Purchase
2-1 Buydown Loan
A temporarily lower rate for the first two years, often paid for by the seller or builder.
What it is
With a 2-1 buydown, your rate is 2% lower in year one and 1% lower in year two, then settles at the full note rate. Someone pays to fund it upfront, often the seller or builder.
Who it's great for
- Buyers expecting income to grow
- New construction with builder incentives
- Easing into a new payment
Key features
- Lower payment in years 1 and 2
- Often funded by seller concessions
- Then a fixed note rate
General requirements
- You qualify at the full note rate
- Buydown funds placed at closing
- Works with many loan types
General guidelines only. Every loan is subject to credit approval, underwriting and property review. Not a commitment to lend.
Common Questions
Who pays for the buydown?
Usually the seller or builder, though a buyer can too.
Is it the same as buying points?
No. Points lower the rate for the life of the loan. A buydown is temporary.
What if I refinance early?
Unused buydown funds are often applied to your balance. I'll confirm the details.
Can I combine it with FHA or VA?
Often, yes.
Is a 2-1 Buydown Loan Right for You?
Let's talk about your situation. Honest answers, no pressure.
NMLS #172296 | Licensed in Colorado