Mr. Cooper took over my mortgage, and they’ve been sending a bunch of offers. Today I saw one where they’re willing to drop the rate by 1% for a year. I read the fine print, and it seems pretty straightforward. Has anyone tried this program? We’re casually looking for another house, so it caught my eye.
>Mr. Cooper’s Mortgage Markdown is a temporary buydown program that lowers the borrower’s interest rate and monthly payment for a year by setting up a custodial escrow account, which is funded by both the lender and borrower (for VA loans, it’s fully funded by the lender), and those funds are used to subsidize the monthly payments for the one-year period.
Temporary buydowns can be tricky. Make sure you fully understand the terms. That 1% reduction only lasts for a year, then the rate goes back up. It can be useful if you’re planning to refinance or sell within that year. Otherwise, you could face payment shock when it resets.
Did you notice where it says funded by the borrower? That’s basically you paying some of that money upfront, which is why they’re lowering the rate temporarily.
Kelley said:
Did you notice where it says funded by the borrower? That’s basically you paying some of that money upfront, which is why they’re lowering the rate temporarily.
Yeah, I saw that it’s partially funded by both the lender and the borrower.
Uma said:
Do the refinance costs make it worth it in the end?
That’s exactly why I’m asking if anyone has actually used Mr. Cooper for financing. They took over my mortgage, but I don’t know anyone who originally financed with them.