02/22/2024
🏡🍺 This week in Real Estate and Beer!
💰With rates trending back up I wanted to discuss a temporary solution that has been gaining traction, temporary rate buy downs! A temporary buy down reduces the home buyer’s monthly payments in the first year, or sometimes in the first two or three years. Instead of making the mortgage’s full monthly payments from the get-go, the home buyer will make discounted payments for a year or more.
A 2-1 buy down reduces the interest rate by two percentage points in the first year, then by one percentage point in the second year, before rising to the full rate after that.
A 3-2-1 buy down lasts three years, with the interest rate reduced by three percentage points in the first year, by two percentage points in the second year and by one percentage point in the third year.
With a 1-1-1 buy down, the rate is reduced by one percentage point for three years.
The rate buy down expense can be negotiated with the sellers. Ideally, the buyer could refinance in the near future once rates go back down.
🍻 This week I am enjoying Wild Blue Yonder’s Captains Kölsch. It’s named after the fact that my wife, brother, and I were all captains in the Air Force. Of course the name Wild Blue Yonder is a nod to the Air Force fight song and conveys our spirit of adventure. Even better, Wild Blue Yonder Brewing Co. is an official partner of Air Force Academy Athletics for the 23-24 season. Go Falcons!
Have a real estate question, join me for a beer!
