Buydown Super Confused!

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  • #62961
    firmeh89
    Member

    @ttrumble

    So I have been getting wrong information for day 1 it seems, I’m not sure at this final point who is mistaken,

    So I am a priority Member looking to buy in Nassau County, NY with my income calculations going above 80% after going back and forth with naca and listening to webinars and asking questions I was told the maximum I can buy down my interest rate is 5 points (1.25%) and the seller could contribute upto 10%. So with that information I began to look for houses, I finally found the house I liked made an offer which included a concession which would help me buy down the rate an additional 0.5% on top of the 1.25% I was buying it down, so total buy down would be 1.75%. Now at Credit Access point I was told the maximum is 5 points (1.25%) total. So is this correct??

    #62963
    Nelsont
    Member

    From @ttrumble last week:

    2 – An income of 80% of the median qualifies you for the Bank of America grant, which is presently a 0.5% rate reduction. You may contribute up to five points total toward buydown, which includes contributions by the seller.

    This means you can potentially get a 30-year loan to as low as 1.625% and a 15-year loan all the way down to the lowest rate possible of 0.125%.

    #62975
    TTrumble
    Member

    Hello firmeh89,

    When the Bank of America Matching Grants program ran out of funds at the end of August, four months earlier than expected, it created quite a bit of confusion. At first, BOA replaced it with a 1% rate reduction for those with incomes below 80% of the median, then reduced that to 0.5%.

    So for now, the grant total of points you may buy down is five points, which equals 1.25% reduction on the 30-year and 2.5% on the 15-year. Plus you get the extra 0.5% reduction from BOA if your income level qualifies.

    Tim Trumble
    Online Operations, NACA
    ttrumble@naca.com

    #62979

    Is there any word yet regarding what happens with grants come January 1? Or a solid answer on when in the process your grants are “locked” in case something more (or less) favorable happens? We started under the original grants in the spring, and now have it changed twice – and likely a third time – has been a rollercoaster. I didn’t realize there was a limit of 5 points from both sides when using the 0.5% BOA grant, so that’s good to know as well.

    #62981
    Nelsont
    Member

    Nothing is locked until you have a ratified contract.

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