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How does a 2-1 buydown work?

Answered by Onias Derilus, Mortgage Capital · NMLS# 1859012 · Florida licensed mortgage broker

A 2-1 buydown lowers your rate by 2% in the first year and 1% in the second before settling at the full note rate in year three. The cost is paid upfront, often by the seller or builder.

It eases you into the payment and is popular with Florida builders offering incentives. If rates fall, you can refinance during the buydown period. We'll structure the seller credit to fund it.

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