2 1 1 0 Buydown

Seller Concessions

Seller concessions are closing costs that the seller has agreed to pay. Sometimes, you can ask the seller to contribute to specific closing costs. Other times, sellers may simply pay a percentage of the total closing costs.

This can be a great way to save money on your purchase, and it's something you should consider if you're looking to get the best deal possible.

Seller concessions can be used to cover a wide variety of costs, including:

2/1 or 1/0 buydown rate programs
Enjoy reduced payments during the first two years in your new home with Veritas Funding's 2/1 Buydown program. This mortgage financing option lets you secure a lower interest rate for up to the first 24 months of the mortgage.

If you want a lower rate and payment, a buydown can help you purchase a home for initially lower terms during the first 12-24 months of your mortgage. This initially lower monthly mortgage payment allows you to redirect your cash flow during the temporary buydown period toward other priorities or to reduce bills and other debt.

Buydown Types Include:

2/1 – Rate lowered by 2% in the 12 months of mortgage payments and 1% for mortgage payments from months 13-24

1/0 – Rate lowered by 1% in the 12 months of mortgage payments only

The 2/1 and 1/0 buydown program can be used with FHA or Conventional as well as VA and USDA loan programs and is only available for new purchases, cash-out refinances and second homes. Real Estate agents, builders, borrowers (refinance only), and sellers are also allowed to contribute to the fund.

Buy down a point of interest
Mortgage interest rates are one of the most important factors to consider when purchasing a home. The interest rate will affect your monthly mortgage payment, as well as the total amount of interest you will pay over the life of the loan. Mortgage interest rates can vary greatly depending on market conditions, but they typically fall within a certain range. You may be able to "buy down" the interest rate by paying points at closing. One point is equal to 1% of the loan amount.

So, on a $200,000 loan, one point would cost $2,000. Paying points can lower your interest rate, which could save you money over the life of the loan. However, it's important to weigh the upfront cost of paying points against the potential savings to see if it makes sense for you.

Closing costs
Closing costs are the various fees and charges associated with closing on a home. These costs can include things like the loan origination fee, appraisal fee, title insurance, and more. Sellers may also offer closing cost concessions to buyers as an incentive to purchase their home. The exact amount of closing costs will vary depending on the price of the home, the type of mortgage being used, and other factors. However, closing costs typically range from 3-6% of the total loan amount. For example, on a $200,000 loan, closing costs could range from $6,000-$12,000.

If you're interested in learning more about seller concessions, be sure to ask your real estate agent or talk to a Veritas Funding Loan Officer today.