What is a mortgage rate buy-down?
Ready for some real talk about getting a mortgage this winter?
As rates inch higher, more homeowners are buying down their interest rates. Curious about what that means and if it’s right for you? Here’s the rundown on mortgage rate buydowns:
- A mortgage buydown is a way to lower your interest rate by paying discount points at closing. Discount points are a one-time, upfront fee.
- Each point costs 1 percent of the mortgage. For example, one point on a $200,000 mortgage would cost $2,000.
- Each point lowers the rate by 0.25 percent. So, one point would lower a mortgage rate from 6 percent to 5.75 percent for the life of the loan.
If you've got some extra savings and can afford it, buying mortgage points may be a smart investment.
Have more questions about buying a home or taking out a mortgage this winter? DM me - I’m here to help however I can.
If you're thinking of buying, save this post for later, or share with a friend who’s beginning the buying process! Questions? Send me a message!
Keichel Lewter, Realtor ®
Call or text me 410-701-0802
eXp Realty LLC 888-860-7369