26 Oct Lenders are getting creative with rates!
Lots of good ideas for these trusted mortgage brokers
- Initial lower loan payments.
- Fixed rate for 3-7 years. Lower than current rates. averaging 2-3% points lower
- Rate can adjust but only a certain amount based on the index rate.
- Mortgage payments can go up or down during the adjustment period.
- Ideal for buyers who are looking to own a home for short term.
- Saves you thousand in interest.
2-1 rate buy-down
Here is an action plan from my friends at Excel Financial.
Basically, from payments 1-12 months you are starting off at a rate 2% below current market rate. Then, at payments 13-24 months you will be at 1% below where you locked in before going to the full rate in months 24-360. This is not buying the rate down; the sellers are pre-paying the first 2 yrs of payments with seller concessions into an escrow account. The beauty is, if you refinance or sell before your 2 yrs is up, you don’t lose that money. It goes towards the payoff of that loan making the payoff less. Our thought in the industry is that we are going to see rates drop in the next 2 yrs so you will see another refi boom.
Colorado Mortgage Broker | Team Paz @ Excel Mortgage Brokers (comortgageman.com)
Max Seller contributions
- Interest Rates – Right now borrowers need to pay to lock in a rate. There are no “par” rates available so we’re really pushing for seller concessions to help buy down the rate. Also, because of fees and tolerance guidelines borrowers are only allowed to buy down the rate by 3%. However, if the seller is offering 4% in seller concessions that entire 4% can be used to buy down the rate. Seller concessions towards closing costs do NOT count towards the fees and tolerance rules we need to follow
- .Joe Whitlock link