Buydown FHA Mortgages in Georgia

Buydown 30 year Fixed rate Programs

Very Popular Temporary Buydowns

When you are purchasing a home with our FHA Home loans, the seller of the home can pay up to 6% of the sale price ,seller concessions or closing costs for you to use.With that 6% concessions, we will allow you to lower the note rates 2% the first year and 1% the second year. The payment will then reflect the third year the normal fixed rate payment. The seller acually pays out of the concessions the difference in the monthly payments. Important to note: This is not an adjustable rate mortgage

A temporary buydown allows for the reduction of the interest rate charged on a loan for a specified period of time. The interest rate is then periodically stepped up to the actual Note Rate (the permanent interest rate which is stated on the Note). Temporary buydowns result in a lower monthly mortgage payment due to the reduction in the interest rate, thereby allowing a borrower to qualify for a larger loan than their income would normally support. Qualifying ratios are restricted to 25%/33% to ensure that the planned increases that occur in the monthly mortgage payment will be absorbed adequately by the borrower. Temporary buydowns may be especially helpful for borrowers who expect to experience increases in their incomes with a year or two of obtaining their mortgage loan (e.g. recent college graduates, younger professionals, etc.).

2-1 Temporary Buydown

A 2-1 temporary buydown is a mortgage loan option allowing monthly payments to be calculated at the Note Rate minus 2% for the first year of the loan. Monthly payments for the second year of the loan are figured at the Note Rate minus 1%; and finally calculated at the actual Note Rate for the remainder of the loan term.

1-0 Temporary Buydown

A 1-0 temporary buydown is a mortgage loan option which allows monthly payments to be calculated at the Note Rate minus 1% for the first year of the loan. Monthly payments for the remaining term of the loan are calculated at the Note

Interest Rate Putdowns

For example:

A borrower obtains a 30 year fixed rate loan for $250,000 from us with a 2-1 temporary buydownoption. The Note Rate on the loan is 5.75%. However, under the buydown, the borrower will make payments based on a 3.75% interest rate for the first loan year, and based on 4.75% for the second loan year. The borrower will not make a full mortgage payment based on the Note Rate of 5.75% until after the first two full loan years.Therefore, the temporary buydown escrow account will hold $5,471.42, which is calculated by subtracting the total payments made at the lower interest rates from the total of the payments that would have been required at the Note Rate:

Example: the 30 year fixed note rate is 5.75% based on $250,000 loan at $1,458.93 per month

Loan Year

Borrowers Rate

Borrowers Payment

Amount from Seller

1st Yr ( 1-12)

2% lower or 3.75%

$ 1157.79 for 12 months

$3613.68

2nd Yr (13-24)

1% lower or 4.75%

$ 1304.12 for 12 months

$1857.74

$ 5471.42 Total Pledged Buydown Funds that the seller would pay approx . 2% of the 6% would go to the buydown of your monthly payment.

Note: We offer a 1/1 buydown feature that would reduce the rate by 1% for 12 monthly payments.

Access to or use of this Mortgage Web Site constitutes consent to the following terms:

Interest rates, terms, loan programs and other information are subject to change without notice. Full disclosure of product terms and conditions is provided upon request. Network Funding, LP makes no express or implied warranty regarding the information or data presented on this web site, and hereby expressly disclaims all legal liability and responsibility to persons or entities who use or access this web site and its content, based on their reliance on any information or data that is available through this web site. PLease call 800.772.1193 extention 706 if you have further questions about this site or about any mortgage program changes.