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2 comments
no one is going to do that for 4%
They will if you pay them to do it upfront.
In other words; for a $400k home, the difference in interest between a 4% loan and a 5% loan over 30 years is worth maybe $20k in today's dollars (just a guesstimate, I haven't done the actual math).
So all the builder needs to do to make this magic happen is markup the sales price of his $400k home by 5% and use the additional cash to buy the rate down.
Basically, it's just marketing BS made possible by the time value of money.
They will if you pay them to do it upfront.
In other words; for a $400k home, the difference in interest between a 4% loan and a 5% loan over 30 years is worth maybe $20k in today's dollars (just a guesstimate, I haven't done the actual math).
So all the builder needs to do to make this magic happen is markup the sales price of his $400k home by 5% and use the additional cash to buy the rate down.
Basically, it's just marketing BS made possible by the time value of money.
It may be originating mortgages. It may even be underwriting them. But it's not funding them. Someone still has to front the cash, and no one is going to do that for 4%.