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How Can I Use A Buy Down On A Mortgage?
(presented by www.refinance-refinance.net - mortgage lenders)



By Ben Afzal

Basics

Mortgage lenders carefully look at your application and offer you an interest rate based on many factors, including:

  • your income
  • assets
  • bank statements
  • tax records
  • employment documentation
  • letters of explanation
  • business licenses or permits
  • credit history

Mortgage lenders use all of these factors and more to determine what kind of a risk you are. The riskier you are the more likely they are to increase your interest rate. This increase is compensation to the lender is compensation for lending to a higher risk borrower.

Interest Rate Offered Too High?

Mortgage add up all your risks and offer you an interest rate accordingly.

The higher your interest rate is the higher your monthly payment is.

For some borrowers the interest rate may be too high.

You may be able to “buy down” your interest rate by paying the lender money up front.

(Article continues below)

HOME LOANS ADVERTISEMENT

In a purchase loan you may be able to use a closing cost credit towards this. In a refinance you may be able to use some of your equity to pay for the buy down. In either of these two ways you can avoid coming up with cash out of your pocket. You can always try to use your own cash to buy down your interest rate as well.

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This entry was posted on Friday, October 13th, 2006 at 2:21 am and is filed under Refinance. You can follow any responses to this entry through the RSS 2.0 feed. Responses are currently closed, but you can trackback from your own site.

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