Mortgage rates have been steadily improving over the past months. You are looking to buy your new home, but mortgage rates are not low enough to get you the mortgage payment with which you are comfortable. There is a solution that will provide the lower payment you are looking for. A temporary mortgage buydown is a financing tool that allows borrowers to reduce their interest rate for the first one to three years of the loan, making the initial monthly payments more affordable. The most common structures are 2-1 or 3-2-1 buydowns, where the rate is lowered by a set percentage in the early years before returning to the full note rate for the remainder of the mortgage. The cost of the buydown—often paid by the seller, builder, or lender—is placed in an escrow account and used to subsidize the borrower’s payments during the buydown period. This strategy can help buyers ease into homeownership or offset affordability challenges in a high-rate environment. Additional benefit FDM provides is a Free Refinance. You can enjoy the benefits of the lower payment with a temporary buydown, and when mortgage rates improve, FDM will refinance your mortgage to a lower rate. Even better! All remaining funds in the buydown payment escrow account are applied to your mortgage reducing your mortgage balance.
