What is the new Product?  - "2-1 Buydown"

 

What is this exactly?  - Sellers may offer a "Credit" for Buyers as an incentive to buy their property over others they may be considering.  The Credit is equal to the interest charges for 2% of the rate in Year 1 of the loan and 1% of the Rate in year 2 ... the borrower's loan reverts to the NOTE Rate in Year 3.  

 

Here's an Example - NOTE Rate might be 6.75%, the "2-1 Buydown" allows for a 4.75% in Year one of the loan, a 5.75% in year 2 and the full 6.75% starting in year 3

 

Who gets the benefit?  - Everyone!  A seller in the current market may be entertaining a price reduction or possibly in addition to a reduction may be looking for an incentive to attract a buyer.  In addition or instead, a "2-1 Buydown" may provide a strong incentive to get this home sold!  

 

Buyers Enjoy a reduction of their NOTE Rate by 2% in Year 1 and 1% in Year 2 (Lower House Payments!) After 2 years, it may be attractive to refinance the loan to keep a lower rate!  A 2% Reduction on a $300,000 loan amount is approximately $6,000* in year 1 and almost $3,000 in year 2.   

*Precise calculations will be provided for each actual loan scenario. 

 

How do I present the proposal in an offer? - In Special Stipulations - "Seller to provide a credit in the amount of $X,XXX for the Buyer to obtain a 2-1 Buydown from Lender"

 

How do I determine the exact amount for my offer?  - Contact Dennis, Seth or Corey to provide the precise amount for your specific client and offer. The amount is equivalent to the interest cost for 2% in year 1 and 1% in year 2 of the loan amount. 

 

NOTES: 

1. Sellers may offer the credit to fund the interest rate buy-down.  The amount offered when combined with all other Seller Concessions cannot exceed maximum seller concessions depending on loan type.  Contact me for additional details.
2. Loan Types allowed for 2-1 Buydown - Conventional, FHA and VA
3. Buyers must qualify on NOTE Rate

 

Peoples Home Equity - DJKTeam is always working to find ways to add value and expand your offerings to Buyers and Sellers!  Contact me at the number below for more information!  Buyers may submit an application by phone or online at the Apply Now link below! 

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Dennis Knisley Producing Branch Manager | Retail |  NMLS 923545 P: (865) 934‑5454 |   F: (865) 316‑6958 peopleshomeequity.com Apply Now

Cardinal Financial Company, Limited Partnership DBA Peoples Home Equity | NMLS 66247 150 North Seven Oaks Drive, Knoxville, TN 37922

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