How Does a 2-1 Buydown Work? (REALLY) | Pros, Cons, Alternatives

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In this video:
00:00 - Introduction: Are buydowns a good thing?
00:25 - What is a temporary buydown?
00:44 - The most common version: the 2-1 buydown
01:19 - Where does the money come from for a buydown?
01:43 - How does a buydown work?
02:17 - What types of buydowns are available?
02:43 - What are the advantages of a buydown?
04:20 - A warning about buydowns!!
05:17 - How do you establish a temporary buydown?
05:36 - Buyer-funded buydown – a good idea?
06:18 - Lender-funded buydown – how does it work?
06:46 - Lender-funded buydown – is it a good deal?
07:15 - Seller-funded buydown – most common source of funding
07:56 - Buydowns are just one type of seller concession
08:54 - Is it better to just get a credit from the seller for your closing costs?
09:17 - How to DIY your own buydown account!
10:03 - A buydown just feels good (and that’s okay)
10:44 - The BEST use for a buydown – spending excess seller credits
11:07 - What happens when seller credits exceed closing costs?
12:10 - How do discount points compare to buydown – an example
13:06 - The HUGE advantage a buydown has vs discount points
14:02 - So my clients chose the buydown and lived happily ever after

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Julee Felsman, SVP of Mortgage Lending NMLS 120831
Guaranteed Rate Inc NMLS 2611 Equal Housing Lender.
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