News posted On October 31, 2018
San Ramon, CA – CMG Financial, a privately-held, well-capitalized mortgage banking firm headquartered in San Ramon, CA, announced its new 3-2-1 Buydown Loan that allows consumers to secure a lower interest rate and lower the monthly mortgage payment during their first three years of homeownership. The home buyer earns these lower payments through a “buydown fee” that can be paid by an interested third party like a home builder, seller, or Realtor, or by the home buyer.
Using the 3-2-1 Buydown Loan, an interested third party has the option to pay for some or all of an upfront “buydown fee.” The loan is available with a 3-year, 2-year, or 1-year option. In the 3-2-1 scenario, for the first year, the monthly payment will be based off an interest rate 3 percentage points below the initial rate, the second year, the monthly payment will be based off an interest rate 2 percentage points lower than the initial rate, and for the third year, the monthly payment will be based off an interest rate 1 percentage point lower than the initial rate. In the fourth year, the monthly payment will be based off of the fixed-rate with which the home was financed for the duration of the mortgage loan.
With interest rates expected to continue rising, prospective home buyers who are on the fence, may be more inclined to make a purchase now rather than wait another few years. With the 3-2-1 Buydown Loan, home buyers have the opportunity to lock in an interest rate now and then ease into their mortgage payment during their first few years of homeownership.
New home builders have also taken interest in the 3-2-1 Buydown Loan. Instead of offering aesthetic home upgrades subject to home buyer taste and preference, builders have the option to pay the buydown fee for a home buyer. The 3-2-1 Buydown Loan allows builders to expand their reach and gain a competitive edge over other builders in their market. In crowded markets, sellers can stand out by offering to pay some or all of the buydown fee as a “seller concession.”
No stranger to innovative lending solutions, CMG Financial is also the home to proprietary mortgage products the All In One Loan and HomeFundIt. The All In One Loan combines banking and mortgage financing to allow homeowners to apply payments to principal balance first, lowering the lifetime cost of mortgage interest, and paying off their mortgage faster. HomeFundIt is the first and only crowdfunding platform designed specifically for the down payment on a home. In an evolving industry, CMG Financial leads the way in new product development and has continued to serve home buyers for 25 years.
The 3-2-1 Buydown product is available for home purchase only, with fixed-rate, conventional, conforming loans. Requirements and eligibility varies based on Fannie Mae and Freddie Mac regulations. To learn more about the 3-2-1 Buydown Loan, please consult a CMG Financial loan officer.
About CMG Financial
CMG Financial is a well-capitalized, privately held mortgage-banking firm founded in 1993. The company makes its Loans and services available to the market through three distinct origination channels including Retail Lending, Wholesale Lending, and Correspondent Lending.
CMG Financial currently operates in all states, including District of Columbia, and holds federal agency lending approvals with HUD, VA, RHS, GNMA, FNMA and FHLMC. Throughout the mortgage banking and housing markets, CMG Financial is widely known for responsible lending practices, industry and consumer advocacy, Loan innovation, and operational efficiency.