📢IMPORTANT MORTGAGE INTEREST RATE UPDATE & TRENDS!🚨

What Is the Deal With 4.99%* rates being offered by lenders and builders? Are they legit?🤔

The answer is yes, this rate is legit.

However it is misleading…

First of all, this rate is not fixed for 30 years.

This is known as a 2-1 buydown meaning that rate the first year is 4.99%, 5.99% the second year and 6.99% for the remaining 28 years.

Next, in order to get this program, a 2% fee has to be paid by the the seller which is already built into the price of the home, so the sales price is artificially higher to pay for this.

Secondly, the rate the buyer ends up with is 6.99% which is a .5% higher than the current 30 year fixed rate. 2-1 buydowns are only gimmicks that are not a good long term financing option. Those who promote them are selling the buyer the theory that rates will come down in 2 years and so you will be able to refinance back down to the lower rate, quite a gamble.Last, many of these quotes are not accurate.

In other words, the annual percentage rate for this product is *7.125%. I have seen the APR quoted for that rate at 5.25%. The APR has to factor in the final rate plus all costs the borrower pays, not based the APR on the first year’s rate.

We recommend,if you are going to buydown the rate, than use a permanent buydown, not a temporary one. This is the best product for this market.

Permanent buydowns are in the mid 5% range for conventional loans and FHA buydowns are even lower.

Ralph Migliozzi
Broker Originator, Serving Northern California, NMLS 282851 DRE #01002038 rc-advantage.com

Call for details. 530-330-3073

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