Everyone knows that interest rates have risen a lot lately. If you're really looking to buy a home, you shouldn't let this deter you because there is a way around this. The secret? A 2-1 Buy-Down. 

The 2-1 Interest Rate Buy-Down allows the seller to pay to lower your interest rate for the first two years of the loan. This will reduce your effective interest rate by 2 points in year one and 1 point in year two. 

The savings in your monthly payment in those first two years from the buy-down, will be much greater than what you’d get from a reduction in price by that same amount. Meaning there’s an opportunity to negotiate a concession from the seller that hurts them less and helps you more, in the near term. And unlike with an adjustable rate mortgage, you know exactly how and when your interest rate will change in the future.

Now, this isn’t free money. Decreasing your purchase price would decrease your loan amount, likely reducing the total interest paid over time. But this could deliver meaningful savings over the next two years. If rates come down, you may have a refinancing opportunity. If they go up, you don’t have the same exposure as you would with an ARM.

Curious if this could work for you? Reach out and we can talk it through or I can connect your with a lender for more information.