{"id":3355,"date":"2023-01-24T12:13:42","date_gmt":"2023-01-24T17:13:42","guid":{"rendered":"https:\/\/www.khov.com\/blog\/?p=3355"},"modified":"2024-03-12T19:02:50","modified_gmt":"2024-03-12T19:02:50","slug":"buydown-mortgage-buying-down-your-interest-rate","status":"publish","type":"post","link":"https:\/\/blog.khov.com\/blog\/buydown-mortgage-buying-down-your-interest-rate\/","title":{"rendered":"Buydown Mortgage: Buying Down Your Interest Rate"},"content":{"rendered":"\n<h2 class=\"wp-block-heading\"><strong>Thinking of Buying Down the Interest Rate on your Mortgage?<\/strong><\/h2>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>What is a Buydown on a Mortgage?<\/strong><\/h3>\n\n\n\n<p>A Mortgage Buydown presents homebuyers, sellers, and builders with an opportunity to lower monthly mortgage payments by \u201cBuying Down the Interest Rate\u201d on a loan. <\/p>\n\n\n\n<p>This is accomplished by purchasing <a href=\"https:\/\/www.khov.com\/blog\/mortgage-points-what-are-points-on-a-mortgage\/\">Discount Mortgage Points<\/a> that are pre-paid at closing. The more Discount Points paid, the lower the monthly costs for the life of the loan.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>How Interest Rate Buydowns Work<\/strong><\/h2>\n\n\n\n<p>For traditional loan programs, buyers or sellers might consider Buying Down the Interest Rates on a 30-year fixed mortgage, for example, from 6.5% to 5.99%.<\/p>\n\n\n\n<p>Each mortgage point equals 1% of the total loan, so on a $300,000 loan, one point would cost $3,000. While points don\u2019t affect the principal balance, reducing a loan rate by even a small percentage may add up to significant savings over time. <\/p>\n\n\n\n<p>Plus, Buydown Mortgage costs are generally tax deductible.&nbsp;<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>Mortgage Buydown Options<\/strong><\/h2>\n\n\n\n<p>Those interested in scaling up to full loan payments more slowly often consider a \u201c3\/2\/1\u201d Buydown Mortgage, in which the Year 1 interest rate is lowered by 3%, in Year 2 &nbsp;by 2%, and in Year 3 by 1%. After that, the 30-year fixed rate takes over. <\/p>\n\n\n\n<p>There is a similar 2-year graduated option as well, called the \u201c2\/1.\u201d<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>Is a Mortgage Buydown the best solution for you?<\/strong><\/h2>\n\n\n\n<p>Especially in times of high interest rates, a Buydown may work perfectly! For more information please contact K. Hovnanian\u00ae American Mortgage, LLC\u2122 at <a href=\"https:\/\/www.khov.com\/contact-us\">https:\/\/www.khov.com\/contact-us<\/a>.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Thinking of ways to deal with rising interest rates? Buying down your mortgage might be just the ticket! Find out how a mortgage buydown could help you move into your new dream home. <\/p>\n","protected":false},"author":2,"featured_media":5277,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"ub_ctt_via":"","_lmt_disableupdate":"no","_lmt_disable":"","footnotes":""},"categories":[4],"tags":[279,88,23,301],"class_list":["post-3355","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-buying","tag-buydown-mortgage","tag-interest-rates","tag-mortgage","tag-mortgage-buydown"],"featured_image_src":"\/blog\/wp-content\/uploads\/2024\/03\/First-time-Home-Buyer-Mortgage-Options.jpg","author_info":{"display_name":"K. Hovnanian Homes","author_link":"https:\/\/blog.khov.com\/blog\/author\/khovblog1\/"},"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v25.7 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Buydown Mortgage: Buying Down Your Interest Rate<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/20.81.118.219\/blog\/buydown-mortgage-buying-down-your-interest-rate\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Buydown Mortgage: Buying Down Your Interest Rate\" \/>\n<meta property=\"og:description\" content=\"Thinking of ways to deal with rising interest rates? Buying down your mortgage might be just the ticket! Find out how a mortgage buydown could help you move into your new dream home.\" \/>\n<meta property=\"og:url\" content=\"https:\/\/20.81.118.219\/blog\/buydown-mortgage-buying-down-your-interest-rate\/\" \/>\n<meta property=\"og:site_name\" content=\"The K. Hovnanian\u00ae Homes Blog\" \/>\n<meta property=\"article:publisher\" content=\"https:\/\/www.facebook.com\/khovnanianhomes\/\" \/>\n<meta property=\"article:published_time\" content=\"2023-01-24T17:13:42+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2024-03-12T19:02:50+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/blog.khov.com\/blog\/wp-content\/uploads\/2024\/03\/First-time-Home-Buyer-Mortgage-Options.jpg\" \/>\n\t<meta property=\"og:image:width\" content=\"1600\" \/>\n\t<meta property=\"og:image:height\" content=\"1024\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/jpeg\" \/>\n<meta name=\"author\" content=\"K. 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