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Week-End Review 11/18/22

Well, we have great news… We have officially opened our new office in Camden!!!! YAY!!! We are located at 102 Marsh Harbour Parkway, Suite 102, Kingsland, GA 31548. There was a lot of work to be done, and we’re finally done. Granted we need to put some pictures on the walls and things like that, but we’ve got furniture, computers, and all our other necessities taken care of. If you are in the area, please stop in. Robyn Baily one of our LO’s is working out of that office for sure. She’s from Camden and lives there. We will also be rotating other people out of that office as well.

Speaking of Robyn, she’s been doing a great job! She reached over a million in sales last month and is on the way to do the same for the month of November. If you see her, congratulate her.

Now down to the market.

We all know that we’ve been dealing with some challenges in the current housing market. Everything from supply chain issues to higher interest rates. Obviously, we don’t have much control over the supply chain problems especially given that we deal with the finance side of a real estate transaction. That being said, we do have some really cool new “buydown” products that are designed to help our clients.

A buydown is a mortgage financing technique with which the buyer attempts to obtain a lower interest rate for at least the first few years of the mortgage or possibly its entire life. A 2-1 buydown, for example, is a specific type of mortgage buydown that allows homebuyers to save on their interest rate for the first two years of the loan. Buydowns can also use a 3-2-1 structure as well.

KEY TAKEAWAYS

  • A buydown allows homebuyers to obtain a lower interest rate when taking out a mortgage loan.
  • Buydowns can save homeowners money on interest over the life of the loan.
  • A buydown can involve purchasing discount points against the mortgage loan, which may require payment of an up-front fee.
  • Whether it makes sense to choose a buydown when buying a home can depend on the interest rate for which you qualify and how long you plan to remain in the home.

Buydowns Explained

Buydowns are easy to understand if you think of them as a mortgage subsidy offered by the seller on behalf of the homebuyer. Typically, the seller contributes funds to an escrow account that subsidizes the loan during the first years, resulting in a lower monthly payment on the mortgage. This lower payment allows the homebuyer to qualify more easily for the mortgage. Builders or sellers may offer a buydown option to help increase the chances of selling the property, by making it more affordable.

The builder or seller of the property usually provides payments to the mortgage-lending institution, which, in turn, lowers the buyer’s monthly interest rate and, therefore, monthly payment. The home seller, however, usually will increase the purchase price of the home to compensate for the costs of the buydown agreement.

Hope this helps you all. Give us a call at Coastal Mortgage Solutions for any questions you may have.