What is a 3-2-1 Mortgage Interest Rate Buydown and is it Right for You? Check Out the Pros and Cons

When will interest rates come down again?  No one knows, but we are all waiting for this!!  But, what if you need to buy a home now?  Perhaps consider a 3-2-1 mortgage interest rate buydown.  A 3-2-1 buydown mortgage allows homebuyers to secure a lower interest rate for the first three years, with a reduction of 3% in the first year, 2% in the second, and 1% in the third. After this period, the original rate applies for the remainder of the loan. Typically funded by sellers or builders, this option can help buyers manage high mortgage rates. However, borrowers must be cautious about future payment increases and ensure they can afford the higher rates after the buydown period ends.  Check out the Pros and Cons laid out by our friends at Investopedia to see if this option makes sense for you.  If you'd like to speak to a lender who is expert on the topic, reach out to James Rogers at American Nationwide Mortgage.  If you'd like to discuss the current Florida real estate markets in either the greater Sarasota area or the greater Boca Raton area, give us a call at (941) 586-3229!