How 2-1 Buydowns Help Both Buyers and Sellers

Explaining a 2-1 buydown and how it can benefit both buyers and sellers.

Have you heard of a 2-1 buydown? It’s a great resource, but a lot of people don’t know about it. To help with this, we’re here with a rundown of what buydowns are and how you can take advantage of them.

2-1 buydowns are a great way for a buyer to get into a home and reduce their mortgage payment for the first two years. For sellers, they’re a good incentive to offer on the listing. In short, a 2-1 buydown is a seller concession where a buyer will get 2% off their mortgage payment the first year and 1% the second year. The seller contributes that money to the buyer. The lender holds that money in escrow and will pay toward the buyer’s principal interest, tax, insurance, and the total combined payment.

 "A 2-1 buydown can benefit both the buyer and the seller."

For sellers, the benefit is making your listing more attractive. Buyers are having a hard time right now because the interest rates and home prices are so high, especially here in Colorado. As a result, many sellers have to lower their price points in large increments, and houses are sitting on the market longer. A 2-1 buydown is a great incentive that sellers can offer to avoid this.

If interest rates are higher in a few years, then buyers are lucky because they have locked in that lower rate. If rates go down, then buyers can always refinance.

We’ve been working hard to find solutions for both our buyers and sellers in this tricky market, and we have seen that this one works well. If you want more information on the 2-1 buydown, please reach out to us. Also, we have lenders that we work with and we'd be happy to pass them along to you. Call or email us anytime, we’d be happy to hear from you.