3%, 2%, 1% Purchase Loans
3… 2.. 1.. Liftoff! – Rates are on the rise, but owning is definitely better than renting. So what can you do to take the edge off? Some lenders have 2%, 1% programs. I Love My Lender has 3%, 2%, 1% plans.
If, for instance, you refinance at a 6% rate, your first year you would pay 3%, year 2 you would pay 4%, year 3 it would raise to 5%. On the 4th year it would move to the original 6% rate, but most financiers feel that in the next 12 to 24 months the Federal Reserve will begin reduce rates. This would give you the chance to refinance at a lower rate.
It allows you to own at a much lower start rate, build equity, and take the tax advantages now while rates are high. When they drop in the future, refinance and save even more.