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Answers (10)
- Barbara Q.
- Contributions:49
Honestly...I only answered the question. I have no idea who wwnancy2002 is or what her motivation was.
The majority of the business we see are FTHB's...FHA loan limits... where sellers are offering to pay discount points at closing to fund Permanent Interest Rate Buydowns or 2-1 Temporary Buydowns. TBDs works well for Buyers who anticipate an increase in earnings or would like to pay off student loans, credit card debt, buy furniture...
It offers potential Buyers options.
No gimmicks... just creative marketing in a challenging market.
The majority of the business we see are FTHB's...FHA loan limits... where sellers are offering to pay discount points at closing to fund Permanent Interest Rate Buydowns or 2-1 Temporary Buydowns. TBDs works well for Buyers who anticipate an increase in earnings or would like to pay off student loans, credit card debt, buy furniture...
It offers potential Buyers options.
No gimmicks... just creative marketing in a challenging market.
- Pasadenan
- Contributions:21466
Obviously the original post was an alias to create an advertisment for a gimmic marketing firm.
I can't imagine why anyone would want to buy a house with such a gimmic. If you can't afford the full payment now, why would you expect to be able to make the full payment in 3 years? Who is guaranteed those kinds of raises in the present ecconomy? This is worse than "option payment" loans. (At least with "option payment" loans, it was understood that some self-empoyment business fluxuate substantually when the money comes in, and the business people would make big payments when the money was there, and would reduce the payments when they needed cashflow for employees and running the business.)
And worse, the selling is not getting that extra money spend for the "temporary buy down", so the buyer is "financing" that buy down at the full interest rate... (5.5% in the example), and just putting that additional loan amount into an escrow account to make the payments on the additional money borrowed! Sure, it may make sence if you can get more than 10% interest on the money that you defer paying, but otherwise, you are just losing that 5.5% for no gain. It is just a loss!
Why not just reduce the amount of the offer by the amount the seller would have to put into escrow for the "buydown"? You come out ahead, the seller receives the same amount, and the property taxes would probably be lower.
I can't imagine why anyone would want to buy a house with such a gimmic. If you can't afford the full payment now, why would you expect to be able to make the full payment in 3 years? Who is guaranteed those kinds of raises in the present ecconomy? This is worse than "option payment" loans. (At least with "option payment" loans, it was understood that some self-empoyment business fluxuate substantually when the money comes in, and the business people would make big payments when the money was there, and would reduce the payments when they needed cashflow for employees and running the business.)
And worse, the selling is not getting that extra money spend for the "temporary buy down", so the buyer is "financing" that buy down at the full interest rate... (5.5% in the example), and just putting that additional loan amount into an escrow account to make the payments on the additional money borrowed! Sure, it may make sence if you can get more than 10% interest on the money that you defer paying, but otherwise, you are just losing that 5.5% for no gain. It is just a loss!
Why not just reduce the amount of the offer by the amount the seller would have to put into escrow for the "buydown"? You come out ahead, the seller receives the same amount, and the property taxes would probably be lower.
- Barbara Q.
- Contributions:49
Dollar for Dollar Temporary Buydown: $40,567.43
Example: $1,370,000 Purchase Price
Down Payment: $411,000 (30%)
Loan Amount: $959,000
2.5% 3.5% 4.5% 5.5%
You can play with the numbers..
Temporary Buydown Calculator:
http://www.321advantage.com/sellers-calculate-your-rate
Example: $1,370,000 Purchase Price
Down Payment: $411,000 (30%)
Loan Amount: $959,000
2.5% 3.5% 4.5% 5.5%
You can play with the numbers..
Temporary Buydown Calculator:
http://www.321advantage.com/sellers-calculate-your-rate
- Save Financial Group
- Contributions:53
try looking at usbank rates.. they have the best jumbo rates.. if you need help don't hesitate to contact me...
- Steve Heaney, "SteveHeaney"
- Contributions:148
I must agree with the recent and honest posts. The 3/2/1 and other buy down programs are indicative of conforming purchase loan products prmarily aimed at helping new buyers get in to homes. This is a much better option for new buyers that the evil option ARM's that were pushed for so very long by many and contributed to the mess we are in today.
I am not aware of any jumbo products or portfolio lenders (the few left standing) that offer scenarios like that. I would be wary of quotes in that range that do
I am not aware of any jumbo products or portfolio lenders (the few left standing) that offer scenarios like that. I would be wary of quotes in that range that do
- Clay Branch, "Georgia Loans"
- Contributions:7839
Wow, have never seen a super jumbo lender offer a 3-2-1. Please disclose this lender's name. How many points have you been quoted just for the buydown, 5? Has anyone told you you are trying to buy out of your price range, maybe by $250K?
- Mahesh Mike Patel, "Mike Patel"
- Contributions:58
As other have commented, I would talk to your current if you are working with one, or just any other lender, they will be glad to answer your questions. This is too general a questions to give you any specific answers.
- Rudi Hofmann, "LUXURY HOME LOANS CA"
- Contributions:7435
This product is normally used to help conforming loan amount buyers qualify for a loan. I do business with several non-agency jumbo portfolio lenders. None of which offer this product.
I'm curious why you are making this inquiry. Is it for the purpose of offerring an incentive to sell your home? Or, is this for your own use? There are other alternatives. ..... Happy funding, Rudi Hofmann
I'm curious why you are making this inquiry. Is it for the purpose of offerring an incentive to sell your home? Or, is this for your own use? There are other alternatives. ..... Happy funding, Rudi Hofmann
- Tony Veltri, "Tony Veltri"
- Contributions:146
You need to ask the person actually quoting your loan. Buy-down costs are product specific and if anyone tells you a price, it's speculation. You will need to get this answer directly from the same lender/broker you are obtaining your loan from. If you ask someone else, they willl only tell you what their cost is for the same/similar product they sell and it may be quite different from what you will receive from your Lender.
- Linda Rozales, "Lrozales"
- Contributions:245
What you will need to do is sit down with a very good loan consultant that can help you find the best loan program that will fit your financial needs. No 2 loans are the same since they are based on several criteria (i.e. FICO scores, down payment, job stability...). I can refer you to a loan consultant with Bank of America and his name is Kevin Fisher and is very proactive.
What is the cost to buy down a fixed rate as a 3/2/1 buy down on a $960,000. loan?
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