 3rd.year.
The effective payment rate is as follows:
- Year 1 = 5%
- Year 2 = 6%
- Year 3 = 7%
- Year 4 = 8% (now equal to the Note interest rate)
| Borrower's Payment Schedule | |||||||||
| Based on a loan of $100,000 with a Note rate of 8% for 30 Years | |||||||||
| Item | Year 1 | Year 2 | Year 3 | Year 4 | |||||
| Note rate |
8% |
8% |
8% |
8% | |||||
| Principal & Interest Payment @ 8% |
$733.76 |
$733.76 |
$733.76 |
$733.76 | |||||
| Bought Down Rate |
5% |
6% |
7% |
8% | |||||
| Principal & Interest Payment @ Bought Down Rate |
$536.82 |
$599.55 |
$655.30 |
$733.76 | |||||
| % Interest Rate is Bought Down |
3% |
2% |
1% |
0% | |||||
| Principal & Interest @ 8% |
$733.76 |
$733.76 |
$733.76 |
$0.00 | |||||
| Principal & Interest @ Bought Down Rate |
$536.82 |
$599.55 |
$665.30 |
$0.00 | |||||
| Monthly Saving |
|
$196.94 |
$134.21 |
$68.46 |
$0.00 | ||||
Total cost of Buy Down: $4,795.32 (can be paid by buyer, seller or builder).
For more information on the Buydown Plan or other loan programs, please contact: Leslie Gonsalez, US Capital Home Loans