The full explanation
On loans Fannie Mae buys, there must be a written agreement with whoever provides the money, and the lender qualifies you at the full note rate, not the reduced rate. If that money were not available, you would still owe the payments set by the note.
An example
The seller offers to pay for a temporary buydown for Julio and Ana. They check what their payment will be once the buydown ends, because that is the payment they will have to live with.
You will see it in…
- Seller offers in the purchase contract
- The buydown agreement you sign
- Your statement, when the payment goes up as the buydown ends
