Interest Rate Buy Downs

Orange County Mortgage’s most common buydown was known as the 2-1 buydown. The buyer paid 3 points above the market points in order to pay a below market interest rate during the first 2 years of the loan. They would they proceed to pay the old market price for the remaining years of the loan.

Orange County Home Loan has an interest rate buydown. If the current market rate is 8.5% at a cost of 1.5 points for a conforming fixed rate loan, the buydown will give the borrower a first year rate of 6.5% instead. The second year would then be 7.5%, with the third through 30th year rate being 8.5%. The cost would then be 4.5 points. Because of the high points associated with them, buydowns are usually paid for by the transferring company.

Orange County Mortgage has designed variations of the old buydowns in order to avoid charging higher points at the beginning of the loan. If the current rate is 8.5% for a fixed rate loan at the cost of 1.5 points, the buydown will give the borrower a first year rate of 7.25%. The second year rate would be 8.25% with the remaining years at a rate of 9.25% (3/4 point higher than market with cost staying at 1.5 points).

Orange County Mortgage also offers a 3-2-1 buydown with a 3% below market rate, instead of a 2% below market rate. We also offer flex-fixed buydown which increases every six months as opposed to annually.

Orange County Home Loan flex-fixed jumbo buydown has a rate of 7.5% for the first six months, 8% for the second six months, 8.5% for the third six months, 9% for the next six months, etc. until reaching the 37th month rate at 9.875% and remaining there until the end of the term. The cost would stay at 1.5 points throughout the entire term of the loan with an 8.875% rate for a comparable jumbo for 30 years.

Introductory rate ARMs

Reverse Mortgages

London Inter Bank Offered Rate

Balloon Mortgages

Interest rate buydowns

Cost of funds index

Graduated Payment Method