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An interest rate buydown, or step payment as it is also called, is dependant on current market rates. A type of buydown often used is the two-one payment, which means that you would pay above market rates at the beginning of the loan and on the later half, you would pay below the market rates. This can work extremely well if timed right. You can time it correctly by paying above market rates when the market percentages are very low, and then pay below when the market rates rise. Another form of buydown is the three-two-one buydown. This acts much like the two-one, but is a more gradual change. For more information on buydowns, contact your interest rate professionals at Tucson Arizona Mortgage.com
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