Seller is Giving Concessions! Use it to Buy Down The Rate!

What Exactly is a Mortgage Buy-Down?

Are you considering buying a home but worried about your initial monthly mortgage payments? One strategy you might consider is a mortgage buydown. This approach can help you reduce your interest rate for a specific period, making your payments more manageable. 
Here's how it works: When you get a mortgage, the lender charges you an interest rate that determines how much interest you'll pay on the loan. A mortgage buydown involves an agreement between the buyer, seller, or a third party that the interest rate will be lower than the regular rate for an initial period, usually a few years. To compensate for the lower interest rate, someone, often the seller, makes an additional payment to the lender, covering the interest that the borrower isn't paying during the buydown period. After the initial period, the interest rate gradually increases, causing the monthly payments to increase.
While the payments will eventually increase, a mortgage buydown can be helpful for homeowners, making buying a house more affordable at the start. Over time, a mortgage buydown can even help you save money compared to a regular mortgage, particularly if you plan to sell the house before the higher interest rate kicks in. 
It's important to note that the specific terms and arrangements of a mortgage buydown can vary. Thus, it's crucial to read and understand the details of any buydown agreement before committing to it.