3-2-1 mortgage buy-down PROS and CONS

Everybody wants to pay a lower mortgage rate, but it comes with a cost. In today’s video, I'm going to define a 3-2-1 mortgage rate buydown and weigh the pros and cons of that kind of option. I touch on the upfront costs when people buy down their mortgage, consumer behavior with adjustable mortgage rates, why it’s important to stick to your home budget when perusing the housing market, and why a fixed-rate mortgage payment might be best for some prospective homebuyers.

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Timestamps:
Intro (0:00)
What’s a 3-2-1 Buydown Mortgage? (0:39)
Positives of a Buydown (2:22)
Cons of a Mortgage Buydown (3:42)
Is a 3-2-1 Buydown a Good Deal? (7:21)
Questions? Get in Touch! (10:07)

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[Danny-sxcj]

I’ve been seeing a lot of marketing (as you’ve said) on 3-2-1 lately and it sounded too good to be true. I knew when I heard it that I had to get your take on this. Thanks for being a trusted voice on all things mortgages Matt! So glad I’m subscribed.

[kikhorse]

Great video. Thanks for sharing the pros and cons of 3-2-1! You are very clear, concise, and honest. :)

[RaceForGoodLife]

Hi Matt! new subscriber here! I totally understand the point! what if the rates are going down as lately? would it be better buy down credit points when the rates are goind down anyways... maybe the 3 2 1 is a better option at this time for me as a new buyer..! thank you for your output on this...

[thehomeguy]

Great explanation! It's nice to see an industry insider actually articulating both the pros & cons of ANYTHING! I run my real estate business the same way...straight talking.
New subscriber here! Thanks for posting. 👍👍

[bt]

Let's say I do the 2-1 buy down. By year 3 when the rate goes back to normal, can't i just refinance? And possible work out a rate that I had in year 1 or 2?

[corbinclaypool]

Matt, great video brother, I’ve seen your vides and they’re class! My only question for you is, on the 2/1 buy-down and 3-2-1 buy-down it’s to my knowledge that the upfront cost stays inside of escrow, when / if you have the opportunity to refinance, the upfront amount goes towards a principal reduction at that point. That’s of course if the rates drop. Thought is, instead of charging points since we’re seeing a lot of that lately, they get a lower payment / rate temporarily and when the market shifts and rates drop. Keep on pushing the videos man. I started my channel not to long ago!

[RaceForGoodLife]

3-2-1 very nice thing! If I would have extra cash for down payment, I would like to ge it! and put that extra savings from low rates into an extra payment to Principal only each year wich will affect the rest of my interest for 28 more years.

[dancaruso]

Hey Matt would love to hear your take on what happened with sprout mortgage and if you think we will see this happen more and more.

[Nick_Loans]

Matt great videos. I’m also with Umortgage, just started at the Bally Team branch last month!

[ihustle]

How about if buyer buys the 3-2-1 buydown? Will that still benefit them financially??

[charmed]

You can get the seller to pay that down right?

[Cuyayaplay]

I feel like I'm paying too much for my house comparing some numbers you showed...
I have a balance of 350k and I'm paying 2, 800 with 3.2 rate that sounds right ?

[pedrotorres]

THIS LOANS ARE A SCAM. YOU WILL LOSE EVERYTHING IF YOU TAKE THEM