2-1 Buydown Program | Greater Nevada Mortgage

Whether you’re a homebuyer, a real estate agent or a builder, Greater Nevada Mortgage’s 2-1 Buydown Program helps achieve the same thing: getting more people into homes.

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How GNM’s 2-1 Buydown Program Works

The 2-1 Buydown Program lowers the borrower’s interest rates for the first two years of their mortgage. Available for conforming 15-year and 30-year fixed rate mortgages, the borrower is qualified based on an approved and contracted interest rate prior to the 2-1 rate reduction. The seller will fund the temporary buydown, which must be included in the purchase contract and negotiated by the real estate agent during the offer process. The lump sum is held in a custodial escrow account and is applied to the buyer’s monthly payments. As a result, the buyer will have a reduced monthly payment for the first two years with the difference coming out of the escrow account.

Let’s look at an example below using a 30-year fixed rate mortgage for $450,000 at a contracted 6.50% interest rate (excluding any property taxes, home insurance payments, or other costs included in the monthly payments).

Year 1

The contracted interest rate is lowered by 2.00% from 6.50% to 4.50% for the buyer, with the monthly payments dropping from $2,844.31 to $2,280.08. This results in an annual savings of $6,770.76 for the first year of owning the home.

Year 2

The contracted interest rate is lowered by 1.00% from 6.50% to 5.50% for the buyer, with the monthly payment dropping from $2,844.31 to $2,555.05. This results in an annual savings of $3,471.12 for the second year of owning the home.

Years 3 – 30

The contracted interest rate is now in effect at 6.50% for the remainder of mortgage term for the buyer.

Have Questions or Ready to Get Started with a 2-1 Buydown?

Our expert Mortgage Consultants are ready to help turn your dreams into reality. You can begin by applying online, or you can contact us and we’ll be happy to help answer any questions you have!

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APR = Annual Percentage Rate. APR is the cost to borrow money expressed as a yearly percentage. For mortgage loans, excluding home equity lines of credit, it includes the interest rate plus other charges or fees.

Rates and terms are subject to change without notice. Rates are for illustrative purposes only, and assumes a borrower with a credit score of 700 or higher which may be higher or lower than your individual credit score. Adjustable Rate Mortgage (ARM) loans are subject to interest rate, APR, and payment increase after each change period. For instance, a 5/5 ARM means that you will pay a fixed rate for the first five years of the loan, and then your rate is subject to change once every five years thereafter through the remainder of the loan. Interest rates and APRs are based on current market rates, and may be subject to pricing add-ons related to property type, loan amount, loan-to-value, credit score and other variables. Depending on loan guidelines, mortgage insurance may be required. If mortgage insurance is required, the mortgage insurance premium could increase the APR and the monthly mortgage payment. Your loan’s interest rate will depend upon the specific characteristics of your loan transaction and your credit history up to the time of closing. The estimated total closing costs in these rate scenarios are not a substitute for a Loan Estimate, which includes an estimate of closing costs, which you will receive once you apply for a loan. Actual fees, costs and monthly payment on your specific loan transaction may vary, and may include city, county or other additional fees and costs. Not all loan options are available in every state. Borrower is responsible for any property taxes as a condition of the loan. Membership with Greater Nevada Credit Union is required for select loan options. This is not a credit decision or a commitment to lend.

Please contact a Mortgage Consultant to learn about all details on loan options and programs available. You may contact one directly, or call Greater Nevada Mortgage at 775-888-6999 or 800-526-6999. We do business in accordance with the Federal Fair Housing Law and the Equal Opportunity Act, and the California Fair Employment and Housing Act.