Are you losing business when customers don't qualify for your home's final sales price - despite having a good credit history and steady income? Turn those losses into wins with Countrywide's SmartStepSM buydown product.
SmartStepSM can limit your home-price reductions and increase homebuyer purchasing power. It allows you to buy down your customers' rates to help them qualify for more home than they may otherwise be approved for.
How It Works
As an example of how SmartStep can help, consider that a 2/1 buydown on a 30-year fixed mortgage could give the average borrower approximately 20 percent more buying power and cost you approximately 2.45 points of the loan amount.
Example:
$400,000 on a 30-year, 80/10/10 fixed mortgage at 6.75%
Year/Rate
Monthly Payment
Buyer Pays/Month
Builder Pays/Month
Buyer Pays/Year
Year 1 / 4.75%
$2,595
$2,087
$508
$6,096
Year 2 / 5.75%
$2,595
$2,335
$260
$3,120
Years 3-30 / 6.75%
$2,595
$2,595
$0
$0
Total Builder Pays $9,216
The Upshot
The buyer may qualify for a $500,000 home and to help them do so, you pay $9,216 (a mere 1.84% price reduction). That may be a better approach than simply reducing your upfront sale price. The SmartStepSM program is available on 30-year fixed mortgages and intermediate fully amortized ARMs with 3/2/1, 2/2/1 and 1/1/1 buydown options.
To find out more about how this powerful tool could help you increase your capture rate, call me today.
Are you losing business when customers don't qualify for your home's final sales price - despite having a good credit history and steady income? Turn those losses into wins with Countrywide's SmartStepSM buydown product.