When Interest Rates Go Up, Consider a Buydown Mortgage

With the crazy swings in mortgage rates lately, a mortgage buydown might be the answer to an unexpected rate increase.

In many parts of the country, buyers today are asking for and getting their closing costs paid. This practice has opened the doors for many first-time home buyers and those priced out of the market because of its volatility. In today's environment of rising rates and slowing sales, more and more sellers are willing to pay for a buydown mortgage.

These mortgages have always been around, so they’re not a new financing instrument. Buydowns sort of fell out of favor in the 1990s, primarily because a permanent buydown was too expensive for sellers, so buyers were pushed to buydown the rate themselves. Today, buydowns make a lot more sense, though, especially when it’s not the buyer who is paying down the interest rate, don’t you agree? . . . read more about Mortgage Buydowns.

More Articles by Elizabeth Weintraub:

• Handling Adjustable Mortgage Loan Increases
  
• Understanding Option ARM loans
  
• FHA Loans are Back!

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