If you’re buying a home in Tampa Bay, how would an adjustable-rate mortgage or temporary buydown change what you pay each month? I started thinking about this after reading a Homes.com article on both options. It’s easy to get caught up in the terminology when what you really want to know is, “What would I pay when I move in, and what could I pay a few years from now?” Homes.com
With an adjustable-rate mortgage, or ARM, your interest rate can be fixed for the first several years. After that, it can go up or down within the limits of your loan. If you’re considering one, ask your lender, “What’s the most I could pay each month after the first adjustment?” Seeing that number in dollars makes it easier to picture what it would mean for your budget. Consumer Financial Protection Bureau
With a 2-1 temporary buydown on a fixed-rate loan, you pay as if your rate were 2 percentage points lower in year one and 1 point lower in year two. Full principal and interest payments begin in year three. I’d ask who’s funding the buydown and what that full payment will look like. Fannie Mae
When you’re ready to compare, ask a lender to run the numbers alongside a standard fixed-rate loan using the same home price and down payment. Here in Tampa Bay, I’d also want to see estimated property taxes, homeowners insurance, flood insurance where applicable, and any HOA or condo dues. If you’re downsizing or planning a move before retirement, look at how the payment would fit the budget you expect to have then, too.
If you don’t have a lender yet, we can start with a conversation about the move you’re considering and what you’d feel comfortable spending each month. I can introduce you to a lender who’ll explain your options in plain English and show you what the payments could look like. Then we can use those numbers to narrow down which homes make sense for you.
Thinking about a move in Tampa Bay? Call or text me at 317.373.3741. It’s fine if you’re still figuring out where to start.
Angi Trapp, REALTOR® | eXp Realty