What Is a Rate Buy Down & What Does it Mean for You?

We’re beginning to see prices rising in all aspects of our lives. Unfortunately, this includes interest rates too.

While rising interest rates may cause potential homebuyers to feel a little hesitant about purchasing a home, the truth is that interest rates are still at historic lows. Plus, if you’re searching for a home now, a rate buy down can be the difference between dreaming of a new home and actually buying your dream home.

The good news is you can stop kicking yourself wishing you had just taken the opportunity a few months ago before rates began to climb. A special rate or rate buydown is like hitting the rewind button on the interest rate hike.

Rate Buy Down Promotions

If you live in the Bay Area (or want to!), we (Homes Built for America) plan to run a special summer promotion for our new SoMi Condos and townhomes in Hayward to combat the costs of rising interest rates.

What is a Rate Buy Down

Now, you may be wondering, “what is a rate buydown?” It’s a way for homebuyers to lower their interest rate by paying discount points at closing. Or, more simply put, you pay more money upfront in exchange for a lower interest rate.

Recent Rate Hikes

As we discussed in a previous blog post, you don’t want to let rising interest rates deter you from buying a home for several reasons:

  • While they’ve gone up, they’ve only gone up a couple of percentage points
  • It’s better to lock them in now because odds are they will continue to go up
  • Locking in now will save you money over the life of your home loan
  • It will help you avoid housing cost increases
  • As soon as you buy the home you have an asset that will most likely gain value over time

According to Freddie Mac, the average interest rate over the last 50 years has been 8%. So even today, with interest rates on the rise, it’s still a very good time to buy a home.

Make Your New Home Dreams a Reality

We can help you realize your dreams of a new home (and new home office). Reach out to us to learn more about our condos and townhomes in Haywood, as well as our preferred lenders. We can talk about a rate buy down and other options to make affording your dream home within reach.

Talk to our Concierge today to make your homeownership dreams a reality!

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