“No funds get lost on that versus if you do a permanent rate buydown from a seller through seller concessions. Then if you refinance, those funds are gone,” she said. “So there’s just different tools that we can use.”
The decision between the two comes down to timelines and market expectations. Eddy said she typically walks clients through a straightforward calculation: divide the total cost of the buydown by the monthly savings it generates to arrive at the breakeven point in months.
If that figure runs to 24 or 36 months or beyond, the math may not support it. Buyers who understand how to use rate buydowns and seller concessions effectively are better placed, she said, than those taking their cues from headlines about mortgage rates alone.
FHA loans, meanwhile, are a product worth revisiting, Eddy said – both for buyers and for the realtors she works alongside.
“I’m letting my realtors know: don’t be afraid of an FHA loan, because we were not seeing the rates in FHA going up as much as we were with the traditional conventional loans,” she said. “So those could be a better opportunity and a better option for buyers currently.”
