Quote:
Originally posted by DrewKole
I'm not talking about a TEMPORARY related 3/2/1 buydown.
|
When you say the word BUYDOWN, yes, you are talking about the above. I have never explained to anyone I've trained nor have I ever had any one explain to me, nor heard it explained as you just did, that a DISCOUNT POINT is BUYING DOWN THE RATE. But yet again, scemantics. I started in this business long before there were discount points to be added into the equation. To me, and to most people in the business, except for you I guess, you pay DISCOUNT POINTS for a lower rate, and you get a REBATE if you choose a higher rate. A BUYDOWN is a temporary fix to assist in qualifying.
I'm not sure where you got that quote from... it's not a bad way of explaining things to a first time homebuyer or a layman I guess. But people in the mortgage industry DON'T use that term.
By the way... The calculations in your quote are not quite on the money and is not necessarily the standard. Our rate was 6% at par. We paid .625% in DISCOUNT POINTS to get a 5.25% rate.