Buyers - Benefits To The Buyer
BUYERS:
- BUY WITH CONFIDENCE
- ELIMINATE RISKS
- INCREASE AFFORDABILITY
- ENHANCE YOUR BUYING POWER
- EASE INTO HOMEOWNERSHIP
- REDUCE YOUR MONTHLY PAYMENTS
- CLAIM TAX BENEFITS (IRS Rev. Proc. 94-27)
- BECOME A STRONGER BORROWER
- FEEL GOOD ABOUT YOUR PURCHASE
How Much does 3-2-1 Buydown Save a Buyer?
How Much does 2-1 Buydown Save a Buyer?
Why are Buydowns Cost Effective for Buyers?
How Much does 3-2-1 Buydown Save a Buyer?
Monthly Principal & Interest Payments
Seller Subsidy or Cost of 321 TBD
| |
Year 1 |
Year 2 |
Year 3 |
Year 4
through 30 |
|
Loan
Amount |
3.5% |
4.5% |
5.5% |
6.5% |
Cost of
3-2-1 Buydown |
| 300K |
$1,347 |
$1,520 |
$1,703 |
$1,896 |
$13,416 |
| 400K |
$1,796 |
$2,026 |
$2,271 |
$2,528 |
$17,889 |
| 500K |
$2,245 |
$2,533 |
$2,839 |
$3,160 |
$22,361 |
| 600K |
$2,694 |
$3,040 |
$3,406 |
$3,792 |
$26,833 |
| 700K |
$3,143 |
$3,546 |
$3,974 |
$4,424 |
$31,305 |
| 800K |
$3,592 |
$4,077 |
$4,542 |
$5,056 |
$35,777 |
| 900K |
$4,041 |
$4,560 |
$5,110 |
$5,688 |
$40,250 |
| 1.0M |
$4,490 |
$5,066 |
$5,678 |
$6,320 |
$44,722 |
| 1.5M |
$6,735 |
$7,600 |
$8,516 |
$9,481 |
$67,083 |
How Much does 2-1 Buydown Save a Buyer?
Monthly Principal & Interest Payments (P&I)
Seller Subsidy or Cost of TBD
| |
Year 1 |
Year 2 |
Year 3
through 30 |
|
Loan
Amount |
4.5% |
5.5% |
6.5% |
Cost of
2-1 Buydown |
| 300K |
$1,520 |
$1,703 |
$1,896 |
$6,827 |
| 400K |
$2,026 |
$2,271 |
$2,528 |
$9,103 |
| 500K |
$2,533 |
$2,839 |
$3,160 |
$11,379 |
| 600K |
$3,040 |
$3,406 |
$3,792 |
$12,655 |
| 700K |
$3,546 |
$3,974 |
$4,424 |
$15,931 |
| 800K |
$4,077 |
$4,542 |
$5,056 |
$18,207 |
| 900K |
$4,560 |
$5,110 |
$5,688 |
$20,483 |
| 1.0M |
$5,066 |
$5,678 |
$6,320 |
$22,759 |
| 1.5M |
$7,600 |
$8,516 |
$9,481 |
$34,139 |
Why are Buydowns Cost Effective for Buyers?
This chart shows the cost of a 3-2-1 Buydown for the Seller in comparison to the amount he’d have to reduce his price to achieve similar savings for the Buyer. For example: The cost of a 3 2 1 Buydown on a $500,000 mortgage amount is $22,361 (initial payment: $2,245). The seller would need to reduce his price by $144,762 to offer the same initial payment at 6.5%.
| Loan Amt. |
3.5% |
6.5% |
Payment Differential |
EQUIVALENT
PRICE REDUCTION
30YR @ 6.5% |
cost of 321 TBD |
| 300K |
$1,347 |
$1,896 |
$549 |
$86,856 |
$13,416 |
| 400K |
$1,796 |
$2,528 |
$732 |
$115,810 |
$17,889 |
| 500K |
$2,245 |
$3,160 |
$915 |
$144,762 |
$22,361 |
| 600K |
$2,694 |
$3,792 |
$1,098 |
$173,715 |
$26,833 |
| 700K |
$3,143 |
$4,424 |
$1,281 |
$202,668 |
$31,305 |
| 800K |
$3,592 |
$5,056 |
$1,464 |
$231,620 |
$35,777 |
| 900K |
$4,041 |
$5,688 |
$1,647 |
$260,573 |
$40,250 |
| 1.0M |
$4,490 |
$6,320 |
$1,830 |
$289,525 |
$44,722 |
| 1.5M |
$6,735 |
$9,481 |
$2,745 |
$434,288 |
$67,083 |
