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Temporary Buydowns



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What is a Temporary Buydown?

temporary buydown

A Temporary Rate Buydown, also known as a rate reduction or buydown rate , is a type of mortgage financing in which the interest rate is temporarily reduced for a specified period of time. The purpose of a rate buydown is to lower the monthly mortgage payment and make homeownership more affordable for borrowers who might otherwise not qualify for a loan. The lower interest rate is usually achieved by making a lump sum payment at the beginning of the loan term, which is used to subsidize the interest rate for a specified period of time. After this period, the interest rate will usually increase to the specified rate. This type of financing can be beneficial for borrowers who expect their income to increase over time, or who plan to refinance the loan at a later date.

Temporary Buydown Pros and Cons

A Temporary Buydown can offer several advantages and disadvantages for borrowers.

Pros of a Temporary Buydown:

  • Lower initial monthly payments: The temporary reduction in the interest rate results in lower monthly mortgage payments, making homeownership more affordable in the short-term.
  • Improved loan affordability: The reduced monthly mortgage payment can make it easier for borrowers to qualify for a loan, as some lenders will consider the lower payment when determining their ability to repay the loan.
  • Flexibility: A Temporary Buydown can provide borrowers with greater flexibility, as they can choose to refinance the loan or sell the property once the interest rate returns to the market rate.
temporary buydown mortgage

Cons of a Temporary Buydown:

  • Higher long-term costs: Although the monthly mortgage payment is lower during the temporary buydown period, the total cost of the loan will be higher due to the interest that accrues over time.
  • Upfront cost: The upfront cost of the buydown, which is typically a lump sum payment at the beginning of the loan term, can be substantial and may not be feasible for all borrowers.

Boris Cherner Mortgage Lender

Purchasing or refinancing your home is a complex undertaking that involves a number of participants and variables. I have been in the mortgage industry since 1997 and I understand the anxiety that comes with making the most expensive investment of a lifetime. My objective is to be your advisor, to educate you and to make the mortgage loan transaction as transparent and as stress-free as possible. I enjoy establishing personal connections and work mostly by referral. I thoroughly explain the process and available options, and guide my clients to make choices that best fit their needs and financial goals. Once the underwriting begins I communicate regularly and keep my clients apprised of the loan status from the beginning through the end. My relationship with clients does not end at the closing table. You are my client for life and I am always available to answer your questions and provide you with guidance.

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Buydown Options

There are several types of commonly offered Buydown loans:

  • 1-0 Buydown: A 1-0 Buydown is a type of Buydown where the interest rate is reduced by 1 percentage point for the first year, and then returns to the market rate for the remaining term of the loan.
  • 2-1 Buydown: A 2-1 Buydown is a type of Buydown where the interest rate is reduced by 2 percentage points for the first year, 1 percentage point for the second year, and then returns to the market rate for the remaining term of the loan.
  • 3-2-1 Buydown: A 3-2-1 Buydown is a type of Buydown where the interest rate is reduced by 3 percentage points for the first year, 2 percentage points for the second year, 1 percentage point for the third year, and then returns to the market rate for the remaining term of the loan.

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Buydown vs Buying points

A Buydown is a type of mortgage financing where the interest rate is temporarily reduced for a specified period of time, where as buying points is a way to pay upfront to permanently reduce your buying down interest rate. Both Buydowns and buying points can be a good option for borrowers who want to lower their interest rate, but it is important to carefully consider the costs and benefits of each option.

Temporary Buydowns Reviews

15:50 08 Sep 23
Boris was great to work with and always available.
Chris NChris N
17:27 30 Aug 23
Boris is my go-to guy when I need to get a loan. He was highly recommended in one of the professional forums.When the rates went down and his organization's policy did not allow the rate adjustment, he put my best interest first and let me know that I could look at other options outside. That's when I knew that he would do what was best for his customers.In my recent complex loan, Boris was a problem solver and guided me through a successful closing. He is very knowledgeable and quick to respond. I have recommended him to all my friends and contacts.
Rubén Meana PañedaRubén Meana Pañeda
11:04 05 Jul 23
Boris was recommended to us by some neighbors. We refinance our house mortgage with him and the experience was great. He help us on all the steps along the way and he is always eager to give us good advice. We recommend him and we will keep using his services in the future.
Julie GuffeyJulie Guffey
23:37 17 Apr 23
Recommended by a close friend of mine, I reached out to Boris for assistance in purchasing a home. I was impressed from the first time we spoke. His knowledge and professionalism exceeds any expectations I had. Boris was quick to respond, answer any questions, and be there whenever I needed him throughout the entire process. He did everything for me possible which made the process simple for me. I would recommend Boris to anyone! He is reliable, trustworthy and exceptional in his field!
Jay StrongJay Strong
15:11 27 Mar 23
Boris helped me buy two homes and refinance one. He is both professional and competent. Most important of all, he is an honest man. I highly recommend using him!
prathap prabakarprathap prabakar
18:52 08 Mar 23
Davy ChienDavy Chien
16:50 04 Mar 23
Boris is very professional and get our loan refinanced done on time and easy
Laxman PaladuguLaxman Paladugu
18:56 01 Mar 23
Boris is one of most experienced and knowledgeful mortgage professional. In my refinancing process he explained each and every step very clearly and supported me in complete process with 100% transparency. I would work with him again and recommend to others!
David KleinDavid Klein
17:29 01 Mar 23
Boris was recommended to me a couple years ago by my daughter. He was exceptionally easy to work with and kept us informed every step of the way. When interest rates went down .5 he recommended a streamline refi. Which was even easier. I strongly recommend Boris if you are looking for a loan, VA or otherwise.
PJ HamidiPJ Hamidi
22:10 11 Dec 22
I've had excellent experiences with Boris, both on the refinance side and the new home mortgage side. He has always been very responsive, patient, clearly communicative, informative, and able to provide the most competitive rates. I'd highly recommend working with him.
Adrian PirvuAdrian Pirvu
16:57 11 Dec 22
Boris is an absolutely exceptional Mortgage Banker! He has helped me through two mortgage refinances and my father-in-law through one. Because I had such a great experience with him through my first refinance, I specifically sought him out when I was looking for my second and when my father-in-law was looking to complete his. Boris goes above and beyond for his clients and he always ensures that their best interests are the top priority.You will not find a better Mortgage Banker than Boris!
Mukul MehtaMukul Mehta
03:36 09 Dec 22
Boris is one of the most seasoned and experienced mortgage professional I have ever worked with. He patiently explained to me the mortgage refinance process, answered every question I had in detail and never pressured me to make a decision. He is equally great with paper work and ensuring the mortgage process completes on time without any issues. I will highly recommend Boris Cherner whether you are a first time home buyer or refinancing your property.
Gene KGene K
21:16 08 Dec 22
Boris was a wonderful person to work with during my first home-buying experience. He got me the best rates while also being incredibly patient and supportive, educating me and guiding me every step of the way. He let me know exactly what to expect and there were no surprises at any point during the purchase and lending process. He made sure the process was smooth and painless, and was constantly in touch from start to end so things could move along. I highly recommend Boris!
Clement JosephClement Joseph
19:46 08 Dec 22
I have refinanced my home loan 2 times with the help of Boris. He is such a patient person who is never tired of answering your queries.He also knows the stuff he's doing.I had recommended Boris to atleast 15 people in my community and everyone got the best support
Anya ChugunovaAnya Chugunova
19:37 08 Dec 22
I worked with Boris and his team on mortgage refinance of my home. The level of care, attention to detail, and professionalism demonstrated by Boris far surpassed my expectations. I really appreciated his knowledge, honesty and transparency throughout the mortgage refi process. Boris stays on top of every detail and is there for you every step of the way to answer any questions and address any concerns. I highly recommend Mr. Cherner and his team for all your mortgage needs!! A++++++
Abdul KhanAbdul Khan
19:09 08 Dec 22
I have had the pleasure of working with Mr. Cherner for the home mortgage needs, and the satisfying experience leading to recommend my two other friends - who also had similar thoughts and an enjoyable experience. What stood out to me was his advise on getting the best rates, but also hand-holding at every step on the documentation needs (which becomes overwhelming). If you are in the market looking for for experience and good value, reach out to Boris. I hope you will not be disappointed.
sangrae josangrae jo
15:17 30 May 22
I was lucky enough to meet Mr. Boris in my real estate investment journey during the last 5 years. I worked with him for my 3rd primary residence refinance loan and 4th primary residence loan. I had excellent outcomes from both. I am very happy with that and definitely, I really want to work with him for my future homes for sure.As a customer, I always think communication is the top priority. Whenever I had some questions and needed some advice on my loan options, he was always there and answered quickly within an hour during business hours. Last time, I had some emergency matter during weekends with my loan and he definitely spent his off-duty time for helping me out. I am so sorry about that sincerely.With that being said, he is a very professional and subject matter expert. He always had many options and guided me with the best option in my situation. Also, his loan rate is very competitive to other loan companies. It tremendously supported my real estate investment journey.

Lower Your Monthly Mortgage Payments Today

temporary rate buydown

Whether a Buydown mortgage loan is a good option for you depends on your personal situation. Before choosing this type of mortgage loan financing, it is important for borrowers to carefully consider their finances, long-term goals, potential costs, and benefits and disadvantages of a Temporary Buydown mortgage. Working with a trusted mortgage lender who can help you compare these programs will make the decision process much easier. Please reach out to me for further guidance on Temporary Buydowns and current interest rates at 312-296-4175 or email me at Additionally, I offer a variety of mortgage options to suit your needs, including conventional loans, Jumbo loans, HELOCs, USDA loans, VA loans, and more. Together, we can explore and select the perfect mortgage solution tailored to your financial situation and goals. I lend in all 50 states and I am never too busy for your referrals!!

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FAQ about Temporary Buydowns

How do Temporary Buydowns work?

A Temporary Rate Buydown is a mortgage loan in which the interest rate is temporarily reduced for a specified period of time. The purpose of a rate buydown is to lower the monthly mortgage payment for a specified period of time and make homeownership more affordable for borrowers who might otherwise not qualify for a loan.

What is the difference between a permanent and Temporary Buydown?

A Temporary Buydown offers borrowers an option to reduce their interest rate and monthly payment for a certain number of years. Buying interest rate discount points upfront will reduce the interest rate and monthly payment for the entire loan term. Another difference is that discount points are not refundable, whereas buydown funds can be applied to the principal balance in case of a refinance or property sale.

How long can the buydown arrangement last?

Most commonly offered rate buydowns range from 1 to 3 years, after which the monthly payments resume at the original market interest rate for the remaining term of the loan.

How much will a Temporary Buydown reduce my payment?

Depending on the type of the buydown you chose, your interest rate might be lowered by 1% to 3% for the initial period. The dollar amount of monthly payment reduction depends on the interest rate and your loan size.

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