Buydown | Noffke Homes

Exclusive Noffke & Fairway Offer

Temporary Seller 3-2-1 Buydown*

At Fairway Independent Mortgage Corporation, borrowers can combine a Fairway Rate Rescue™ temporary buydown with our extended lock program.* When utilizing the extended lock program, borrowers can lock an interest rate on new construction loans for a period of up to 360 days.

What is a Temporary Buydown?

A temporary buydown is an up-front interest payment that lowers the interest on a fixed-rate mortgage for the first one, two or three years of the mortgage, after which the interest rate reverts to the full note rate for the remainder of the loan.

To cover the difference between the reduced payments made by the borrower and the regular payments received by the lender, a predetermined amount is withdrawn from a special escrow account that is set up for that purpose. The total monthly payment received by the lender, consisting of the payment made by the borrower plus the withdrawal from the established escrow account is the same as it would be in the absence of the temporary buydown.

The table below lists the temporary buydown options by loan type.

*A 3/2/1 temporary buydown is only available as a seller-paid buydown. **Lender-paid buydown is only available using premium pricing and may not be available for every scenario. ***Not available through all Jumbo investors.

How Does a 3/2/1 Temporary Buydown Work?

A 3/2/1 temporary buydown is a temporary reduction below note rate of three percent (3%) during the first year, a reduction below note rate of two percent (2%) during the second year of the loan, and a reduction below note rate of one percent (1%) during the third year, after which the interest rate reverts to the full note rate for the remainder of the loan. The interest rate change each year is automatic, and the borrower is not required to requalify for the loan.

What are the benefits?

Benefits to the Seller:

✅ A buydown may help you avoid price reductions.

✅ The cost you incur may be a tax write-off. *

✅ A concession may foster goodwill in the process of selling your home.

✅ It makes your home available and appealing to a wider group of homebuyers, especially in a higher rate atmosphere.

Benefits to the Buyer:

✅ You can save money up front when purchasing a home.

✅ A lower interest rate may result in lower monthly mortgage payment.

✅ You may be able to use that extra cash for other expenses associated with homeownership.

✅ Any unused funds will be applied as a loan principal reduction.

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