Solving High Rates in Utah with a Temporary Buydown

A Temporary Buydown has made a strong revival in the mortgage industry as a popular solution that combats high interest rates by making payments more affordable for a period of time ranging from one to three years.

Hello! My name is Scott Buehler, a lead mortgage advisor with Guild Mortgage local to the Southern Utah area.

Want to talk? Head on over to my Southern Utah Mortgage Lender page to setup an appointment!

On this page, I would like to share a short promotional video and go over some of the many awesome benefits of using a temporary buydown.

Are High Interest Rates Slowing You Down?

If you are a current homeowner that feels trapped with a lower-rate mortgage, consider a temporary buydown which would allow you to sell your current house then by a new primary residence. Do this as part of your move-up or move-down strategy, or relocate to a better city, neighborhood or school area that aligns with your current goals.

If you are renting and want to buy, consider a temporary buydown to help make payments more affordable for up to three years.

Advantages of a 2/1 Temporary Buydown Include:

• Funds come from the seller. Consider asking for seller-paid costs vs a lower purchase price. As long as the property appraises for the offer amount with the required, you will see significant reductions on your first two years of payments.
• Funds will sit in your escrow account on your mortgage.
• Upon a refinance, any unused pre-paid interest left would apply to your principal mortgage balance, further reducing your payments on the refinance.

This is unlike a permanent interest rate buydown where you permanently buy down the rate with a one-time cost known as points. When doing a permanent buydown, the reduction in your payment is likely to be less significant but would last the entirety of your loan term.

Types of Temporary Buydowns

• A 1-0 temporary buydown reduces the interest rate by one percentage point for the first year before going to the full note rate afterwards for the remaining term of your loan (typically 30 years).
• A 1-1 temporary buydown reduces the interest rate by one percentage point for the first and second year, before going to the full note rate afterwards for the remaining term of your loan.
• A 2-1 temporary buydown reduces the interest rate by two percentage points in the first year, then by one percentage point in the second year, before going to the full note rate afterwards for the remaining term of your loan. Note: This is Scott Buehler's most popular version as chosen by his clients and shown in the video above.
• A 3-2-1 temporary buydown reduces the interest rate by three percentage points in the first year, two percentage points in the second year, then by one percentage point in the third year, before going to the full note rate afterwards for the remaining term of your loan.

Loan Program Options

• Conventional (Fannie Mae or Freddie Mac)
• FHA
• USDA (2-1 or 1-0 temporary buydown options)
• VA
• Jumbo (2-1 or 1-0 temporary buydown options)

Get Your Custom Video Presentation

Would you like to consider a temporary buydown as part of your home purchase strategy? 

I would like to create a custom video presentation that is recorded specific to your goals including your target payment amount, purchase price, location (for property tax calculations) and more!

Please schedule a Calendly appointment today or visit my lender page here for all of my contact options.

Important Disclaimers:

Rates shown in the video above are accurate as of September 1st, 2023, and used for illustration purposes only. Your actual rate, payment and costs could be higher. Get an official Loan Estimate before choosing a loan. This temporary buydown scenario assumes a purchase price of $400,000, a loan amount of $380,000, a down payment of $20,000 (5%) and a seller credit of $10,000. Buyer will make their 1st year payments of $2,369.93/mo. with an interest rate of 4.99% with APR 5.374%. Buyer will make their 2nd year payments of $2,608.18/mo. with an interest rate of 5.99% with APR 6.407%. Buyer’s year 3-30 will make payments of $2,857.93/mo., at interest rate of 6.99% with APR 7.439%.

All information, loan programs & interest rates are subject to change without notice. All loans subject to underwriter approval. Terms and conditions apply. Borrowers must qualify based on the note rate of the program selected. The buydown cash amount can only be paid by a participating seller or lender. Contact Scott Buehler at Guild Mortgage, (435) 590-1019, or sbuehler@guildmortgage.net, for home financing options.