that try broker’s souls. This particular mortgage broker is offering a plan whereby the seller pays down the first two years of interest. That equates to the buyer saving twenty eight percent of their payment the first year and fourteen percent the second year.

Another form of buy-down provides employed by a Long Island broker provides less of a break early on but

When the housing market began to flatten, the first group of sellers to offer concessions and incentives was the developers and builders with large inventories of unsold housing. Upgraded kitchens, landscaping and even cash back were some of the enticements being offered in new developments. Now, individual home sellers are getting into the incentive game with assists from lenders.

One such incentive is the buy-down, in which sellers pay up-front payments to reduce buyers' mortgage rates. Buy-downs have been popular with developers because they enable the builders to offer savings without actually lowering their list prices. That has the negative impact of lowering market rates for new homes – and it also keeps the median prices in many areas artificially inflated.

As an example, one buy-down arrangement is called a "3-2-1," because it lowers buyers' mortgage rates by 3 percentage points during the first year; 2 points the next; and 1 point the third. In the fourth year and thereafter home buyers are responsible for their mortgage payments in full. It’s hard not to call this concept an adjustable rate mortgage that is being adjusted by the seller rather than the lender.

Real estate agents are apparently pumped up by the buy-down phenomenon. One Florida broker proclaimed that “People think that the price is what sells…But reducing the price won’t help very much. Terms are what sell.” That sounds like a little hyperventilating; but these are the times that try broker’s souls. This particular mortgage broker is offering a plan whereby the seller pays down the first two years of interest. That equates to the buyer saving twenty eight percent of their payment the first year and fourteen percent the second year.

Another form of buy-down provides employed by a Long Island broker provides less of a break early on but

om lenders.

One such incentive is the buy-down, in which sellers pay up-front payments to reduce buyers' mortgage rates. Buy-downs have been popular with developers because they enable the builders to offer savings without actually lowering their list prices. That has the negative impact of lowering market rates for new homes – and it also keeps the median prices in many areas artificially inflated.

As an example, one buy-down arrangement is called a "3-2-1," because it lowers buyers' mortgage rates by 3 percentage points during the first year; 2 points the next; and 1 point the third. In the fourth year and thereafter home buyers are responsible for their mortgage payments in full. It’s hard not to call this concept an adjustable rate mortgage that is being adjusted by the seller rather than the lender.

Real estate agents are apparently pumped up by the buy-down phenomenon. One Florida broker proclaimed that “People think that the price is what sells…But reducing the price won’t help very much. Terms are what sell.” That sounds like a little hyperventilating; but these are the times that try broker’s souls. This particular mortgage broker is offering a plan whereby the seller pays down the first two years of interest. That equates to the buyer saving twenty eight percent of their payment the first year and fourteen percent the second year.

Another form of buy-down provides employed by a Long Island broker provides less of a break early on but

in many areas artificially inflated.

As an example, one buy-down arrangement is called a "3-2-1," because it lowers buyers' mortgage rates by 3 percentage points during the first year; 2 points the next; and 1 point the third. In the fourth year and thereafter home buyers are responsible for their mortgage payments in full. It’s hard not to call this concept an adjustable rate mortgage that is being adjusted by the seller rather than the lender.

Real estate agents are apparently pumped up by the buy-down phenomenon. One Florida broker proclaimed that “People think that the price is what sells…But reducing the price won’t help very much. Terms are what sell.” That sounds like a little hyperventilating; but these are the times that try broker’s souls. This particular mortgage broker is offering a plan whereby the seller pays down the first two years of interest. That equates to the buyer saving twenty eight percent of their payment the first year and fourteen percent the second year.

Another form of buy-down provides employed by a Long Island broker provides less of a break early on but

stable rate mortgage that is being adjusted by the seller rather than the lender.

Real estate agents are apparently pumped up by the buy-down phenomenon. One Florida broker proclaimed that “People think that the price is what sells…But reducing the price won’t help very much. Terms are what sell.” That sounds like a little hyperventilating; but these are the times that try broker’s souls. This particular mortgage broker is offering a plan whereby the seller pays down the first two years of interest. That equates to the buyer saving twenty eight percent of their payment the first year and fourteen percent the second year.

Another form of buy-down provides employed by a Long Island broker provides less of a break early on but

that try broker’s souls. This particular mortgage broker is offering a plan whereby the seller pays down the first two years of interest. That equates to the buyer saving twenty eight percent of their payment the first year and fourteen percent the second year.

Another form of buy-down provides employed by a Long Island broker provides less of a break early on but lasts the life of the loan. This buy-down concept provides that sellers can pay 2 percent of the entire mortgage amount to lower the interest rate by half a percentage point.

As an example, the seller pays $5,000 to bring a mortgage rate down from 6.5 percent to 6 percent on a $250,000 mortgage. That saves the buyer $81 a month on a 30-year fixed loan; not a massive monthly payback but worth almost $30,000 over the life of the loan.

A Philadelphia realtor notes that many buyers prefer the savings in the early years of the mortgage, as has been proven by the ascension of ARMs to their present prominence in the industry. This particular broker represents some properties that offer buyers a five-year, buy-down plan: They would have an interest rate of 3.5 percent the first year, 4.5 percent the second, 5.5 percent the third and 6.5 percent the fourth and fifth.

For the same reason that ARMs make sense, a buy-down of this type has appeal to buyers not planning to stay in the house very long. Their plan may be an upgrade to a better house or, going in the other direction, they may plan to downsize in a few years. Getting the savings early on has greater appeal.