New temporary buydown option eases the
transition into homeownership with Rocket Mortgage covering the
cost of a lower interest rate for two years
DETROIT, Aug. 26,
2024 /PRNewswire/ -- Rocket Mortgage, the nation's
largest mortgage lender and a part of Rocket Companies (NYSE: RKT),
today introduced "Welcome Home RateBreak," a lender-paid 2-1
temporary buydown program. Buyers can enjoy significant savings
with a mortgage rate reduced by two percentage points in the first
year, then one percentage point in the second year before returning
to the note rate in the third year and until the mortgage is paid
off.
"Welcome Home RateBreak" is available to homebuyers who apply
directly to Rocket Mortgage, or buyers working with a mortgage
broker who is partnered with Rocket Pro TPO. Homebuyers are
eligible if they are purchasing a single-family home and have
income equal to or less than 80% of their area median income (AMI).
Rocket Mortgage estimates that more than 90 million people can
benefit from this program.
"Rocket is committed to creating and delivering unique programs
that address the challenges homebuyers face today," said
Bill Banfield, Chief Business
Officer and Economist. "Many buyers fear being stretched too thin
during the early years of homeownership, especially as they
consider the cost of new furnishings and special touches to make
the new home their own. By lowering the interest rate for the first
two years, "Welcome Home RateBreak" provides financial breathing
room, giving consumers the confidence to enter the market and make
their homeownership dreams a reality."
This offering is particularly beneficial for first-time
homebuyers, who made up a mere 29% of home sales in June
– down from 50% in 2010, according the National
Association of Realtors. This pullback demonstrates the urgent
need for programming and support to help get new buyers off
the sidelines.
As an example, a homebuyer with a $250,000 loan at a 6.99% rate (APR 7.399%) would
typically pay $1,661 per month. With
"Welcome Home RateBreak," their first-year rate would be 4.99%,
reducing the payment to $1,340. In
the second year, the rate would be 5.99%, with payments of
$1,497. After that, the payments
return to the 6.99% rate for the remainder of the loan. This
results in over $5,800 in savings
during the first two years.
The lower rate is accomplished through a special escrow account
established and fully funded by Rocket Mortgage. During the first
24 months of the loan, the homeowner will make the reduced monthly
mortgage payment and Rocket Mortgage will cover the difference
automatically. The homebuyer would be responsible for taxes and
insurance premiums.
This latest initiative from Rocket Mortgage is part of a broader
effort to enhance affordability and provide a simpler path to
homeownership. Other programs include ONE+ which focuses on
reducing upfront costs by allowing clients to make a down payment
of just 1% of the purchase price, with Rocket Mortgage covering the
remaining 2% needed to meet the conventional loan threshold.
Visit RocketMortgage.com to learn more about "Welcome Home
RateBreak" and to apply for a home loan. Mortgage brokers can speak
to an account executive to learn about the program.
ABOUT ROCKET MORTGAGE
Detroit-based Rocket Mortgage is the largest
mortgage lender and is a part of Rocket Companies (NYSE: RKT).
The lender enables the American Dream of homeownership and
financial freedom through its obsession with an industry-leading,
digital-driven client experience. In late 2015, it introduced the
first fully digital, completely online mortgage experience. Since
its founding in 1985, Rocket Mortgage has closed more than
$1.8 trillion of mortgage volume
across all 50 states.
J.D. Power has ranked Rocket Mortgage #1 in client satisfaction
for both primary mortgage origination and servicing 22 times – the
most of any mortgage lender. Rocket Companies, Rocket Mortgage's
parent company, has placed in the top third of Fortune's list of
the "100 Best Companies to Work For" the list for 21 consecutive
years.
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SOURCE Rocket Mortgage