Our Chat with Mark Roberts, VP of Mortgage Lending with Guaranteed Rate
By: Carolyn Luck, Broker, Realtor®
At Sawyer Realty, our goal is to educate our clients throughout every step of the home buying and selling process. In this market, there have been many changes that have left us with the need to reassess listing strategies and buyer offers regularly.
When we met Mark for coffee, he was a wealth of information and we walked away feeling positive about the state of the real estate market as it pertains to mortgage rates and lending. We at Sawyer Realty are always in search of the best financial guidance to share with our buyers and sellers. Many consumers are feeling a great deal of uncertainty around the idea of buying or selling a home in the current market.
Mark shared some great tips to put our minds at ease, which we were able to bring back to our clients. One of the most notable pieces of information was the 2/1 Rate Buydown Seller Concession. Yes, we said Seller Concession – a sign of the times that the market has shifted slightly, giving buyers a bit more negotiating power than what we’ve seen in recent years.
Essentially, the 2/1 Rate Buydown is a financing option that allows the buyer to take advantage of a lower interest rate during the first two years of the loan, as a result of extra costs paid at closing. Typically, the rate is 2 percentage points lower during the first year, and 1 percentage point lower during the second year. During the third year, the rate rises to the regular, permanent rate. At that time, some buyers may opt to refinance, depending on where the current rates are.
The interesting point worth noting is that some sellers are opting to offer the 2/1 Rate Buydown as a seller concession. This means the buyer can take advantage of the lower rate in the first few years of the loan without the upfront cost. Have you heard of typical concessions in the form of seller-paid closing costs, flooring and paint allowances? The 2/1 Rate Buydown is a newer strategy that sellers are using to attract buyers and close deals.
Mark is a wealth of knowledge where the mortgage industry is concerned. We were so grateful for his time, and the coffee was a nice treat, too. We are looking forward to bringing the dream of home ownership to our clients while partnering with Mark Roberts, VP of Lending with Guaranteed Rate.