Written by 5:37 pm Buyers, Finance and Insurance

Ready to Buy a New Home, But Worried About Interest Rates?

Howard Hanna has the answer.SM

We all know that interest rates have been on the rise, but that doesn’t have to get in the way of you buying your dream home. With our Rate Reducer program through 1st Priority Mortgage, you can temporarily lock in a lower interest rate so you can lower your monthly payments for the first two years of homeownership.

This way, you can move now and start building equity for the future and potentially refinance at a later date when rates decrease.

What Is a Buydown? 

When you’re ready to buy, you can ask your Howard Hanna realtor to negotiate a buydown into your purchase agreement. If the seller or the builder of your property accepts the agreement, they will cover the cost difference between your standard payment and the adjusted bought-down rate.

Here’s how it breaks down*:

  • Year one: Your mortgage payment is 2% below your 30-year rate. For example, if your 30-year APR interest rate is 5.853% (5.934% APR) during the first year, your bought-down interest rate will effectively be 3.853%.
  • Year two: Your mortgage payment is 1% below your 30-year rate at 4.853%.
  • Year three and beyond: Your rate will return to the same format it would have been otherwise, 5.853%. PLUS, you may also have the opportunity to refinance, potentially at a lower interest rate.

What Are the Benefits?

With Rate Reducer, buyers can take advantage of a range of appealing benefits, including the ability to enjoy lower monthly payments for the first two years of homeownership.

At Howard Hanna, we’re committed to helping you find the home you’ve always wanted. We can guide you through every step in the real estate transaction, and we’ll answer all of your questions along the way.

If you’re interested in enrolling your home in our Rate Reducer program, contact a Howard Hanna agent near you. Our agents are ready to explain more about the program and provide you with all the information you need to make the best choice for you and your home.

1st Priority Mortgage Terms and conditions apply. Example based on $375,000 purchase price 7.356% APR,  $300,000 loan amount, 30 year fixed rate loan with 20% down payment. Year one interest is 5.25%, monthly payment is $1,656.61. Year two interest is 6.25% monthly payment is $1,847.15. Year three and beyond interest rate is 7.25% and monthly payment of $2,046.53. Monthly principal and interest assumes availability of buydown funds; consumer is responsible for full payment if funds are not available. Taxes and insurance premiums not included—actual payment obligation will be greater. APR is based on secondary market conditions and subject to change. Effective 7/31/2023. Contact 1st Priority Mortgage, Inc. for mortgage products and eligibility. 1st Priority Mortgage, Inc. is a Licensed Mortgage Banker, New York State Department of Financial Services, NMLS #29600. All lending products are subject to credit and property approval. Terms, conditions, and certain restrictions may apply on all programs. Interest rate and program terms are subject to change without notice. This is not a commitment to lend. Contact a 1st Priority Mortgage Consultant for full details. (888) 500-9733.

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Last modified: August 7, 2023
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