FAQs
Will my payment increase with my buydown loan?
Yes, your out-of-pocket monthly payment will increase, but this is a planned, gradual adjustment that was built into your original loan agreement.
Here is exactly how your buydown payment schedule works:
- The initial subsidy: A temporary buydown uses a dedicated reserve fund (paid for at closing) to cover a portion of your monthly principal and interest payments for the first 1 to 3 years of your loan.
- The annual adjustments: Each year during this temporary period, the amount of the reserve subsidy decreases. As the subsidy shrinks, your out-of-pocket portion of the monthly payment will step up accordingly.
- The final permanent payment: Once the buydown period ends and the reserve funds are completely used up, you will become responsible for the full mortgage payment.
An important reminder:
When your payment increases to its final amount, it is not a surprise rate hike! Your payment is simply returning to the standard, permanent interest rate that you locked in and qualified for when you first closed on your home.
If you are approaching an adjustment period and would like to know the exact dollar amount of your next payment step-up, please contact us so our team can review your specific buydown schedule with you.