New G-Rate program allows sellers to permanently buy down their buyer’s mortgage rate

Key Takeaways:

– Guaranteed Rate has introduced a new feature called “RateReduce Sell” that allows sellers to pay a fee to lock in a permanently discounted mortgage rate for a buyer.
– RateReduce Sell is an enhancement to the existing RateReduce buydown program, but instead of temporarily buying lower mortgage rates, sellers can now buy down points permanently.
– The final mortgage rate will vary for each borrower based on factors such as occupancy, downpayment, and credit score.
– The program is available for borrowers seeking conventional loans as well as high balance mortgages.
– The seller can secure a discounted rate for as low as $995 to market the listing and increase the likelihood of selling the property.
– The loan officer is not compensated until the transaction is closed.
– Guaranteed Rate’s RateReduce Sell program comes at a time of a volatile mortgage market.
– Economists and analysts expect the mortgage landscape to improve in 2024, and mortgage lenders are making enhancements to increase affordability for buyers.

HousingWire:

Guaranteed Rate has introduced a new feature that allows sellers working with a G-Rate loan officer to pay a fee that locks in a permanently discounted mortgage rate for a buyer.

Known as “RateReduce Sell,” it’s a major enhancement to the existing RateReduce buydown program, in which sellers have paid to temporarily buy lower mortgage rates, typically a 2-1 buydown, for buyers.

But with RateReduce Sell, sellers will be able secure a lower rate by buying down points permanently. The final mortgage rate, however, will ultimately be different for every borrower’s situation.

“Rates will depend on each borrowers scenario considering details like occupancy, downpayment and borrower credit score,” said Kate Amor, SVP and head of enterprise products at Guaranteed Rate.

For as low as $995 the seller can secure a discounted rate to market the listing, according to Guaranteed Rate.

The program is available for borrowers seeking a conventional loan as well as a high balance mortgage that exceeds the conforming loan limits established by the Federal Housing Finance Agency (FHFA).

“The real estate agent works with the seller and a Guaranteed Rate loan officer to pay a fee and lock in the discounted rate for a buyer. This unique benefit allows the listing and marketing of the home to stand out compared to the competition, giving the property a higher likelihood of selling,” G-rate said. 

The loan officer is not compensated until the transaction is closed.

Guaranteed Rate’s RateReduce Sell program comes amid a still-volatile mortgage market. 

The 30-year fixed mortgage rate at HousingWire’s Rates Center sits at 6.66% after going through a roller coaster ride in 2023. Rates surged to 7% in March and 8% in October after starting 2023 in the low 6% levels.

“We want to offer real estate agents and their clients the opportunity to lock in a rate that they can market to their potential buyers. In an environment where rates can be volatile, this is a key selling point for a future buyer,” said Jeremy Collett, Guaranteed Rate’s EVP, head of capital markets, in a statement. “One of the biggest hurdles impacting sellers and buyers is high interest rates.”

Economists and analysts expect the mortgage landscape to improve in 2024 compared to last year, but mortgage lenders still recognize the need to increase affordability among buyers and have been making enhancements to existing mortgage products.

Most recently, Rocket Pro TPO – the wholesale arm of Rocket Mortgageexpanded its ONE+ program to include Freddie Mac‘s loan product advisor (LPA), which the lender expects will provide a 16% increase in client eligibility.

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