If you are buying a home in Virginia, Florida, Tennessee, or Georgia and your rate lock happens on or before June 30, 2026, there is a lender-funded offer on the table that could put real money back in your pocket every month for the first year of your mortgage. Not a teaser. Not a gimmick. A structured, federally compliant temporary buydown funded by the lender at no out-of-pocket cost to you.
The offer is a 1-0 temporary buydown. It reduces your effective interest rate by 1% below your note rate for the first 12 months of your loan. On a $450,000 mortgage, that difference can add up to meaningful monthly savings before your payment adjusts to the full note rate in Year 2.
But the deadline is real. The loan must be locked on or before June 30, 2026. That window is closing. If you are in the early stages of your home search, or you have a purchase contract in hand and have not yet locked a rate, this guide walks you through every step: how the math works, whether you qualify, how to compare this offer against what other lenders are providing, and how to start a pre-qualification today without a single point of impact to your credit score.
This is an educational guide. Every number shown is worked in full. Every comparison is honest. The goal is to help you make a well-informed decision, not to sell you on anything.
Let’s get into it.
Step 1: Understand Exactly How a 1-0 Temporary Buydown Works
Before you claim any offer, you need to understand what it actually is. A temporary buydown and a permanent buydown are fundamentally different instruments, and confusing them leads to poor decisions.
Permanent Buydown: You pay discount points upfront at closing to permanently reduce your interest rate for the life of the loan. You own that lower rate forever, but you pay for it out of pocket at closing.
Temporary Buydown: The interest rate on your note does not change. Instead, a subsidy fund is established at closing that makes up the difference between your note rate payment and your reduced payment for a defined period. In a 1-0 structure, the effective rate is reduced by 1% for Year 1 only, then returns to the full note rate for the remaining term.
The critical distinction: your note rate is set at origination and does not move. A temporary buydown is also not an adjustable-rate mortgage (ARM). Your rate does not float with an index. It is a fixed-rate loan with a subsidized first year. After Month 12, you simply pay the rate you qualified for from Day 1.
Who Funds the Buydown?
In most purchase transactions, a temporary buydown is funded by the seller or the builder as a concession. Under Grand Rates’ current offer, the buydown is lender-funded. That means the borrower does not contribute the subsidy funds at closing. The lender structures the buydown cost into the transaction.
The Full Worked Math
Assume a $400,000 loan at a 7.00% note rate on a 30-year fixed mortgage.
Monthly P&I at 7.00% note rate: $2,661
Monthly P&I at 6.00% buydown rate (Year 1): $2,398
Monthly savings in Year 1: $263
Total Year 1 savings: $263 × 12 = $3,156
Buydown cost funded by lender: $3,156
Starting in Month 13, the full $2,661 payment applies for the remaining 29 years of the loan term.
Rate and Payment Comparison Table
Note Rate | Buydown Rate (Year 1) | Monthly P&I at Note Rate | Monthly P&I at Buydown Rate | Monthly Savings | Total 12-Month Savings
7.00% | 6.00% | $2,661 | $2,398 | $263 | $3,156
7.25% | 6.25% | $2,728 | $2,463 | $265 | $3,180
7.50% | 6.50% | $2,797 | $2,528 | $269 | $3,228
Figures based on a $400,000 30-year fixed loan. Payment calculations are principal and interest only and do not include taxes, insurance, or HOA fees. Actual rate will depend on credit profile, loan program, and market conditions at time of lock.
One more thing to be clear about: a temporary buydown does not lower your purchase price, reduce your loan balance, or permanently change your rate. It is a cash-flow tool for Year 1. Use it accordingly. You can use a home loan calculator to model your exact monthly payment scenarios before you commit.
Step 2: Confirm You Qualify Before June 30
Not every transaction or loan program is eligible. Here is what you need to confirm before investing time in the process.
Core Eligibility Requirements
Transaction type: Purchase transactions only. This offer does not apply to refinances, cash-out refinances, or rate-and-term refinance transactions.
Rate lock deadline: The loan must be locked on or before June 30, 2026. An application alone does not qualify. The lock must be in place by the deadline.
Geographic eligibility: Virginia (including Richmond, Glen Allen, Short Pump, Chesterfield, Midlothian, Henrico, Hanover, Fredericksburg, Spotsylvania, Stafford, Prince William, Ashland, Lake Anna, Goochland, Louisa, Caroline County, Charlottesville, Albemarle, Williamsburg, Yorktown, Suffolk, Hampton Roads, Newport News, Chesapeake, Virginia Beach, Roanoke, and Lynchburg), plus Florida, Tennessee, and Georgia.
Loan Type Compatibility
Loan Type | Buydown Eligible | Notes
Conventional | Yes | Subject to Fannie Mae/Freddie Mac guidelines; lender-funded concession rules apply
FHA | Yes | Subject to FHA guidelines; seller/lender concession limits apply (see HUD.gov for current limits)
VA | Yes | Subject to VA guidelines; funding rules apply (see VA.gov for current guidelines)
USDA | Yes | Subject to USDA Rural Development guidelines; confirm with loan officer
Jumbo | Case by case | Eligibility depends on investor guidelines; confirm at application
Program guidelines are subject to change. Confirm current eligibility with your loan officer at time of application.
Qualifying at the Note Rate
This is a federal requirement, not a lender policy. Under standard underwriting guidelines, borrowers must qualify based on the full note rate, not the reduced buydown rate. Your debt-to-income ratio, income documentation, and loan approval are all evaluated at 7.00% (or whatever your note rate is), not at the 6.00% Year 1 effective rate. This protects you from being approved for a payment you cannot sustain after the buydown period ends.
NoTouch Credit Pre-Qualification
Grand Rates uses Vantage Score 4.0 with a soft pull during initial pre-qualification. That means no hard inquiry, no credit score impact, and no commitment required while you explore your eligibility. This is what Grand Rates calls its NoTouch Credit process.
If you are not yet certain whether you qualify, the correct action is to initiate a soft-pull pre-qualification now. You will have a clear picture of your eligibility before the June 30 deadline without any cost to your credit profile.
Step 3: Run Your Personal Breakeven and Savings Math
Taking a lender’s word for the savings is not enough. Running your own numbers takes about five minutes and gives you confidence in the decision. Here is the full framework.
The Breakeven Calculation Framework
Step A: Identify your loan amount and quoted note rate. These come from your pre-qualification or rate quote.
Step B: Calculate monthly P&I at the note rate. Use a standard mortgage amortization formula or an online calculator. The formula: M = P[r(1+r)^n] / [(1+r)^n – 1], where P = loan amount, r = monthly rate (annual rate ÷ 12), n = number of payments (360 for a 30-year loan).
Step C: Calculate monthly P&I at the buydown rate (note rate minus 1.00%). Same formula, same loan amount, rate reduced by 1%.
Step D: Monthly savings = Step B minus Step C.
Step E: Total Year 1 savings = Monthly savings × 12.
Step F: Buydown cost = Total Year 1 savings. This is the amount the lender funds into the subsidy account under this offer.
Step G: Breakeven. Because the borrower is not paying for the buydown under this lender-funded offer, the breakeven is immediate. Savings begin with your first payment. Day 1.
If you were in a scenario where you or the seller paid for the buydown, the breakeven would be: Total Buydown Cost ÷ Monthly Savings = Months to Break Even. That calculation matters when the buydown has a cost to you. Under this offer, it does not.
Worked Examples Across Three Virginia Markets
The following table covers three representative loan amounts that reflect different Virginia price tiers at a 7.00% note rate on a 30-year fixed loan.
Loan Amount | Note Rate | Buydown Rate (Year 1) | Monthly Savings | Total Year 1 Savings | Buydown Cost Funded by Lender
$300,000 | 7.00% | 6.00% | $197 | $2,364 | $2,364
$450,000 | 7.00% | 6.00% | $296 | $3,552 | $3,552
$600,000 | 7.00% | 6.00% | $395 | $4,740 | $4,740
Market context: The $300,000 range is representative of entry-level purchase activity in Fredericksburg, Spotsylvania, Lynchburg, and Roanoke. The $450,000 range reflects mid-range activity in Chesterfield, Henrico, Midlothian, and Glen Allen. The $600,000 range reflects higher-price markets including Charlottesville, Virginia Beach, and Short Pump. The 2026 conforming loan limit is $806,500 for most Virginia counties. All figures are P&I only and are illustrative. Actual payments depend on your specific rate, credit profile, and loan terms.
These numbers are not projections. They are arithmetic. Plug in your actual loan amount and your quoted rate, and you will have a precise picture of what this offer means for your household budget in Year 1. If you are also exploring down payment assistance strategies in Virginia, combining those programs with this buydown offer can significantly reduce your upfront and first-year costs.
Step 4: Compare Your Options — What Other Lenders Are Offering
You should get multiple quotes. The Consumer Financial Protection Bureau (CFPB) explicitly recommends shopping at least three to five lenders when financing a home purchase. You can review that guidance directly at CFPB.gov.
Virginia has a strong lender market. Companies like Rocket Mortgage, Movement Mortgage, PrimeLending, Alcova Mortgage, CapCenter, Fairway Independent Mortgage, CrossCountry Mortgage, Guild Mortgage, Atlantic Bay Mortgage, Southern Trust Mortgage, Prosperity Mortgage, and others all serve Virginia borrowers. Many of them are capable lenders with solid reputations. Working with an independent mortgage broker gives you access to multiple wholesale lenders simultaneously, which is a structural advantage when comparing rates and buydown offers. The question is not whether they are good. The question is what structural differences exist between them and what those differences mean for your specific transaction.
Questions to Ask Any Lender About a Buydown Offer
Who is actually funding the buydown? Lender-funded, seller-funded, and borrower-funded are three different structures with different cost implications for you at closing.
How many wholesale lenders do they access? A broker with access to hundreds of wholesale lenders can shop your file across multiple investors simultaneously. A single-lender retail shop presents one set of rates and programs.
Is the credit pull during pre-qualification a hard or soft inquiry? A hard pull affects your credit score. A soft pull does not. This matters especially if you are shopping multiple lenders.
What is their average time to close? On a time-sensitive transaction with a June 30 lock deadline, close time is not a minor detail.
Are they available outside of standard business hours? Purchase transactions move quickly. Rate locks, contract deadlines, and underwriting questions do not wait for Monday morning.
Side-by-Side Comparison
Feature | Grand Rates | Single-Lender Retail Lender
Lender access | Hundreds of wholesale lenders | Typically one lender’s product set
Credit pull during pre-qual | Soft pull / NoTouch (no credit impact) | Typically hard inquiry
Buydown funding source | Lender-funded under current offer | Varies by lender and transaction
Availability | 24/7 | Standard business hours
Rate shopping | Multiple investors compared simultaneously | Single investor rate
A note on rate shopping and your credit score: when multiple mortgage lenders pull your credit within a short window, typically 14 to 45 days depending on the scoring model, those inquiries are generally treated as a single inquiry for scoring purposes under most credit models. Shopping does not have to hurt your score if it is done within that window. Grand Rates’ soft-pull pre-qualification means the initial exploration carries no inquiry at all.
Step 5: Start Your No-Touch Pre-Qualification (No Credit Hit)
A soft-pull pre-qualification is exactly what it sounds like: you provide basic financial information, the lender reviews your credit profile using a soft inquiry, and you receive an initial eligibility assessment. Nothing is reported to the credit bureaus. Your score does not move.
Grand Rates uses Vantage Score 4.0 for this process. Vantage Score 4.0 is a more recent scoring model than the legacy FICO versions traditionally used in mortgage. It incorporates more data points, treats medical collections differently, and is generally more inclusive of borrowers with shorter credit histories or thinner files. It gives a more complete picture of creditworthiness for many borrowers.
What You Will Need for Pre-Qualification
Income documentation: Employment type (W-2, self-employed, retired), gross monthly income, and any secondary income sources.
Employment history: Two-year history is standard. Gaps or job changes are not disqualifying but need to be disclosed.
Assets: Estimated checking, savings, and investment account balances. These cover your down payment and reserves.
Debts: Monthly minimum payments on credit cards, auto loans, student loans, and other obligations. This drives your debt-to-income ratio.
Purchase parameters: Estimated purchase price range, desired down payment, and loan program preference if you have one.
What Pre-Qualification Tells You
You will receive an estimated loan amount, qualifying loan programs, an estimated rate range, and a clear answer on whether the lender-funded buydown offer applies to your scenario. What pre-qualification is not: it is not a loan approval, not a rate lock, and not a commitment to lend. It is your starting point. Review the full online mortgage prequalification process to understand exactly what to expect at each stage.
Timing matters here. Pre-qualification must be initiated with enough lead time to complete a full application, identify a property, and lock a rate before June 30, 2026. If you are in late May or early June, that window is narrow but workable if you move now.
You can start online or contact Duane Buziak directly. The Grand Rates team is available 24/7 for time-sensitive transactions. Visit the online mortgage pre-qualification page or the free mortgage pre-approval page to get started.
Step 6: Lock Your Rate and Secure the Buydown Before June 30
A rate lock is a lender’s written commitment to hold a specific interest rate for a defined period, typically 30, 45, or 60 days. During that window, your rate does not change regardless of what happens in the broader market. When the lock expires, you either close or you negotiate an extension, often at a cost.
For this offer, the critical requirement is clear: the loan must be locked on or before June 30, 2026. An application alone is not sufficient. A pre-qualification is not sufficient. The lock must be in place.
The Process from Pre-Qualification to Closing
1. Pre-qualification (soft pull, no credit impact) — establishes eligibility and loan program
2. Full application — triggers formal underwriting process; hard credit pull occurs at this stage
3. Property identification — purchase contract required before rate lock in most cases
4. Rate lock — lender commits to your rate; buydown is structured into the loan at this point
5. Underwriting — income, asset, and appraisal review
6. Closing — buydown subsidy account is funded; reduced Year 1 payments begin with first payment
Timeline Math for the June 30 Deadline
A typical purchase transaction requires 21 to 45 days from full application to closing. Working backward from June 30: if you are initiating pre-qualification in late May 2026, you have a realistic path to a June close if you move immediately. Alternatively, locking by June 30 for a July close may be permissible depending on program terms. Confirm the specific lock and close requirements with your loan officer at the time of application.
Do not assume you have more time than you do. The June 30 deadline is a lock deadline, not a closing deadline. But the lock requires an active application and, in most cases, an executed purchase contract. Understanding what a escrow account covers at closing will also help you prepare for the full cost picture before you sign.
What to Bring to Your Full Application
Income: Two years of W-2s, 30 days of recent pay stubs, two years of federal tax returns (all pages and schedules)
Assets: Two months of bank statements for all accounts used for down payment and reserves
Identity: Government-issued photo ID
Property: Executed purchase contract (once under contract)
Additional: Any other income documentation relevant to your profile (self-employment, rental income, retirement distributions)
Your Success Indicator
Within three business days of submitting your full application, federal law (RESPA/TRID) requires your lender to deliver a Loan Estimate (LE). This document will show your note rate, the buydown structure, estimated monthly payments for Year 1 and Year 2, and all closing costs. Review it carefully. If the buydown is lender-funded, you should see the subsidy reflected in the cost structure without a corresponding charge to you at closing.
The Grand Rates team, including Duane Buziak, is available 24/7 to move quickly on time-sensitive transactions. In a market where rate locks and contract deadlines compress timelines, that availability is not a marketing point. It is a functional requirement.
Your Next Steps Before the Clock Runs Out
Here is a clean checklist of everything covered in this guide, in order:
1. Confirm the offer applies to you: purchase transaction, lock on or before June 30, 2026, eligible state (Virginia, Florida, Tennessee, or Georgia)
2. Verify loan program compatibility: Conventional, FHA, VA, USDA, or Jumbo (case by case)
3. Run your personal savings math using the framework in Step 3 — know your exact Year 1 savings figure before you proceed
4. Compare at least three lenders using the questions outlined in Step 4 — ask specifically about buydown funding source, lender access, and credit pull type
5. Initiate a soft-pull NoTouch pre-qualification to confirm eligibility without impacting your credit score
6. Move to full application and rate lock before June 30, 2026
7. Review your Loan Estimate within three business days of full application to confirm the buydown structure
The math on a lender-funded 1-0 buydown is straightforward: if you are not paying for the subsidy, your breakeven is Day 1. Every month in Year 1 is a month you are paying less than your note rate requires. That is real money, and it requires nothing from you at closing beyond the standard transaction costs you would incur on any purchase loan.
The deadline is June 30, 2026. The window is narrow. The process starts with a single soft-pull inquiry that costs your credit score nothing.
Start your no-touch credit consultation today and find out exactly what this offer means for your loan amount, your market, and your timeline.
