Lenders improved this product and I learned more about it as well. Check out my follow up video as I think this is a great option for many borrowers: ru-vid.com/video/%D0%B2%D0%B8%D0%B4%D0%B5%D0%BE-W-FJ36fgW8M.html
Hi Matt! new subscriber here! I totally understand the point! what if the rates are going down as lately? would it be better buy down credit points when the rates are goind down anyways... maybe the 3 2 1 is a better option at this time for me as a new buyer..! thank you for your output on this...
Let's say I do the 2-1 buy down. By year 3 when the rate goes back to normal, can't i just refinance? And possible work out a rate that I had in year 1 or 2?
I’ve been seeing a lot of marketing (as you’ve said) on 3-2-1 lately and it sounded too good to be true. I knew when I heard it that I had to get your take on this. Thanks for being a trusted voice on all things mortgages Matt! So glad I’m subscribed.
It seems like it's more and more common as home prices shot up so fast during and after covid and so far the rate hikes haven't caused any "crashes" like some people thought. It seems to be a good "deal" if you have a safe job and can afford the full payments and also take chance that after the 3rd year, rates go down.
Great explanation! It's nice to see an industry insider actually articulating both the pros & cons of ANYTHING! I run my real estate business the same way...straight talking. New subscriber here! Thanks for posting. 👍👍
Matt, great video brother, I’ve seen your vides and they’re class! My only question for you is, on the 2/1 buy-down and 3-2-1 buy-down it’s to my knowledge that the upfront cost stays inside of escrow, when / if you have the opportunity to refinance, the upfront amount goes towards a principal reduction at that point. That’s of course if the rates drop. Thought is, instead of charging points since we’re seeing a lot of that lately, they get a lower payment / rate temporarily and when the market shifts and rates drop. Keep on pushing the videos man. I started my channel not to long ago!
With interest rate at 7.5% to 8.5% today With a 3 2 1 buy down or 2/1 buy down. If you purchase a $600,000 house today at 7.5 or 8% with a 5% down which is around $30,000. Which give you a loan at $570,000. The value of the house drop to 30% - 40%. Would the bank let you refinance? Obviously the bank can’t refinance your house if the value of the house is less that it appraised for.. My brother bought a house a $700,000 house many years ago with $100,000 down however, when the market crash his house is only worth around $350k-$400k. The bank wouldn’t let him refinanced - they can’t refinance since is house is worth less then what he’s paying for. With a 2/1 buydown - and today market - do you think we might be in that position at some point?
3-2-1 very nice thing! If I would have extra cash for down payment, I would like to ge it! and put that extra savings from low rates into an extra payment to Principal only each year wich will affect the rest of my interest for 28 more years.
@@Nick_Loans Good luck to you! I’m also a lending officer, I was formally a underwriter so I understood complex income and how to structure my transactions. Like you, I switched to a retail Lo in early 2014, rates were up, it was slow and after a few years, I was funding 50mm+ annually and now I’m a millionaire today. Dont give up! Its life changing.
@@MattTheMortgageGuyyou say you pay up front, but technically doesn’t the buy down get lumped into your mortgage? So effectively you pay it over the life of the loan?
I feel like I'm paying too much for my house comparing some numbers you showed... I have a balance of 350k and I'm paying 2,800 with 3.2 rate that sounds right ?
