A 2-1 rate buy down is a mortgage financing option that can offer significant benefits to homebuyers. From lower monthly payments to long-term savings on interest rates. San Diego Realtor Emma Dearing goes over these benefits of the 2-1 buy down. Whether you're a first-time homebuyer or an experienced investor, understanding the benefits of a 2-1 rate buy down can help you make an informed decision about your mortgage financing options.

Are you tired of waiting for the rates to drop while watching what could be your perfect home pass you by? And what if I told you that you could get those lower rates today?

Hi, I'm Emma Dearing with Whissel Realty. And today, I'm going to talk to you about the 2-1 rate buy down. When interest rates rise, lenders are looking for creative ways to be more competitive in a changing market. One of those programs that they offer is a 2-1 rate buy down.

When compared to an overall rate buy down, the 2-1 buy down is much more affordable and is applied to the first two years of your loan. So with the 2-1 buy down in year 1, your interest rate is going to be 2% lower than what the current interest rate is. For year 2, your interest rate is going to be 1% lower. By year 3, you'll be back to what that current starting interest rate is.

And you might be saying, "Well, what if by year 3, I still can't afford today's current rates?" And one thing that I love about this 2-1 buy down program is that more often than not, buyers are able to refinance by year 3.

In fact, when compared to an overall rate buy down, with the overall rate buy down, if you refinance early, which you will, the remainder of that money that you paid is a lost cost. But with the 2-1 buy down, if you refinance before the two years you've paid for, you actually get that money back.

Additionally, we can negotiate to have the seller cover the cost of this buy down for you. So if you're frustrated with waiting to get into the market but wanting that lower interest rate, let's sit down and talk about how we can make this program work for you.