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Rates and 1/0 Buy Down

Happy Thursday – I hope you are doing well. For this week’s video I want to discuss interest rates and options to help until rates come down. If you have been watching the market, rates went up last week due to the jobs report being higher than forecasted, pushing rates to the high 6’s to low 7’s for most people. We did have some good news this week. The CPI report came in lower than forecasted so rates did tick back down yesterday. However, I think we will continue to see higher rates this year until we see inflation come down every month.

Based on this, I want to discuss a loan option that will help your interest rates while we are waiting for rates to come down. I have sent several videos about a 2/1 rate buy down, but the issue we are having with that program is getting sellers to pay enough closing costs to cover this since this program must be paid by the seller. It typically costs the seller 2.25% of the loan amount, so if you have a loan amount of $400k you must negotiate with the seller to pay $9k in closing costs. Due to low inventory this is often hard to do.

So, I am excited to share our 1/0 buydown. The seller still must pay this, but it only costs roughly .75% of the loan amount. In the scenario of the $400k mortgage amount, it would only cost the seller $3k. This should be easier to negotiate and allow you to have a 1% lower rate the first 12 months of your mortgage. Everyone expects rates to come down next year once we see inflation come down, so this will allow you to get into your home at a better rate and hopefully you will be able to refinance into a lower fixed rate before the 12 months is over.

Please email us if you would like to see how this program would work for you.

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Stewart Sadler - Mortgage Rates Back Over 7% as Markets Digest Economic Data (

Stewart Sadler

Managing Partner

Cornerstone Mortgage Group

Georgia Residential Mortgage Licensee: 21412 • Company NMLS: 147913 • Individual NMLS: 147938

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