Arizona Mortgage Team

Arizona Mortgage Rates. Refinance FHA, VA and Jumbo Mortgage Loans.

  • Loan Programs
    • FHA Loans
      • FHA 203k Loan
      • FHA Streamline Refinance
      • FHA Kiddie Condo Loan
    • VA Loans
    • USDA Loans
    • HomePath Loans
    • Interest Only Mortgage Loans
    • Refinancing
    • Reverse Mortgages
      • Reverse Mortgage Quote
  • Insurance
    • Arizona Car Insurance
    • Arizona Homeowner Insurance
    • Arizona Life Insurance
    • Arizona Renters Insurance
  • Press
  • Blog

Buying A House With A VA Loan 2/1 Buydown

December 12, 2010

Many people who are Veterans are eligible to buy a house with a Arizona VA loan – and they may not be aware that there is a program available that they can “buy down” their interest rate for the first two years.

VA Loan 2/1 Buydown: How It Works

A temporary buydown is an arrangement wherein the property seller, borrower, lender, builder, developer, or real estate agent deposits money to an account so that it can be released each month to reduce the borrower‘s monthly payment during the early years of the mortgage. During the specified period, the borrower‘s effective interest is ―bought down.  This will reduce the monthly payment in the early stages of the loan, and may allow the borrower to more easily qualify for the loan.

Borrower must qualify at Note rate unless there is evidence that income to support the application will increase to cover the increases in loan payments. Routine Cost of Living Adjustments (COLA) raises cannot be used for this purpose.

The buydown arrangement can be considered a compensating factor. If the residual income and/or debt-to-income ratio is marginal, the buydown plan (used to offset a short-term debts), along with other compensating factors, may support approval of the loan.

Escrowed funds set up for the buydown may not revert to the party that established the escrow. If the property is sold subject to, or on an assumption of the loan, the escrow must continue to pay out on behalf of the new owner.

VA Loan Buydown Restrictions

  • Allowed on purchase transactions only.
  • Maximum 1% increase in one year.
  • Adjustments may only be one time per year.
  • Maximum 2% below note rate

Arizona VA Loan Interest Rate Buydown

If you are buying a house with a VA loan and think that you may want to participate in the VA 2/1 buydown program be sure to as your lender about it.

It will save you money each month on your monthly mortgage payment.

Filed Under: VA loans Tagged With: 2/1 Buydown, VA 2/1 Buydown, VA Loan 2/1 Buydown

Recent Items

  • How Does a VA Streamline Work?
  • Can you Use a Mortgage Assumption after a Divorce?
  • What are the Major USDA Streamline Guidelines?
  • How is the USDA Monthly Guarantee Fee Calculated?
  • How to Purchase USDA Foreclosed Homes?

Latest News

  • How Does a VA Streamline Work?
  • Can you Use a Mortgage Assumption after a Divorce?
  • What are the Major USDA Streamline Guidelines?
  • How is the USDA Monthly Guarantee Fee Calculated?
  • How to Purchase USDA Foreclosed Homes?

Search

IMPORTANT MORTGAGE DISCLOSURES:

When inquiring about a mortgage on this site, this is not a mortgage application. Upon the completion of your inquiry, we will work hard to match you with a lender who may assist you with a mortgage application and provide mortgage product eligibility requirements for your individual situation.

Any mortgage product that a lender may offer you will carry fees or costs including closing costs, origination points, and/or refinancing fees. In many instances, fees or costs can amount to several thousand dollars and can be due upon the origination of the mortgage credit product.

When applying for a mortgage credit product, lenders will commonly require you to provide a valid social security number and submit to a credit check . Consumers who do not have the minimum acceptable credit required by the lender are unlikely to be approved for mortgage refinancing.

Minimum credit ratings may vary according to lender and mortgage product. In the event that you do not qualify for a credit rating based on the required minimum credit rating, a lender may or may not introduce you to a credit counseling service or credit improvement company who may or may not be able to assist you with improving your credit for a fee.

Copyright © Mortgage.info is not a government agency or a lender. Not affiliated with HUD, FHA, VA, FNMA or GNMA. We work hard to match you with local lenders for the mortgage you inquire about. This is not an offer to lend and we are not affiliated with your current mortgage servicer.

Contact Us | Terms of Use | Privacy Policy

Buy Mortgage Leads

Mortgage.info

NMLS ID #1237615 | AZMB #0928735

8123 South Interport Blvd. Suite A, Englewood, CO 80112

CLICK TO SEE TODAY'S RATES

Contact Us