Is This the Mortgage Cheat Code?

Right now, the cost of money is high, and most prevalently seen in these high interest rates.  And these high interest rates are causing many buyers to lower their price ranges to be able to afford the monthly payments.  And in a time where we know that interest rates will come down in the near future, wouldn’t it be great if you could have a way to “bridge” that gap in time with a lower monthly payment?  Almost like, going back in time and making the decision to buy back when you wish you would have. Well, what if I told you there is just such a thing.  It’s called the 2-1 buydown. 

A 2-1 buydown is a temporary rate buy down, lasting 2 years.  The way it works is simple.  If the current rates are 7%, the 2-1 Buydown would give the buyer a 2 point reduction the first year meaning an interest rate of 5%.  Then the second year, the interest rate would increase by a point to 6%. And then in the 3rd year, the rate would go up one last point to a final rate of 7% for the remainder of the loan term. So using this example, with a $400,000 loan:

If economists are correct and inflation can begin to be curbed within the next 12 months, interest rates should in turn reduce, and you can refinance before you ever see that increase to the final rate term.