Can somebody please give me an example of a naca buy down? Im Just trying to understand how much money I need to buy down. 1000?5000? I never had a mortgage so if any one can please help me understand the mathematics please.
The interest rate is reduced by 1/6 of a point for every percent of the purchase price. In other words, for every point of interest rate reduction, you have to put down 6% of the purchas price. That may sound like a lot, but a simple mortgage calculator will show youx for example, putting 6,000 on a 100,000 house will save you 17,640 over the life of the loan.
Rate Mon. Payment Total over life of loan
2.25 382 137,520
1.25 333 119,880
So it’s better if you are planning on keeping the loan for a long time.