May 19th, 2009
Homebuilders Offering Big Discounts on Loans
Homebuilders are offering significant discounts on interest rates to sell surplus housing inventory. These interest rate “buy-downs” can drop your rate considerably, sometimes as much as a point. At today’s rates, you could be able to get a home loan as low as 3.5%.
These discounts aren’t new, but are gaining popularity for large volume home builders as a way to entice buyers for their completed, but unsold, new construction homes. The home builders are essentially paying points on your loan in order for the lender to lower the interest rate. For those homebuilders large enough to have a partnership or relationship with a lender, this becomes more beneficial as they can get better deals and pass them on to prospective buyers.
These loans discounts are available for high credit quality borrowers only. Also, these discounts are subject to each builder’s set of rules and requirements. Often times these discounts will lower house payments enough to help certain borrowers’ debt to income ration meet qualifications for a loan.
Remember to read the fine print; most of these buy-downs are good for the life of the loan, but some modifications only last for an initial few years, then adjust into a new, higher fixed rate. If you are in the market for a new construction home, its worth checking out what discounts are available through local builders. The savings on payments may allow you to get into a home you typically might not qualify for.
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Are there any loans available for housing that does not require a down payment anymore? I have plenty of income coming in for the type of house I want, but just now down payment funds.
home loan as low as 3.5%. Wow that’s great. I think this is a very low rate. Great