The Temp Rate Buydown

A temporary mortgage interest rate buydown allows home buyers to lower their interest rate temporarily, making monthly payments more affordable.

In most cases, temporary buydowns are paid for by the seller or a home builder as a closing cost in exchange for receiving the full price on their home. The buyer's interest rate is lower for the first couple of years due to a lump sum of money deposited into a buydown account. The buydown funds are then used to reduce the borrower's monthly payments. As a result, the borrower's rate and payments increase annually until the full note rate is reached at the end of the buydown period.

Buydown Options

Realize AnnieMac's Flexible Buydown Options

    • Conventional
    • FHA Loans
    • VA Loans
    • USDA Loans
    • Primary Homes
    • Yes
    • Yes
    • Yes
    • Yes
    • Secondary Homes
    • Yes
    • No
    • No
    • No
    • Paid Options
    • Seller & Lender
    • Seller & Lender
    • Seller Paid Only
    • Seller & Lender
    • Minimal FICO Score
    • 660
    • 660
    • 660
    • 660

Benefits to Consumers:

It may be hard to envision why a seller would want to buydown a borrowers rate. This is understandable given the nature of the program, but a temporary buydown does have benefits for the seller. In fact, sellers may use a buydown as an incentive for a future buyer to purchase their home due to how it will ultimately benefit them.

Consider This Example:

    • Year
    • Rate
    • Monthly Payments
    • First Year
    • 1
    • 4.5%
    • $1,267
    • Second Year
    • 2
    • 5.5%
    • $1,420
    • Third Year
    • 3
    • 6.5
    • $1,580

Unlock Your Temporary Rate

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