Buydown Program

Buydown Program

pexels-karolina-grabowska-5625119A buydown is a way for a homebuyer to get a lower interest rate by having the seller to pay discount points at closing. The total Buydown cost is the difference between the total payments made at the original monthly payment (Note Rate) and the total payment made at the rate-adjusted monthly payments. Buydown is a one-time fee paid upfront and it will be saved as a reserve in the buyer’s impound account until it is totally used by the buyer. So if the buyer sells or refinance the property in six months, then the remainder of the impound accounts will be credited to the buyer.

Is mortgage buydown worth it?

100% as it is contributed by the seller and you will be saving monthly payments.

How many years could you buydown the rate?

You could do 3-2-1 buydown, 2-1 buydown or just one year buydown.

Who pays for the buydown?

The Seller or the Real Estate Agent, it cannot be combined by both.

What is the buydown per year?

1% per year

Will the interest rate goes up?

Interest rate is fixed for the entire term of the loan, however you pay 1% less the buydown year term. So for example, on a 3 years buydown and the note rate is 5.75% then the first year your payment would be based on a 2.75%.

Follow National Pacific Lending On Social Media


Company NMLS: 240639
Licensed by DRE: 01264348

Contact Us

National Pacific Lending
9891 Irvine Center Drive Suite 150
Irvine, CA 92618

(949) 362-1400

SAT-SUN: By appointment only