Christee Payment Subsidy Quick Start

A Payment Subsidy is also known as a Payment Buydown. Christee automatically calculates three popular Buydown options. These options include a 3-2-1, a 2-1 and a one year program. 

A Payment Subsidy does not increase you qualifications to purchase a higher price home.

In a  3-2-1 Buydown, the first year payment is based upon a rate which is 3% below the current interest rate. The second-year payment will be 2% below the fix rate and the third year payment will be 1% the current rate. 

In the 2-1 Buydown, the first-year payment will be based upon an interest rate 2% below the fix rate. The second-year payment will be based upon a rate 1% below the fixed mortgage rate.

A one-year Buydown allows for a payment reduction for one-year 1% below the normal payment.

A predetermined amount is deposited with the lender at time of closing. For the buydown period (either 1,2 or 3 years), monies will be withdrawn to subsidize the monthly payment. The borrower pays a lower monthly payment; however, the Lender receives full payment. 

Christee Modules with Payment Subsidy Option

In both the ‘Buyer PreQual’ and ‘Buyer Choice’ module, you may select ‘Payment Subsidy’ as an optional input. The results will be based upon a 2-1 payment subsidy. By turning this input ‘on’ or ‘off’ allows the user to see the potential impact of a payment subsidy.

There are Only 3 Required Inputs for the Christee Subsidy Module

  • 1. Interest Rate. Enter fixed interest rate on the mortgage.
  • 2. Loan Amount. Enter the loan amount.
  • 3. Mortgage Term. Select loan term form dropdown menu.
  • There is Only 1 Optional Input. NOT required for Christee results.
  • Email Address. By entering a valid email address, you have the option to have the PDF report emailed to yourself or another person.

    Tip. If this field is blank then, you may download the PDF report

    Tip. Make sure you hit the ‘submit’ button after entering an email address

Example for Payment Subsidy

  • 1. Interest Rate: 6% – This is the 30-year fix rate.
  • 2. Loan Amount: $250,000
  • 3. Mortgage Term: 30 years

Results and Explanation

  • 1. A $250,000 loan will require a monthly Principal & Interest payment of $1,498.88.

    Tip. This is shown as the payment required years 3-30. In other words, this is what the required principal and interest payment will be after the payment subsidy period of 2 years.

  • 2. First-Year Payment based upon 2-1 buydown

    The first-year payment will be based upon 4%, or 2% below the fix rate of 6%.

    The first-year payment will be $1,193.54 or $305.34 below the required payment (see #1).

    $3,664.08 (12*305.34) will be deposited with Lender to offset the first-year payment reduction.

  • 3. Second-year payment based upon a 2-1 buydown

    The second-year payment will be based upon 5%, or 1% below fix rate of 6%.

    The second-year payment will be $1,342.05, or $156.83 below the required payment (see#1).

    $1,881.96 (12*156.83) will be deposited with Lender.

  • 4. Total Cost of Buydown is $5,546.04, or 2.22% of $250,000 Loan

    This is the amount that will be deposited with Lender at time of closing. This amount may be paid by the seller. Currently, this program is only available with VA or FHA loans. This program may allow a buyer to qualify for a higher price home.

We hope you enjoy your AskChristee experience!

Results will be displayed in your browser. Additional detail is available in the PDF file. Please review results with a recommended AskChristee Agent and Lender.

See the Resources tab for more Information. Visit Video tab for demonstration and greater insight.