New temporary buydown option eases the transition into homeownership with Rocket Mortgage covering the cost of a lower interest rate for two years
DETROIT, August 26, 2024 – 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.
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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.
