Purchasing a home is one of the most significant investments you’ll make, and understanding the options available to you can make this process more affordable and stress-free. Our Save Your Way program offers four unique ways to save when buying a home from Kerley Family Homes. Here’s how each option works and how it can benefit you:
1. Discounted Upgrades and Value
This option is straightforward and immediately increases the value of your new home (built-in equity at closing). For many people who are not in need of assistance for financing, this is an excellent opportunity to make your new home stand out from the pack, and to add your own flare to your new home’s design.
2. Permanent Buydown on Interest Rate
A permanent buydown involves paying an upfront fee to reduce your mortgage interest rate for the life of the loan. This results in lower payments as well as significant savings over time. Let’s illustrate this with an example:
- Home Price: $450,000
- Loan Term: 30 years
- Original Rate: 7% ( for illustration only, APR will vary with home selected)
- Buydown Rate: 5.75%
At 7%, your monthly mortgage payment (principal and interest) would be approximately $2,994 over 30 years. At a reduced rate of 5.75%, the monthly payment drops to around $2,625. This results in a monthly saving of $369, and over the life of the loan, you could save nearly $132,840 in interest!
This also reduces your qualifying income by almost $1,000 per month or $12,000 a year in gross income. Someone making $60,000 a year in gross income can now qualify for as much home as someone making $72,000 with programs like this!
3. 2-1 Buydown
A 2-1 buydown temporarily reduces your interest rate for the first two years before it reverts to the original rate. Here’s how it works for a $450,000 home:
- First Year Rate: 4.75%
- Second Year Rate: 5.75%
- Third Year and Beyond: 6.75%
In the first year, your monthly payment would be approximately $2,348 at 4.75%. In the second year, it would be about $2,625 at 5.75%. From the third year onward, it would be $2,918 at the original rate of 6.75%.
Here are the detailed calculations for each year:
- First Year (4.75%):
- Monthly Payment: $2,348
- Annual Payment: $28,176
- Second Year (5.75%):
- Monthly Payment: $2,625
- Annual Payment: $31,500
- Third Year and Beyond (6.75%):
- Monthly Payment: $2,918
- Annual Payment: $35,016
By opting for the 2-1 buydown, you save significantly in the first two years, easing the transition into homeownership while you adjust to the new financial responsibilities.
See Map of New Homes in Atlanta
4. Down Payment Assistance Grant Program
For those who have a steady history of paying rent on time but struggle to save for a traditional down payment, the down payment assistance grant program can be a game-changer. This program provides financial assistance to cover a portion of the down payment, making it easier for first-time buyers or those with limited savings to purchase a home. Eligibility often depends on the community and specific homes being offered, but it can significantly lower the initial financial barrier to homeownership.
These options provided by the Save Your Way program can make owning a new home more accessible and affordable. Whether through direct discounts, interest rate buydowns, or downpayment assistance, Kerley Family Homes aims to provide flexible solutions to meet your financial needs. If you have any questions or need further assistance, feel free to contact us for personalized advice and support
