Interest Rate Buy Down | Ukiah Real Estate

A big topic that is currently going on is interest rate buy-down. So, I'm going to get into what those are what those mean and how they could help you or hurt you.

Hi, my name is Kasie Gray, your homegirl, and broker associate here in Ukiah California and I love helping first-time sellers buy their dream homes. So, this is a perfect time to look into that move-up sale. There is a lot of potential for a move-up sale but some things that you'll want to know are about interest rate buy-downs.

So essentially what that is is you pay a chunk of money to buy down a percentage of your interest rate now. I am not a mortgage lender, and I am not licensed in mortgage lending but this is just information that you can get from the online Google bestie that is on everyone's computer. So if you have more questions, I would love to refer you to a mortgage lender but this is a brief understanding from a normal gal's brain.

So, buying down your interest rate is a one-time upfront fee. So it's a way to lower your interest rate by using some of that cash that you might have on hand each point costs one percent of the mortgage full. For example, for a three hundred thousand dollar loan, the point would be three thousand dollars, and each point lowers the interest rate by around a quarter of a percent. So one point would lower the interest rate from six percent to five point seven five percent forward the entire life of the loan.

So this isn't just for the first five years, this is for the entirety of your loan whether that's 30 years or 15 years. If you've got some extra savings you don't have a ton of work that needs to be done to the home when you get into it and you have the ability to buy down the interest rate, it could be a smart investment. You can talk to your mortgage lender to run different scenarios for you at different interest rates with different payments to see what will work best for you.

If you have any other questions about getting approved for selling your home about buying a dream home, it's never too late to give me a call!