Although Mortgage Interest Rate Buydown programs for home loan financing is nothing new, it has not been widely spoken about for several years as the housing market went bonkers during the pandemic. As interest rates have steadily increased, and the Fed continues to raise interest rates in an effort to cool inflation, in conjunction with the higher listing price of homes for sale, the prospect of financing a home under these conditions may seem infeasible for some and unwise to others. These factors weigh all the more for those who are in the position of trying purchase out of necessity, such as those moving for work. But the market shift toward a Buyer's Market means more negotiating power when making an offer.
So to start, what exactly is an interest rate buydown?