While rates have come down since we first made this video they are still higher than most prospective buyers would like them to be. How do you instantly lower your monthly mortgage payments when interest rates are high?
There is an amazing lender program that is out right now called the 2/1 buydown. I highly encourage prospective home buyers to take advantage of this! Here’s how it works:
The seller is going to pay, as a part of the loan settlement, for your interest rate to be lower for the first two years you own the home. The first year you’re going to lower your interest rate by 2%. Year two you’re going to lower your interest rate by 1%. In your third year it goes back to your original rate.
You might think, “That isn’t going to help me for very long.” But the chances of interest rates being this high two or three years from now is pretty slim. So, if interest rates go down in the next two to three years, you can refinance and never end up actually paying the rate you are being quoted at now.
Some of you might ask your lender, “Why don’t I just do a permanent buydown?” Permanent buydowns can only reduce your payment by 0.5%. Personally, I would take the gamble that in the course of the next two to three years the interest rates will be lower and plan to refinance.
If you have more real estate questions or want more information, feel free to drop us a note or comment!
PNW Real Estate Blog 
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