Temporary Rate Buy Downs. Are They Worth It?
Temporary rate buy downs are popular for homebuyers aiming to lower their interest rate for the initial years, expecting future rate decreases and a chance to refinance. By paying a lump sum upfront, such as $6,000, and reducing monthly payments by $250, it takes around two years to break even. If you plan to keep the loan for at least two years, it's a sensible decision; otherwise, it may not be advantageous.