Seller Contribution Comparison
Price reduction or seller-paid buydown?
The same seller dollars can work two ways. A temporary buydown gives more payment relief early. A price reduction gives a smaller loan and smaller savings that last. You supply the hypothetical assumptions; this calculator does not advertise or quote currently available loan terms.
Compare your options
Compare estimated payments for a seller-paid temporary buydown with an equal price reduction.
Estimated monthly principal & interest
| Payment period | 2-1 buydown | Price reduction |
|---|
Compare purchase details
| Detail | 2-1 buydown | Price reduction |
|---|
The interest rate is the loan's contract rate and never changes. During a buydown, early payments are figured at a lower effective rate, and seller funds cover the difference. The price reduction option uses the same down payment percentage, so the dollar down payment is lower.
Compare over time
Cash saved and mortgage balance measure different things, so they are shown separately and are not added together.
Cash saved so far
Payment savings plus cash saved at closing.
Mortgage balance remaining
The amount still owed on each loan.
Cumulative cash savings
Includes payment savings and applicable cash saved at closing. It does not include the remaining mortgage balance.
Cash saved by year
| By the end of | 2-1 buydown | Price reduction |
|---|
Tips for buyers, sellers, and agents
Compare the options for your purchase
An Embrace loan officer can help you review payments, seller contributions, and available buydown options.
About this calculator
For illustration only. Not an advertisement of currently available credit terms, a loan offer, a Loan Estimate, or a commitment to lend. All price, interest-rate, down-payment, and contribution figures are hypothetical assumptions supplied by the user. APR is not shown or calculated because this calculator does not collect finance charges. Payments shown are principal and interest only. They exclude taxes, homeowners insurance, mortgage insurance, HOA dues, and any financed FHA upfront mortgage insurance premium or VA funding fee. Your actual total payment obligation will be greater when applicable taxes, insurance, mortgage insurance, fees, and assessments are included.
With a temporary buydown, the mortgage interest rate and required full payment do not change. Funds held under a buydown agreement subsidize part of the borrower's payment for a limited period. Borrowers generally qualify using the full payment at the interest rate. Eligibility, qualifying treatment, escrow requirements, contribution limits, disposition of unused funds, and available structures vary by program, occupancy, property value, transaction, and lender.
Seller contribution limits shown are screening estimates only. Conventional limits shown assume an eligible Fannie Mae-style transaction and are also limited by actual allowable costs; investment-property treatment differs. The VA 4% screen uses purchase price as a proxy, but the applicable VA rule is based on reasonable value and excludes certain ordinary costs. Cash savings do not account for the time value of money, property tax differences, tax consequences, or transaction-specific fees.
Embrace Home Loans, Inc. | NMLS #2184
25 Enterprise Center, Middletown, RI 02842 | 800.333.3004
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Licensing and product availability vary by state. State-specific, branch, and individual loan-originator disclosures may also apply. Final legal and compliance approval is required before use as lending advertising.
