🧮 Temporary Buydown Analysis: Payment Bridging Strategy
The purpose of this tool is to calculate the monthly and total savings offered by a Temporary Interest Rate Buydown (such as a 3-2-1 or 2-1 strategy). This is a powerful negotiation tool where the seller contributes to an escrow account to subsidize your mortgage payment during the initial years of homeownership. This analysis identifies the immediate cash-flow relief provided by the buydown, allowing you to bridge the gap between current market rates and your long-term financial plan.
DISCLAIMER: This tool is for illustrative purposes only. Temporary buydowns require specific seller concessions and are subject to program guidelines (FHA, Conventional, VA). The "Note Rate" remains the permanent rate for the life of the loan after the buydown period ends. A full strategy review is required to verify eligibility and total cost.
3-2-1 Buydown Savings Calculator
Total 3-Year Savings
$0,000
Legal Disclaimer: Figures are for illustrative purposes only. A temporary buydown requires a subsidy account funded by seller or builder credits at closing. Contact Kevin Pennington for specific terms.
How the Subsidy Works
This is a pre-paid interest subsidy. Here is how the logistics work:
- The Funding: The seller provides a credit at closing equal to your total early savings.
- The Account: That credit sits in an escrow account managed by your lender.
- The Payment: Each month, the lender draws the "savings" portion from that account.
- Protection: If you refinance before the buydown ends, remaining funds are applied to your principal. You don't lose the money.
Why Buyers Choose It
- Increased Cash Flow: Extra cash in Year 1 for moving or home improvements.
- Negotiation Tool: Often more impactful than a standard price reduction.
- Refinance Strategy: Qualify at the note rate, but pay much less while waiting for market shifts.
Let's Chat!
If you are interested in a home loan, please fill out our online application form or contact Kevin M. Pennington.
E: kevinp@equitysmartloans.com
P: (425) 894-7852
Mailing Address:
19125 Northcreek Parkway, Suite 120 PMB 2020
Bothell, WA 98011
Kevin M. Pennington
Mortgage Broker
NMLS 1534892
