Buying a new home combined with the rise in interest rates may seem overwhelming. That's why Boone Homes has a team of preferred lenders dedicated to assisting you to find the best options for financing your new home. While the mortgage rates have been rising, it's important to note that they are still historically low. We sat down with Sonya Orlick with Caliber Home Loans to learn more about different financing options such as BuyDowns and Extended Rate Locks.
"Marry the house, date your rate! You can always refinance your home later and rates are still historically low. I also suggest you lock in your rate - It's well worth the peace of mind." - Sonya Orlick
Buy Down Options
What is a buydown?
A buydown is a mortgage option where the payment is reduced temporarily as if the rate was ‘bought’ down for the first 2-3 years of the loan (sometimes for the life of the loan). With a buydown, homebuyers are able to purchase their homes with lower monthly mortgage payments to start.
How does it work?
Borrowers pay a buydown fee, or upfront cash deposit, to cover the difference between the original and discounted payment. The money is typically put into an escrow account and paid to the lender to make up the difference.
Benefits
- More affordable mortgage payments upfront
- Lower monthly payments up front to give homeowners time to plan and budget
- Qualify for a higher loan amount in certain circumstances if cash flow is expected to increase substantially after the front end of the mortgage
Extended Rate Locks
What is an extended rate lock & who can take advantage of them?
An extended rate lock is a lock that is longer than 90 days and can allow a client to lock in a rate for up to 360 days! Anyone who is constructing a new home and using a Conventional, FHA, USDA or VA loan program can use an extended rate lock.
What do Caliber Homes offer for extended rate locks?
Option 1: Refundable deposit at closing with a rate add-on depending on the number of days needed
Option 2: Non-fundable Fee. The client will have a lock fee but no rate add-on to the initial lock.
When building a new home it is important to understand your options and lock in a rate as soon as possible. Contact us today to learn more about a new home community near you and connect with one of our preferred lenders.
